With so many commercial and industrial solar projects slated to come online in the next ten years, investing in solar projects is becoming a more popular and lucrative business venture. In this blog post, we are joined by Nick Giannotti, Managing Member at Redball Ventures. Nick was a panelist for HeatSpring’s webinar How to Invest in a Solar Project: Get Tax Benefits and Do Good, where he explained how he first got into investing in solar energy projects, how his investment group came together, how he finds projects and partners, and so much more.

Check out the clip or read the transcript below to hear from Nick on how he thinks about investing in solar projects and how he got started with his very first one.

I have a fundamental kind of view on solar, and if one can benefit from the tax goodies, as I call them – there are multiple types of tax goodies – then where would you rather deploy your money? Would you rather give it to Uncle Sam? No offense to Uncle Sam. Or would you rather deploy it and invest in a solar project and get that same benefit back in the form of a tax incentive?

For example, if you have a hundred thousand dollar tax bill that you typically pay to the federal government – just using that as a round number. If you could invest a hundred thousand dollars in a solar project, that’s going to generate a return for you. Which one would you do? Would you rather pay the IRS or would you rather invest in a solar project and then at the same time get a meaningful return based on your tax dollars?

That’s how I look at things, Chris. And you know, the big things around mitigating risk to make sure that one doesn’t lose money in that investment either, right? If you’re going to pay taxes to the federal government, I mean, you’re not paying your money. So it’s going to them and the federal government is using it accordingly.

But if you’re investing in solar projects, you don’t want to – the goal is to not lose money in that aspect and then have to potentially not only not get the full tax benefits, but then also have to pay taxes on top of that. 

So the very first time I did it, I started talking around with some folks saying, “hey, listen, I’ve got this solar project, I’ve lined up some financing, some from a bank. Is there anybody else who wants to invest in this side by side with me and us?” 

And we kind of went from there. We passed the hat around. We invested in the project.I want to say maybe we put like a million dollars into the project. And we got the million dollars back in tax fittings the first year.

And rode the rest of it the rest of the way – with debt, the loan. And that first one was five years ago.