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Dec 1, 2009 1:19 pm

Hello everyone.  I should first state that I am NOT a licensed broker and while I realize that this forum is for licensed brokers I have searched the terms of service and didnt see anything in there about not being able to post without being such.  Second I want to say I am not pitching anything but instead hoping I could get a professional insight on what type of broker I should be looking for.  As a member of several trade specific forums within my own field (electrical contractor) I understand the frustrations that come with novices or less posting questions that seem unspecific and clearly misguided so I will be as specific as I can.

 
Once again I am NOT pitching anything to you or asking advice on HOW to pitch.  What I am looking for is a description of the TYPE of broker I need, and perhaps a solid lead on where or how to find him/her.
 
As an electrical contractor I have been engageing in solar instalations, in the commercial market this is extremely proffitable and almost easy, but because of the huge initial investment its still for the most part out of reach for most residential customers.  While the return on investment is still good for residential customers most just cant afford the initial outlay (20 - 40k) leaving the largest market share almost untouched.  Myself an a real estate attorney have found a way to lease the SREC rights (solar renewable energy credits) in such a way that  it can pay for enough of a solar instalation for most homes to achieve a net zero energy cost and still be a really good investment for someone willing to wait 6-8 years for a 100% ROI.  No need for me to go into numbers any more then that because as I said I AM NOT HERE TO PITCH.
 
these are my specific questions:
 
While I can talk about this for days, its not my area of expertise, How do I find someone to pitch this for me in terms of broker to potential investor?  Am I even looking for a broker or am I barking up the wrong tree. 
 
As I invision this I would have a firm or broker pitch this to some kind of investment house and manage the fund.  Am I close?  Is there a specific type of firm that I should be looking for that can help me weigh the risk for myself as well as potential investors then market it for me?  If so how should they be paid?  Should I favor firms or brokers that are strictly performance based? ie commission?
 
I apologize if this post is of the type not usually considered acceptable in this forum and sincerely hope you recognize it as genuine and while certainly self serving not intended to be a request for anything more then some professional insight.
 
thanks
Lloyd
Dec 1, 2009 1:37 pm

The guy you need to talk to is named DJ.  He's with Jones out in Oklahoma City.

Dec 1, 2009 1:40 pm
Lloyd:

Hello everyone.  I should first state that I am NOT a licensed broker and while I realize that this forum is for licensed brokers I have searched the terms of service and didnt see anything in there about not being able to post without being such.  Second I want to say I am not pitching anything but instead hoping I could get a professional insight on what type of broker I should be looking for.  As a member of several trade specific forums within my own field (electrical contractor) I understand the frustrations that come with novices or less posting questions that seem unspecific and clearly misguided so I will be as specific as I can.

 
Once again I am NOT pitching anything to you or asking advice on HOW to pitch.  What I am looking for is a description of the TYPE of broker I need, and perhaps a solid lead on where or how to find him/her.
 
As an electrical contractor I have been engageing in solar instalations, in the commercial market this is extremely proffitable and almost easy, but because of the huge initial investment its still for the most part out of reach for most residential customers.  While the return on investment is still good for residential customers most just cant afford the initial outlay (20 - 40k) leaving the largest market share almost untouched.  Myself an a real estate attorney have found a way to lease the SREC rights (solar renewable energy credits) in such a way that  it can pay for enough of a solar instalation for most homes to achieve a net zero energy cost and still be a really good investment for someone willing to wait 6-8 years for a 100% ROI.  No need for me to go into numbers any more then that because as I said I AM NOT HERE TO PITCH.
 
these are my specific questions:
 
While I can talk about this for days, its not my area of expertise, How do I find someone to pitch this for me in terms of broker to potential investor?  Am I even looking for a broker or am I barking up the wrong tree. 
 
As I invision this I would have a firm or broker pitch this to some kind of investment house and manage the fund.  Am I close?  Is there a specific type of firm that I should be looking for that can help me weigh the risk for myself as well as potential investors then market it for me?  If so how should they be paid?  Should I favor firms or brokers that are strictly performance based? ie commission?
 
I apologize if this post is of the type not usually considered acceptable in this forum and sincerely hope you recognize it as genuine and while certainly self serving not intended to be a request for anything more then some professional insight.
 
thanks
Lloyd



Lloyd.  You are not even close.  It appears you are looking for someone to solicit investors for you.  We are not those types of people.  We are either registered representatives (licensed stockbrokers) or investment advisors. 

I'm not sure you can even find someone on here who knows where to look.

Good luck.

Dec 1, 2009 1:46 pm

You're looking for an investment banker.  That's not our business.  Google investment bankers or private equity firms in your area.  That's probably the best place to start.  Also Google alternative energy investing/leasing/etc.  That might help start to build a list of places to start calling.  They would be in better positions to lead you in the right direction.

Dec 1, 2009 1:52 pm

Wow, quite the muted response out of this crowd. I expected a lot more out of you guys.

Dec 1, 2009 2:16 pm
Moraen:


Lloyd.  You are not even close.  It appears you are looking for someone to solicit investors for you.  We are not those types of people.  We are either registered representatives (licensed stockbrokers) or investment advisors. 

I'm not sure you can even find someone on here who knows where to look.

Good luck.

Yes, exactly.  It is clearly beyond my skill set. 
 
Is there a particular organization that may specialize in this?  Would that be an investment banker?
 
 
Dec 1, 2009 2:19 pm

"those types of people"  are the ones that seem to be eludeing me.  It doesnt seem as if there trade has a name such as a broker, investment banker, or electrician.

 
Lloyd
Dec 1, 2009 2:28 pm
B24:

You're looking for an investment banker.  That's not our business.  Google investment bankers or private equity firms in your area.  That's probably the best place to start.  Also Google alternative energy investing/leasing/etc.  That might help start to build a list of places to start calling.  They would be in better positions to lead you in the right direction.

 
+1
 
Dec 1, 2009 2:44 pm

Look to private equity firms.  I'm sure they can securitize these things for you, and will have you well on the way to a total market meltdown / explosion within 2 years. 

 
But try a private equity firm / venture capitalists.  They can get qualified investors to invest start up capital for you / it / whatever the hell you are try to do.
Dec 1, 2009 3:05 pm
Wet_Blanket:

Look to private equity firms.  I'm sure they can securitize these things for you, and will have you well on the way to a total market meltdown / explosion within 2 years. 

 
But try a private equity firm / venture capitalists.  They can get qualified investors to invest start up capital for you / it / whatever the hell you are try to do.
Thanks for the input, I'm not looking for startup capital by business is well funded, nor am I looking for a market meltdown or explosion.
 
I am looking for someone to create a fund, solicit new investors , and manage it.  Is this something a venture capitalist does?
Dec 1, 2009 3:09 pm

Can you walk me through what the fund will actually do / accomplish?

Dec 1, 2009 3:58 pm

I know everybody is saying investment bankers and private equity, but I think Lloyd is asking for help as to which private equity managers.

Lloyd, PM me and I'll put you in touch with a guy I know who is "retired" from private equity.  He now writes books.  He may be able to help.

And to all of the pikers who come on here hustling... take a lesson from Lloyd.  That's how you ask a question.

Thank you for an intelligent post.  I may learn something from the whole thing.

Dec 3, 2009 11:49 am

I can only describe it the way I understand it, so I apologize in advance for using the wrong terminology. 

 
I will have to summarize the industry and to some detail the current dynamic to help you understand my goal.
 
First in the solar pv industry the hardest obstacle to overcome is obviously cost, this is much less of an issue for large corporations but the lions share of the market is basically untouched because no one wants to take out a second mortgage to finance it.  Next in New Jersey as with most states we have an SREC program (solar renewable energy credits).  The SREC s are often sold as contracts in 10, 15 and 20 year terms.  A typical home with a 4kva system will produce about about 10 SRECS per year, thats about $60K in SRECS over 10 years. 
 
What I want the fund to do..
at this point it should be obvious but..
solicit investors into the fund, the fund will then buy the rights to the srecs for a predertimened period of time (10 - 15 years) after which the SREC rights are transferred back to the homeowner.  The contractor/ homeowner then uses the procedes from the sale of the SREC rights to finance and install the system.  The homeowner benefits by haveing a net zero electric bill with no out of pocket expense. The fund proffits from the sale of srecs as there produced.
 
I have no real interest in the proffits from the fund.  The advantage to me is as the distributor / installer and service provider. 
 
At this point I could go on about the difference between the equipment I am using comared to traditional and give a pretty convinceing pitch but... as I said I'm nothere to pitch.
 
I appreciate all of your input and thank you again.
Dec 3, 2009 12:07 pm

After reading my own post I realize that I am probably leaving alot of wholes in my explanation so I will try to give you a little more insight without being too technical.

 
1 srec is created everytime 1 megawatt of electricity is created by using solar pv (photovoltaic)
energy prodocers (such as nueclear plants coal burners, co generation etc) are REQUIRED by law to buy these SRECs to help off set there carbon footprint.
 
Most energy producer only buy srecs in bulk 50 to 100 at a time and usually buy them from commercial producers (for xample a local chain of grocery stores installed solar on all of there stores and within days after installing them they sold a 15 year srec contract to a large producer for more then the original instalation cost.
 
by using the fund to accumulate multiple small producers it will have more apeal to the large buyers ( 50 homes would poduce 500 srecs 5 - 10 times more then the average large producer)
 
Clearly I dont have the ability to build an manage a 25million+ fund, but if the fund existed it would be  proffitable and produce a few hundred green jobs 
Dec 3, 2009 12:34 pm

What are the chances these SREC credits cease to exist (i.e. NJ is cutting their budget and no longer wants to fund these initiatives)?

Dec 3, 2009 12:58 pm

I will answer that the best I can. 


It WILL end its supposed too.
The srec prices now are based on a percentage of the fine an energy producer has to pay for not fullfilling there obligation to buy them.  Currently there are no where near enough being produced so everyone is paying the $711 SACP (solar alternative energy compliance Payment)  that fine goes down a little every year.  Keep in mind this whole program was designed to help finance solar instalations and give investor confidance for the next 15 years or so.  Its end is planned.  The scap prices are also planned for the next 8 years so you can get a clear idea of srec future prices based on that and determine an amount that would balance a reasonable risk against return.  The price for the ninth year will be dtermined next year and the 10th the year after next, etc.  While there are only 8 years of scap prices set there supposed to fall by a predetermined percentage every year untill they reach zero.  There are other peramiters that have to be met in order for the next years price to take effect, if those peramiters aren't met then the current years price is frozen. 
 
 
heres a link to nj clean energy that probably desribes it better.
http://www.njcleanenergy.com/files/file/SOLARTransitionFAQs121707%20fnl2(2).pdf
 
Of course that link will probably lead you to even more questions. 
 
A suppose a more generalized response would be that risk assessment would be part of the fun managers responsability, and way beyond my scope of ability.
Dec 3, 2009 1:01 pm

My apologies for spelling and grammer I am posting from a moble device.

Dec 3, 2009 3:30 pm

Thanks for this information - it's making my regulatory brain tickle.

Dec 4, 2009 11:43 am

ACtually I was thinking of that structure myself last night.  It makes sense to me, and involves a lot less regulatory oversight.  I understand the payoff in years to come, but would the investors make anything in the meantime (like a dividend payment)?

Dec 7, 2009 6:34 am

Hi to all.
New for the site. I like non-conventional energy sources.
Thanks to the moderator for allowing me to be here and happy Christmas in advance.