In 2023, the towns of Manchester and Portland both completed solar projects on their schools and municipal buildings with the help of the Connecticut Green Bank, a quasi-public agency funded through charges on Connecticut ratepayers’ electric bills and revenue from the Regional Greenhouse Gas Initiative.

The Green Bank shepherded the two towns through the process, including finding a contractor to build the solar installations and a way to finance the projects. The solar development company Greenskies Clean Focus, based out of North Haven, won the construction contract after a competitive bid.

Overall, it was a success story for Green Bank’s Solar Marketplace Assistance Program (MAP) which assists municipalities with going solar to save money on electricity costs and promote clean energy. According to the Green Bank’s 2023 annual report, the solar installations are projected to save Manchester – which installed solar on seven municipal buildings – $100,000 annually and more than $2 million over the term of the power purchase agreement (PPA). Portland, which installed solar on the Brownstone Intermediate School, is projected to save $10,000 per year and $206,000 over the life of the PPA.

However, it’s possible they could be saving more.

Although the Green Bank used a competitive bidding process for building the solar installations in both towns, they did no such bidding process for financing the project through a PPA. 

Instead, the Green Bank awarded the 20-year financing contract to Inclusive Prosperity Capital, a non-profit started by the Greenbank in 2018 with seven of the Green Bank’s employees, with no competitive bidding process at all.

Financing a solar project through a PPA works like this: The company pays for the construction and installation costs and then recoups its money over time through selling the electricity generated by the solar panels back to the municipality with a few cents tacked on to the cost per kilowatt hour. The rate depends on the size of the project and how much money the finance company wants to make. Over the life of a 20-year contract, those few cents per kilowatt hour can add up quickly.

Reached for comment, town managers for both Manchester and Portland said they were aware of the competitive bidding process for construction and installation of the solar panels on their buildings but were not aware of any bidding process for the PPA awarded to IPC.

“We just had a contract with the Connecticut Greenbank, and they were responsible for pretty much all the other aspects of the solar projects,” Stephen Stephanou, town manager for Manchester, said. “My understanding is they put out a competitive process for the contractors, I’m not sure about that company (IPC).”

Ryan Curley, town manager for Portland, said he couldn’t find any reference to a bidding process involving IPC. The only reference he could find was a 2022 email, and that IPC had already been chosen by then. “I did not take office until November 2021, however, so it could just be that bidding happened before then.” 

It didn’t. As part of a commercial solar service agreement between the Green Bank and IPC, IPC provides the PPAs for all municipalities “seeking financing from the Green Bank,” according to Rudy Sturk, communications director for the Green Bank.

“The Solar MAP program was created to help municipalities easily navigate the process of adding solar to their properties while also providing financing,” Sturk wrote in an emailed response to a series of questions submitted by Inside Investigator. “This process starts with site assessments and ends with a PPA financed by the Green Bank through its nonprofit partner, IPC.”

However, Sturk did not address the question inquiring as to why it is in the municipalities’ best interest to not have a competitive bidding process for solar project financing. In an advertisement for Green Bank’s Solar MAP project – Less work. More Benefits. Now even easier for towns – the Green Bank offers towns “attractive financing through a Green Bank Solar PPA.”

Based on information obtained through a Freedom of Information request and received by Inside Investigator, IPC submitted bids for financing state solar projects – largely prisons – through its Solar MAP 1 and 2 programs, but they were far from the lowest bidder. Their rates ranged from 7 percent higher than the lowest bidder, to 73 percent higher, with an average of 48 percent across all bids.

The Green Bank’s nonprofit partner was competing for those state PPA contracts against at least six other companies for Solar MAP 1, and two companies under Solar MAP 2. Multiple Connecticut-based companies submitted bids, meaning the Green Bank through its nonprofit partner, IPC, was actively competing with them for the PPA contracts.

The information was revealed during a February 27 public hearing before the Energy and Technology Committee when representatives of the solar industry testified that Connecticut’s quasi-public agency was now competing directly with solar developers – and essentially awarding no bid contracts to its own entity, rather than conducting open bidding process whereby the private solar industry could compete, and towns could potentially get a lower rate on their PPA.

According to a 2021 Request for Proposals issued by the Green Bank, they were seeking construction services for solar developments in ten municipalities, including Avon, Farmington, Darien and Groton. There was no RFP for financing the projects.

The same does not hold true for state projects. According to a Request for Information issued in 2022 Green Bank did seek developers interested in financing solar projects at state facilities like the Department of Transportation and DEEP. Connecticut requires that contracts over a certain amount be put out for a competitive bid. Essentially, solar projects are being treated one way for the state and another way for municipalities.

One of the other concerns raised by the private solar industry, aside from the Green Bank directing financing to its own entity instead of allowing private industry to compete, was a bill submitted on behalf of Gov. Ned Lamont’s administration that would basically point all municipalities to the Green Bank when applying for state grants for school construction or renovation so the Green Bank could assess the feasibility of solar for that school.

Eric Virkler of Earthlight Technologies, a solar development company in Ellington, opposed the bill, arguing that by directing school districts to the Green Bank, they could be paying “substantially more” for their PPAs.

“The conclusion that we draw from this is that, based on recent history, each town and state building involved in Solar MAP Round 3 is at risk for paying substantially MORE for power than they would have had other private sector companies been allowed to bid against IPC,” Virkler said in written testimony. 

Inclusive Prosperity Capital was born in 2018 following a sweep of the Green Bank’s funds by the General Assembly in 2017, a year that saw a massive budget deficit and a standoff between Gov. Dannel Malloy and the Legislature that finally ended in a bi-partisan budget agreement that included the fiscal guardrails that Lamont and other elected state officials credit for Connecticut’s current budget surpluses.

The creation of their own nonprofit included shifting seven of the Green Bank’s employees into the nonprofit in full-time roles and was meant to safeguard the Green Bank’s funds from any future sweeps. The creation of IPC came with $6.5 million in startup capital from the Department of Energy and Environmental Protection (DEEP) and $10 million from The Kresege Foundation, a philanthropic foundation that works to “expand equity and opportunity in cities across America,” according to their website.

The Office of State Ethics signed off on the deal to much fanfare by Green Bank, but former State Treasurer and member of the Green Bank board, Denise Nappier, felt the Green Bank was overstepping its bounds and exceeding its legal authority. She also expressed “concerns that the funds now earmarked by the state for the Green Bank will be used to partially support the new entity during a transition period without state oversight,” according to the Hartford Business Journal.

The nonprofit spinoff is headed by Kerry O’Neil, who handled residential financing for the Green Bank, and Ben Healy, who was the energy finance director for Green Bank. O’Neil’s previous position with Green Bank saw her taking in $187,000 per year before she left for IPC, while Healy was taking in $156,000. 

Healey no longer appears to be with IPC, according to the organization’s tax records, but O’Neil is still CEO. According to their 2022 tax report, she received $306,446 in salary and “other” compensation from both the organization and related entities. The average salary combined with other compensation for the ten listed officers averaged a little over $200,000.

All told, in 2022, the organization took in $2.8 million in revenue, grants and investment income and paid out $3.3 million in salaries and benefits, ultimately posting $3.9 million in the red, with $3.5 million in remaining assets.

It appears most of that revenue is not tied to PPAs, however, but rather to consulting services done largely for the Green Bank itself, which shares its office space with IPC and a board member – Roberto “Bert” Hunter, chief investment officer for the Green Bank. 

Between 2019 and 2022, IPC received nearly $1.5 million through its PPA Fund Program, which includes consulting and administration services for other governments and entities throughout the country. However, IPC has also received $5.6 million in revenue from consulting services performed for the Connecticut Green Bank over that same time period.

The Green Bank says that although it does not pay any of IPC’s employees directly, they do pay for administrative services and consulting as part of their professional services agreement with IPC “on the continued programs, per the initial launch of the organization.”

In 2020, the Green Bank announced they had sold four PPAs to IPC for school and community centers in Naugatuck, Bridgeport, Madison, and Washington. Conversely, the Green Bank sold six PPAs to a Greenwich based solar company that same year.

Despite showing an operating loss in 2022, IPC has also been raising millions from outside investors to help fund their services, particularly as they expand into the Mid-West. 

In 2022, the organization received $13 million in investments from several foundations to support loans aimed at reducing energy usage through heat pumps and solar for multi-family buildings, nonprofits, and for low-income households. IPC also received a $15 million loan from Amalgamated Bank in 2022 to “fund sustainability projects in underserved markets and communities.”

IPC was even cited in a Washington Post story about Green Bonds, noting the nonprofit’s green loan financing program that supports their financing projects, building on the success and reputation of Connecticut’s Green Bank model that is being replicated in other states.

And while IPC’s expansion may be furthering the Green Bank’s work in other states and raising investment income, solar developers in Connecticut are increasingly concerned that the Green Bank is directing more business toward their own nonprofit, rather than fulfilling their mission of building up the solar industry in Connecticut.

In public testimony, Mike Trahan, executive director of the Connecticut Solar and Storage Association wrote, “This state agency is now working in direct competition with the private solar sector.”

“Green Bank was created to explore the next clean energy frontier. And they have done award-winning work. But while the Legislature did allow Green Bank to perform solar finance/development when Green Bank was formed in 2011, that was more than a decade ago when there were few commercial developers operating in Connecticut,” Trahan wrote. “Fast forward 13 years to today, and there are close to 50 different private businesses operating in Connecticut offering commercial solar finance and/or development services to municipalities, the state and private businesses.”

“The solar finance /development service void that existed in 2011 no longer exists. As was intended, private businesses have matured and filled that void. It’s past time the Green Bank moved on,” Trahan’s testimony continued.

Included in Trahan’s written testimony was a February press release from the Green Bank highlighting that they doubled their allocation of funding for commercial solar projects for businesses, municipalities, non-profits and state agencies through the Non-Residential Energy Solutions program.

In addition to Green Bank’s funding expansion for NRES, they also tripled their funding for the Solar MAP projects from $20 million to $60 million to support 26 projects for state agencies.

Private solar industry owners and representatives may be right to be concerned that directing municipalities toward the Green Bank under the governor’s bill would ultimately push municipal leaders toward the Green Bank and IPC, as opposed to the numerous private developers working in the state. The Green Bank has significant backing, funds, and an automatic financing partner. 

Essentially, it’s a quasi-state agency with dedicated revenue streams, that handles every aspect of the process and is in no danger of going broke and potentially leaving the municipality in the lurch.

“We’ve been tremendously happy with them,” Stephanou said. “One reason we ended up going with the Green Bank is just because we weren’t concerned necessarily… that it being a quasi-public entity, we didn’t have to worry entering a 20-year agreement that it would be like a private company that goes belly-up and then we’re stuck with a purchase agreement with some start-up solar contractor that doesn’t exist.”

The public hearing before the Energy and Technology Committee was not the first time private solar industry representatives have brought concerns to committee members about the Green Bank competing with them. In the past, however, they largely received pushback. 

This time, however, the committee offered up a bill that would rein in the Green Bank from competing with private industry, and Green Bank officials were pushed to answer questions on their financing of municipal projects and their relationship with IPC.

Alongside the governor’s bill, An Act Concerning Solar Projects Throughout the State would restrict the Green Bank from using funds to advertise or provide financing for any commercial projects, “if companies in the private sector could provide such services for such project, unless such project is developed pursuant to the commercial sustainable energy program.”

Green Bank CEO Bryan Garcia said the language in the bill would “effectively eliminate the ability of the Green Bank to provide assistance in finance solar in residential, commercial and small business markets.”

“If not for the Green Bank’s involvement in the market, some businesses and municipalities would not have had the opportunity to deploy low-cost renewable energy,” Garcia continued, saying the Solar MAP program is primarily for municipalities that may not have the staff or experience to navigate the solar market on their own. “The Green Bank does not want to compete with the private sector and conducts a competitive solicitation for engineering, procurement and construction services providing key opportunities for collaboration with the private sector.”

Committee co-chair Rep. Jonathan Steinberg, D-Westport, said the committee had clearly gotten their attention with that bill. 

“Normally, we think competition is a good thing and it has a benefit ideally on prices, but there’s a perception among some of the people in the industry that the Green Bank is muscling them out of other opportunities,” Steinberg said. “And this proposed legislation is intended to highlight the fact that the Green Bank has certain advantages that may lead it to be more attractive to some potential projects.”

Garcia says the solar industry’s concern has been discussed by the Green Bank’s board and that every project received bids, but he was talking about construction, not financing. 

Mackey Dykes, vice president of financing programs for Green Bank and husband of DEEP Commissioner Katie Dykes, said they could dominate the market if they wanted to, but the goal was “to expand the pie of projects, rather than take from the existing pie,” adding that Solar MAP projects only account for one percent of the market.

“We would end conversations with towns if it came out that they already had a relationship with a solar installer, had done solar recently, because we want to be very careful about not crowding out private projects,” Mackey said, but indicated it becomes more difficult with the expansion of solar into larger projects. “It’s a hyper-competitive environment.”

During testimony, Virkler of Earthlight Technologies said that even though there was a bidding process for the construction of solar developments for the state, the Green Bank kept the results closed, not informing the other bidders as to who won or why their bids weren’t selected. Instead, the Green Bank forced them to FOI the bids.

“Within that data, we got the bids for Solar MAP one and two, everybody who bid on it, we were able to see the list, and we found out that IPC was one of those bidders,” Virkler said. “So, IPC bid against the private sector on every project in Solar MAP one and two. And in Solar MAP 1 they were 44 percent higher than the lower bidder, on average, across all of those. And on Solar MAP 2, they were 55 percent higher.”

“And then they were given all the municipal projects out of hand, so it raises a ton of questions for me,” Virkler said. “It really confuses me as to how this can happen.”

Rep. Jaime Foster, D-East Windsor, questioned the Green Bank officials over the FOI’d documents showing IPC was not the highest bidder on state projects and that Solar MAP project financing is being directed straight to IPC.

“For the Solar MAP for municipal projects, there was not a procurement on the financing side,” Mackey said.

Garcia said that some contractors may be upset they were not selected through a competitive bidding process, even though one was not available for the financing of Solar MAP projects. 

When Foster pushed, questioning whether IPC has the best PPA rates for these projects, Mackey said there was no way to really know.

“We don’t have a basis to compare to for these particular projects. The Green Bank offers the Green Bank solar PPA, and that product offers – the bones of that product – are debt funding from us, debt funding from us, the IPC, to house the fund, own the projects,” Mackey said. “The Solar MAP program, part of that, is financing the project through the Green Bank solar PPA, so the towns knew going in that ultimately at the end of it, it’s us and IPC that will be financing the project.”

Mackey said that for financing the state projects listed in the FOI’d materials, SunPower, with multiple corporate offices throughout the country, was selected for the PPAs. Interestingly, SunPower was not listed on the bids obtained through the FOI process.

According to information posted on Green Bank’s website, SunPower’s PPA rate was 7.5 cents per kilowatt hour, higher than the lowest bidder, but still slightly below IPC, which averaged 7.8 cents across all Solar MAP 1 state projects and 7.9 cents for Solar MAP 2 state projects. The average PPA rate for municipal projects under Solar MAP 1 and 2 that were financed by IPC and the Green Bank was 7.9 cents per kilowatt hour.

“So then maybe SunPower offers better financing options, but we’ve chosen to use IPC moving forward,” Foster said.

Mackey said that the scale of the projects makes a big difference, and that IPC is better suited for smaller projects. “It’s apples to oranges in terms of the scales of the projects here,” Mackey said. The state projects were certainly larger, averaging 2,000 kilowatts, compared to an average of 70 kilowatts, but without any bidding process, it is impossible to know if it was the best deal those towns could get.

Foster continued her questioning, noting that the costs of these projects get “socialized” across towns that may be very sensitive to costs, as opposed to state projects where costs are spread out among a much larger population. “If IPC is not the most competitive by cost, the burden on the municipal taxpayer can be so much higher that then they opt not to do these projects,” Foster said. “It might make doing this work cost prohibitive.”

“With regard to the way we’ve chosen to challenge the Green Bank,” Steinberg said, “it’s not intended to be a slight to the Green Bank as much as what have we learned from our experience and what can we do better?”

“I do believe there’s a path by which we can grow the pie without in any way undermining the prospects of local installers that we want to encourage as well,” Steinberg said.

Reached for comment by email, Foster said she has heard from the solar industry “pretty consistently” that they are in competition with the Green Bank, and that it’s perhaps time for them to focus on incubation and expansion in other areas – echoing testimony from Trahan during the public hearing.

“There are certainly lots of examples of great success of the Green Bank, including that it’s a national model that people are looking to replicate,” Foster said. “Year after year I hear from my solar companies that they’ve cornered a segment of the market and it’s made it hard for the businesses that have been here a long time to continue to expand and do the good work that they want to do. If there are policies that need to change so that The Green Bank is focused on places where we need incubation and expansion than that’s certainly something I’m interested in looking at.”

Likewise, Trahan said that with the growth and expansion of the solar industry in Connecticut spurred by the Green Bank, that perhaps it is time for the quasi-public agency to focus more on the future and let the private market take it from here.

Although the Green Bank says it only accounts for one percent of solar development in the state – and Trahan admits there have been “hundreds” of solar developments completed without their involvement – his question is more about, where does it stop?

While the Green Bank indicated it was only going to focus on small projects developers didn’t want, Trahan says things have shifted. 

“They have a website, they’re advertising their services, they’re putting out press releases, they’re proactively contacting municipalities,” Trahan said. “Connecticut contractors were contacted and recruited to come to Connecticut to get this job done, we shouldn’t have to compete against the state.”

According to Rudy Sturk of the Green Bank, the Solar MAP program “creates a turnkey process for municipalities the municipalities involved and provides the stability of working with a trusted partner.”

“The municipalities that participate in the program understand that IPC, with funding from the Green Bank, will finance any projects resulting from the Solar MAP process,” Sturk wrote.

It is certainly an easy process for the municipalities; whether it is the best deal those towns could get is unknown. These kinds of projects can be complicated and it’s still a fairly new technology and process that some town officials may not fully understand. However, both town managers for Manchester and Portland said they were pleased with the outcome – the Green Bank included statements from both in their written testimony.

“I will say that we’ve been tremendously happy with them,” Stephanou said. “We have achieved a good amount of savings and the projects are up and running across town. So, I will say that, from my perspective, they’ve been really good to deal with.”

“They’ve done award-winning work in the state of Connecticut and a lot of people are working in the solar industry because of the work the Green Bank did ten years ago,” Trahan said. “We don’t feel there’s a need for contractors to compete against the Green Bank and there have been instances where they have.”

“The Green Bank, in my view, should be exploring the next green energy frontier, doing things that none of us can do,” Trahan said. “We can do commercial solar now. We’ve been doing it for a decade.”

Republish This Story

Republish our articles for free, online or in print, under a Creative Commons license.