Company
EFC founders Mark Sampson and Chris Tyson have a long and diverse history in specialized structured financing and investments including solar. In April 2009, they partnered in the acquisition of SolarNet, the largest privately-held solar distributor and large system integrator in the United States with ITOCHU, a Global 500 company with over $34 billion in revenues (www.itochu.com).
The EFC team includes legal, finance and accounting executives with a diverse background.
SolarNet serves more than 3000 solar dealers and has managed noteworthy solar system installations at some of the nation’s largest projects. In October, 2009, SolarNet entered into an exclusive solar distribution agreement with Firestone Building Products, the leading manufacturer of superior commercial roofing solutions. Firestone serves over 2000 roofing contractors. (see NEWS & LINKS)
A “Gap” Equity Fund or "FUSE Fund" ("Funding Solar Energy")
The shortest description of the FUSE business model is that it is a “gap” equity fund. Today, every large-scale commercial solar system requires a gap equity investment even with the investment tax credit or U.S. Department of Energy grant, Solar Initiative (or other state subsidy) and a sale of depreciation built into the capital structure. FUSE will, on a very selective basis, make that gap equity investment. As the last dollar in, we expect to have pricing power that can deliver attractive internal rates of return on our investment capital.
A “Perfect Storm” of Factors
The FUSE fund managers intend to capitalize on a rapidly growing market presently challenged by the global credit crunch yet supported by generous federal, state, and local subsidies and incentives and pressured by various timetables and deadlines. This combination of factors, led by the credit crisis, government subsidies and regulatory pressure and the collapse in solar panel costs - dramatic declines in the past year - creates an environment whereby the fund managers can vet the solar dealer network’s high volume deal flow; select the best of the transactions; and then price the Fund’s investment capital at a level designed to deliver our targeted returns.
Geographic and System Size Target Markets
The Fund will look for investment opportunities throughout the United States, Canada, Mexico, Latin America, and the Caribbean. We expect the United States will absorb a significant share of investment capital.
The system target market is 1MW to 10MW+ systems. The larger SolarNet dealer network is focused on this segment and is already sending EFC a high volume of potential transactions. The capital costs of these large systems are beyond the ability of their dealers to self-fund, a fact that drives them to the FUSE Fund. Plus the financing dollars for these systems are large enough to carry the burden of FUSE LP’s expected returns.
The FUSE Product Suite
FUSE will make both debt and equity investments. For debt investments, the fund managers expect to make construction and bridge loans and medium term permanent loans secured by the projects and various federal and state subsidy payments and/or power purchase agreement payments. All advances are expected to result in an ownership position in the projects.
Key Differentiators
We enjoy significant strategic advantages over other fund management teams. The most striking are our dealer network, our high volume/high quality deal flow, our geographic diversity and our zero to very low pursuit costs.
The SolarNet Dealer Network
- Largest dealer network in the US.
- 3000+ active accounts.
- Businesses focused on solar.
High Volume/High Quality Deal Flow
- Experienced dealers can pick high probability leads to show the Fund.
- Just a small number of our dealers can overwhelm the Fund with deal flow.
- Each lead comes with a feasibility endorsement based on dealer’s experienced judgment.
Our Zero To Very Low Pursuit Costs
- FUSE Fund management has created an 36 MW pipeline through existing dealer relationships, without the expense of any sales, marketing or other pursuit costs.
Our Geographic Diversity
- Dealers in every country from Canada to Panama, and in France and Spain.
- Central American dealers are focused on US dollar denominated leases and or backed by government or multi-lateral aid agency guarantees.