(Adds graphic showing projected wind power growth)
By Nichola Groom
Jan 5 (Reuters) - United Wind Inc, which has carved out a
niche leasing wind turbines to farms and rural homes, has
clinched $200 million in funding from Toronto-based Forum Equity
Partners - the largest-ever single investment in small wind
projects.
The funding is a vote of confidence not only in the
Brooklyn, New York-based startup, but in the nascent market for
wind energy that is both produced and used on site.
Distributed generation, or power that is produced where it
is consumed, has taken off in recent years as governments have
pushed for more renewable sources of energy and have sought to
scale back on fossil fuels like coal and natural gas that are
traditionally used in utility-owned power plants.
Small wind turbines work best on large properties, generally
an acre or more, where wind is abundant. The turbines are far
smaller than the massive ones seen in a typical industrial wind
farms. United Wind customers include farms, industrial
facilities and rural homes.
The $200 million will fund about 1,000 projects in the
Northeast and Midwest, United Wind told Reuters, allowing the
privately-held company to expand significantly beyond the 26
projects it developed since 2013.
Forum includes rooftop solar in its portfolio of investments
and sees United Wind as a "first mover" in a market with major
opportunity for growth, Chief Executive Richard Abboud said.
The funding from Forum adds to the $13.5 million United Wind
received from New York's state-sponsored NY Green Bank and U.S.
Bancorp USB.N late last year.
"The capital is coming in," United Wind CEO Russell Tencer
said in an interview. "We expect to see that same hockey stick
(growth) curve that we've seen in the solar industry."
The Distributed Wind Energy Association, an industry trade
group, expects distributed wind capacity to reach 30 gigawatts
by 2030, up from 1 GW in 2015.
"To have a leasing model like what United Wind is coming up
with is huge," said Jennifer Jenkins, executive director of the
DWEA. "You see where solar is now and they are there because of
this model."
Much like popular solar lease programs that have underpinned
the rapid growth of companies like SolarCity Corp SCTY.O and
Sunrun Inc RUN.O , United Wind's lease program allows farmers
or other rural property owners, with no upfront cost, to power
their homes or businesses with small wind turbines, producing
between 50 and 100 percent of their electricity needs while
lowering their overall energy costs.
United Wind's primary source of revenue comes from monthly
payments by its customers. Distributed wind is able to use
federal tax credits and state incentives that make it
cost-competitive with power from the grid.
The small and medium-sized turbines United Wind uses for its
leases would start around $80,000 to buy outright, Tencer added.
"I saw an opening in the market where all the ingredients to
make distributed wind work were there," Tencer said. "But no
company had pulled all that together into a package."
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