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Industry Spotlight: Alex Tiller
“There are wild inefficiencies in solar financing that leave too many high-quality, small-scale developments on the sidelines,” said Alex Tiller, who joined investment firm Foss & Company’s Denver office in August. Tiller intends to address those market inefficiencies in his new role as managing director of the recently launched Foss Renewable Energy Partners tax equity fund.
“I think through finding efficiencies in the approach and analysis of projects–all the way from the way you intake a project to the way you break it down and analyze it and underwrite and flow capital to it–there are a number of steps that can be consolidated and streamlined,” said Tiller.
Tiller hopes to offer standardized documentation that, among other goals, speeds up the due diligence and helps new developers avoid common pitfalls in structuring their transactions. Part of that innovative approach is Foss & Company’s new website, TaxEquity.com. The online platform allows renewable energy project developers to introduce themselves, execute mutual nondisclosure agreements and share details about their projects. Tiller says his affiliation with the Massachusetts Institute of Technology (MIT) may lead to algorithms to standardize and optimize project analysis.
The fund will primarily focus on commercial/industrial solar investments and energy storage, with the goal of deploying $300 million in tax equity investments by the end of next year.
“If I had to say how we’re going to lean into 2018, I’d say we’re still looking at nice, chunky, maybe 3- to 5-megawatt or bigger projects or portfolios, but my goal is to reduce the minimum size,” said Tiller. “By the end of 2018, I hope to invest in 1-megawatt projects. By 2019, I’d love to be dipping into sub-megawatts.”
This approach to serving a traditionally underserved segment of the market was what helped Tiller achieve success earlier in his career in renewable energy. Tiller, who received his undergraduate degree in business management from Northeastern University and is completing his MBA at MIT Sloan School of Management, began his career at Fidelity Investments. By 2007, Tiller was managing a private equity investment fund focused on agriculture and farmland–an interest he credits to his Midwestern roots. It was then that he began looking into renewable energy as a way to increase returns for investors. Tiller spent almost two years setting up the fund, raising capital and assembling a portfolio of assets when the financial crisis put investments across the board on hold.
“We had to shelve the whole thing and I had to think about what I wanted to do next,” he said. Subsequently, one of the would-be investors in Tiller’s fund invited Tiller to join him in starting a development solar asset management business in Hawaii. “I looked to my wife and asked her, ‘Do you want to live in Hawaii for a few years?’ and she said, ‘Sure!’”
In Hawaii, Tiller partnered with Sunetric, a solar engineering, procurement and construction (EPC) services firm, before Sunetric’s founder asked him to join the company as CEO in early 2010.
Tiller said that during that time, all the mainland banks and tax equity investors were doing big projects on the mainland, but large projects couldn’t be built in Hawaii because the utility company wouldn’t allow it. Tiller saw an opportunity to arrange Sunetric’s own financing that was effective for smaller projects.
“We looked at a diverse set of opportunities that nobody else was servicing,” said Tiller. “We carved out an early position in nonprofits and religious organizations that owned their own buildings and land, but were too small for anyone else to consider. We had a great time.”
In serving smaller projects in need of capital, Tiller helped Sunetric increase revenue by 225 percent in just three years. Tiller sold the company in early 2014 and agreed to stay out of competition in the solar finance, development, EPC industry for two years. In that time, he worked on a solar-related software concept and started his own grass-fed beef company. After he was able to return to the broader solar market, Tiller was hired as president of Vancouver, B.C.,-based Solar Alliance Energy Inc.
It was from there that Tiller decided to join Foss & Company to run the firm’s first renewable energy tax equity fund. “When I met these guys, I knew they were a super reputable firm and they clearly know what they’re doing,” said Tiller. “They have great investor clients, and a great project history behind them. They’re a top-notch firm and this is a great opportunity. I look forward to working with the Foss & Company team to innovate within the renewable energy tax equity investing space while helping more quality projects come online.”
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