When a solar and fintech side-hustle becomes the main hustle
When a solar and fintech side-hustle becomes the main hustle
EDITOR’S NOTE: Whether they’re selling handmade crafts, doing consulting after hours, or operating a weekend catering business, side-hustles are meant to provide extra coin beyond what a regular day job pays. For many, it’s a way to turn their passions into profit. In 2017, according to CNN Money, 44 million Americans reported having a side-hustle to either pursue a passion or supplement their income, or both. Here is one in a series of stories from NE Ohio:
CLEVELAND, Ohio -- Geoff Greenfield knew exactly what he wanted his second job to be well before he launched it.
Greenfield, who is sometimes described as a “serial entrepreneur,” wanted his side hustle to work hand-in-glove with his main occupation, and passion, as a solar contractor.
New Resource Solutions is a side hustle that began in 2012 partly as a reaction to a rebuke that Greenfield had to endure from an East Coast financier over a proposed solar project in Ohio.
Greenfield’s main company, Third Sun Solar, began as a DIY project when he discovered that were no solar contractors in his region.
In 1998, Greenfield and his wife Michelle wanted to build a “net zero” solar home just outside of Athens, Ohio.
They were focused on sustainability before most people had ever heard of the word. But they couldn’t find a solar company in Ohio. They ended up doing a lot of research and installing an array themselves.
Geoff and Michelle Greenfield wanted the home they built in Athens, Ohio in 1998 to be “net zero” in electrical use. They installed a sufficient number of solar panels to generate as much, or more, electricity than the home typically uses.
Greenfield at the time was working with the Athens-based Corporation for Ohio Appalachian Development as an affordable housing developer in 33 rural counties. That job involved a lot grant writing and financial work for the construction of new homes and other projects for poor families.
Earlier in the decade, following his graduation from Miami University with a degree in political science and government, he had spent two years as a Peace Corps volunteer developing water projects in Zaire-Congo. It had been life-changing.
Following the Peace Corps experience, Greenfield earned a master’s degree in international affairs from Ohio University.
The news that he had “solarized” the new house spread by word of mouth, said Greenfield, and there were requests from friends who also wanted home solar arrays. And then requests from friends of friends.
Greenfield became a solar consultant and then an installer, incorporating Third Sun Solar and Wind Power, LTD in September 2003.
“I decided this was my passion. I decided to go all-in,” he described his decision. “Solar was considered a fringe technology. No one believed it could work in Ohio. Today, the typical mindset is that it works. It’s practical.”
Most of those early solar installations were residential solar arrays, but as the 30 percent federal tax credits for solar projects arrived in 2005, the technology advanced, and costs began declining, the company took on larger and larger projects.
That’s when financing became an issue, and Greenfield found himself trying to deal with banks.
Most of the banks were not interested in financing residential or small commercial solar, he said, and those that were had so many consultant fees that the medium-sized projects became financially untenable.
“There are thousands of library-sized projects that are good projects,” explained Greenfield. “But they are not getting done.”
An example of such a project, he said, was a solar array he built in 2013 for the Athens County Library, which in today’s dollars would cost about $150,000 -- too costly to come out of library operating funds but not large enough to attract a lot of competition from banks.
Third Sun Solar built a solar array on the roof of the The Athens Public Library in 2013. In today’s dollars, the cost of the project would approach $150,000, too much for the library to pay for out of its operating budget and too small for most bank financing. Special to the Plain Dealer
Like other solar installers, Greenfield turned to private equity groups to finance projects for small businesses, schools, churches and libraries. That’s where his career path changed again.
“We needed a PPA financing partner,” said Greenfield of a specific school project, and a confrontation that sparked his desire for a side hustle.
A PPA is a “Power Purchase Agreement,” at the heart of a deal in which the solar installer and customer turn to a third party for the cash to build the array.
That third party can be a finance company, a hedge fund, an independently wealthy individual or include a number of private investors looking for a safe and reasonably profitable investment.
The PPA partner pays for the construction, owns the array and gets the 30 percent federal tax break. The customer signs a long-term agreement to buy the power at a fixed rate. That rate includes a profit for the investors supplying the money but is still less than the utility electric rate and is guaranteed not to increase.
“I had a project, I think it was a school. We had put a lot of work into designing it,” Greenfield recalled the confrontation that changed his business life. “The customer liked us and was ready to do the solar.”
I was introduced to a company out of New York City that did this [PPA financing],” he continued. “The guy told me, ‘I don’t want to hire your firm to build it. We’re going to use our own people.’ I said it’s my customer. I am just bringing the deal to you.”
‘You’re not bringing the deal to me. I’m the guy with the money. I write the checks and that’s who controls the deal,’” Greenfield recalled.
“I learned that some private equity companies are less interested in solar and more interested in making as much money as they can. Greenfield walked away.
“Maybe it’s a Midwestern value of relationships and let’s do lots of business together, and trust each other and do business for 40 years versus ‘If I can screw somebody and get another five cents, I get extra points for that and I feel good,’” he said.
Greenfield decided to create a PPA financing company, one that would match investors looking for low-risk but reasonably profitable investments in solar projects backed by 20-year or 25-year power purchase agreements.
He founded Newtility Energy Finance in 2012. The idea was to structure financing for his own projects. The company was initially more of an idea than a working enterprise.
But his awareness of “impact investors,” wealthy individuals and foundations looking for ways to have an impact on society with their investments, made the idea look more and more like a “no-brainer.”
The idea got the attention of investors, by word of mouth, and began growing, just as Third Sun Solar got started by word of mouth. Greenfield began searching for investor partners.
By 2016 he had persuaded five investors to become part of Newtility, including Athens native John Haseley, an attorney, the former chief of staff for Gov. Ted Strickland and former assistant to Sen. John Glenn and a principal in the Columbus-based political consulting firm Remington Road Group.
Greenfield changed the name of his company to New Resource Solutions and filed new incorporation papers with the state in 2016. The new company is planning to seek additional investors in 2019.
Haseley, as well as Jen Lynch, Strickland’s policy advisor and also a principal in the Remington Road Group, are on the board of New Resource Solutions. Greenfield is the board chair.
The new company has three employees – including Greg Buzzell, CEO, an initial partner and co-founder. He has a background in “fintech,” financing of renewable energy projects. Fintech, short for financial technology, is the future of project financing, said Greenfield.
It’s sophisticated software and its Internet-based presence can introduce developers to distant investors and quickly create transparent deals with predictable rates of return and outcomes.
“We think that facilitating the transaction, bringing investors and capital into clean tech deals and structuring that space where the two meet, that is where we are focused,” said Greenfield.
New Resource Solutions has so far created financing packages for four of the 16 mid-sized to larger solar projects built by Third Sun Solar using PPA financing, he said.
So what’s different about New Resource Solutions?
“We are mission driven. And the mission is ’Let’s get as much solar deployed as possible and figure out how we can accelerate deployment,” he said.
Will New Resource Solutions ever become Greenfield’s main passion? Maybe, he says.