Disseminated on behalf of SolarBank Corporation

SolarBank Corporation (NASDAQ: SUUN; Cboe CA: SUNN; FSE: GY2) is growing its solar footprint in the U.S. It has signed a new deal with a California-based renowned real estate and infrastructure investor, CIM Group. This deal provides project-based funding of up to $100 million and will support solar projects with a combined capacity of 97 megawatts (MW) across the country.

Dr. Richard Lu, President and CEO of SolarBank, said,

“The financing is another major milestone in SolarBank’s plans to grow its status as an independent power producer. Assuming full funding, SolarBank will retain a majority ownership interest in what is expected to be 21 solar energy projects with a total capacity of 97 MW. The Transaction has been structured such that SolarBank does not have to issue any new shares, as the financing is being completed at the project company level.”

SolarBank’s Joint Venture Structure and Financing Details

CIM is a real estate and infrastructure firm focused on community development with ESG goals intact. Since 1994, it has invested over $60 billion to improve neighborhoods across the U.S. The company manages all stages of a project. From research and planning to daily operations and final sale.

Kyle Hatzes, Managing Director, Infrastructure & Impact Investments, CIM Group, further confirmed,

“CIM Group has a long history of developing and investing in essential infrastructure projects that seek to benefit communities and the environment. This transaction with SolarBank to grow its portfolio of solar projects underscores our ongoing commitment to the renewable energy sector and our focus on supporting innovative companies leading the energy transition across North America.”

The funding will be structured through a joint venture called “New HoldCo,” formed by CIM and Abundant Solar Power Inc. (ASP), a fully owned subsidiary of SolarBank.

Under the agreement, CIM will invest in non-convertible preferred equity in the newly created entity. Importantly, SolarBank is not issuing any shares or securities as part of this transaction.

New HoldCo is set to acquire project companies from ASP that collectively own 97 MW of solar capacity. The purchase will occur in two phases:

• 20% of the purchase price will be paid when a project reaches mechanical completion.
• The remaining 80% will be provided upon substantial completion.

Tax Credit Transfers and Financial Returns

Each solar project will earn Investment Tax Credits (ITCs). These credits will be sold to qualified buyers. These sales will follow Section 6418 of the Internal Revenue Code. Tax credit transfer agreements (TCTAs) will formalize these transactions. CIM will keep 100% of the revenue from these tax credit sales.

CIM will earn a 3% annual coupon on its investment. This payment is made twice a year. After this payment, the remaining cash flow from the projects will go to ASP.

SEE MORE: Latest Solar Price Chart 

Exit Strategy and Redemption Terms

New HoldCo can redeem CIM’s preferred equity 180 days after the fifth anniversary of the last project’s launch. The redemption value will be the higher of the fair market value or a set multiple of CIM’s initial investment.

Additionally, if New HoldCo decides not to redeem, CIM can request redemption at the lower value of the fair market price or the same investment multiple.

If a project is liquidated, damaged, or faces similar events, proceeds will be split according to the original contributions made by each party.

Challenges and Conditional Requirements

Despite the positive outlook, the deal comes with several risks. SolarBank must secure interconnection approvals, sign solar contracts, and obtain all required permits. The company also needs to secure third-party financing to keep the projects moving. Construction delays or cost overruns could pose further challenges.

Most importantly, if the government changes or removes solar incentives, the projects may no longer remain financially viable.

Moreover, the funding from CIM is subject to the signing of final agreements. If these aren’t finalized or key conditions fail, funds won’t be released. SolarBank also needs to secure capital for important construction milestones. The CIM funding comes only after achieving mechanical and substantial completion.

However, this deal with CIM Group shows great trust in SolarBank’s U.S. projects and growth plans. The $100 million financing will work if it gets regulatory approval. It also depends on construction moving forward and government policies supporting solar energy.

MUST READ:

Community Solar: Current Market Landscape and Growth Projections

As of June 2024, the United States has about 7.87 gigawatts (GW) of community solar capacity. This capacity is spread across 44 states and the District of Columbia.

In the third quarter of 2024, the community solar segment installed 291 megawatts direct current (MWdc). This is a 12% increase compared to the same period in the previous year. This growth underscores the sector’s resilience and expanding appeal.

Solar Bank’s community solar achievements include: 

1.  7.2 MW North Main Community Solar Project in New York 
2. Expands Community Solar in New York with 14.4 MW Project
3. Commences its First 4.99 MW BESS Project in Ontario 

SolarBank: Opportunities Amid Tariff Hikes

With rising tariffs on solar products from Southeast Asia, U.S.-based companies like SolarBank Corporation could seize new opportunities. SolarBank, which focuses on solar energy, battery storage, and EV charging solutions, does not manufacture solar panels but imports them for its projects. Notably, the company does not source from the Southeast Asian nations affected by the new tariffs, minimizing immediate impact.

These tariffs are expected to drive up the cost of imported panels, potentially increasing demand for domestic solar products. SolarBank, with a strong U.S. presence, may benefit by sourcing panels locally. U.S. solar stocks have already seen a rise since the tariff announcement, strengthening the business case for companies like SolarBank, which can reduce supply chain risks by focusing on domestic production.

Regarding the recent tariffs, Dr. Richard Lu, President and CEO of SolarBank, commented:

“We continue to execute on our development pipeline of community solar projects. I also want to comment on the recent announcement of increased tariffs on south-east Asia solar cells and SolarBank’s plans to manage its supply chain.

SolarBank has not been importing solar panels from any of the four countries that are subject to the tariffs announced by the U.S. Department of Commerce on April 21, 2025. As a result its present operations are not affected by this announcement. In addition, SolarBank has been exploring sourcing solar panels from other jurisdictions such as the Middle East and North America, where (domestic assembled) solar panels are becoming cost competitive with the panels imported from Asia. SolarBank also has significant development opportunities in Canada where solar panels are not subject to the same tariffs. Finally, I am expecting that electricity costs will increase in response to these tariffs which will further mitigate the financial impact on projects.

Overall, SolarBank is well positioned to manage this risk.”

SolarBank’s growth strategy in North America positions the company to capitalize on emerging clean energy markets in both the U.S. and Canada. By focusing on regions with high demand for renewable energy infrastructure, SolarBank is strategically aligning its operations to meet the growing need for community solar, energy storage, and sustainable energy solutions. This approach not only strengthens its market presence but also ensures the company is well-positioned to benefit from the ongoing transition toward green energy.

This report contains forward-looking information. Please refer to the SolarBank press release entitled “US$100 Million Transformative, Project Financing Announced by SolarBank and CIM Group to Fund 97 MW of Renewable Energy Assets in the United States” for details of the information, risks and assumptions.

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