Chava Gourarie, Commercial Observer
Key Points
  • Black Bear advises companies on how best to host solar on their property, either by having it leased to a third-party company or installing it themselves.
  • Victoria Stulgis is the senior vice president of client operations at Black Bear, helping it capitalize on what she sees as a huge missed opportunity, one that increases revenue for real estate companies while increasing the amount of renewable energy for the planet.

Black Bear’s Victoria Stulgis Explains Why Solar Profit Is ‘De-Risked’

Hosting solar is an opportunity to increase both revenue and renewable energy sources simultaneously, the executive says...

Black Bear Energy is a company that helps real estate companies make sense of — and make money from — the world of solar energy. In particular, Black Bear advises companies on how best to host solar on their property, either by having it leased to a third-party company or installing it themselves.

Last year, Blackstone (BX) portfolio company Legence, which focuses on investments in companies involved in the transition to cleaner energy, acquired Black Bear.

Victoria Stulgis is the senior vice president of client operations at Black Bear, helping it capitalize on what she sees as a huge missed opportunity, one that increases revenue for real estate companies while increasing the amount of renewable energy for the planet. A big part of Stulgis’s job is answering clients’ questions — so we asked her a few of our own.

Let’s start with the basics: What do you do?

Black Bear Energy is a technology-enabled service company that helps the real estate industry deploy on-site solar. So we work with institutional property owners to help them deploy solar across their portfolio.

Recently, Black Bear published a report benchmarking the deployment of solar among REITs. Can you tell me a little bit about the report?

The Real Estate Solar Leaderboards highlights the top real estate owners and managers in the U.S. who have installed on-site solar on their assets. It ranks real estate owners and managers by their asset type. We’re looking at the total megawatts of installed capacity on property they own. The majority of projects end up being rooftop solar, but there’s also a lot of solar on top of parking garages or parking canopies.

What was the purpose of these leaderboards?

The goal of the leaderboards was really to help put a spotlight on the first movers, the companies that have found ways to get solar deployed at decent scale. But it’s also to highlight this incredible opportunity that’s currently not being taken advantage of.

A recent Morgan Stanley report identified the market opportunity for REITs and identified that there’s an additional 328 gigawatts of solar capacity that could be deployed. And, if you look at the top five real estate owners and managers from our leaderboards, they’ve only deployed about half a gigawatt. So that’s another 327 and a half gigawatts that they could be deploying based on where we know solar is currently profitable. It makes economic sense.

These days, companies are facing a lot of pressure, regulatory or otherwise, to emit less carbon. Is that part of the conversation in addition to the possible revenue, that solar can help with the balance of carbon for an asset?

Yeah, absolutely. Before I worked in real estate, I worked with Fortune 500 companies who had committed to be net zero, and they’ve really been in the spotlight for net zero for a lot longer than real estate companies. Only a handful of real estate companies have come out and committed to be net zero by a certain date. But what’s so great about real estate that’s different from a fortune 500 company is that they have this huge asset that most corporations don’t. They own this large portfolio of buildings, parking garages and parking lots that can host solar. We’ve looked at some companies’ portfolios, where if you have assets in the right geographies, there’s some cases where you can host more solar than your buildings and tenants even utilize.

The goal with net zero has always been what can companies do to bring additional renewables onto the grid. And, if you’re a real estate company that signs a lease to put solar on your roof, that is absolutely additional renewables — that solar would not be there pumping those kilowatt hours into the grid unless that company decided they wanted them on their roof.

Reporting around renewable energy credits needs to be worked out, but there are absolutely solutions — as long as you’ve got the renewable energy credits to back up the megawatts on your roof to be able to take credit for and claim that you’re bringing additional renewables onto the grid.

What are the geographies and asset types, and other factors, that make deploying solar profitable?

The first question is: Is there a rooftop or viable space to host solar? We need a place to be able to host a decent amount of solar. A large industrial warehouse, for example, is a great opportunity. Or an office campus in California that has a ton of surface-level parking or parking garages. We can’t do much in New York, for example, where there are high-rises, and people are using rooftop decks for amenities.

The second thing we need is to have all the things that make a viable solar project economically. The first is sunnier places, so the Californias of the world generate more solar per megawatt of installed capacity than if we install solar in New England or Minnesota.

The next is how much electricity costs. California, again, aligns with high electricity prices. New England also has high electricity prices, whereas some of the Southeast and Southwest have historically low electricity prices. The last item is: Are there policies that provide additional incentives? That might include rebates up front or solar renewable energy credits, which is basically an additional revenue stream.

So you’ll find that there are places like Minnesota that don’t have that much electricity. But they have incentives and have been a solar-friendly state for a while. The majority of our projects right now get done in California, New England, Maryland and New Jersey, but we’ve also done a couple projects in Minnesota and are about to do a lot more in Illinois. Those are places where it’s really the policy and the incentives that are driving the deployment.

Policy, especially, plays a role in community solar. Can you explain the distinction between community solar and on-site solar?

We’re not talking about where the solar is physically hosted, because in both cases the solar is hosted — quote/unquote — on site. We’re talking about who uses the electricity. Is it the landlord or their tenants? Or is there someone else that’s not on site, using the electricity? That would be community solar.

Community solar is one of the most popular solar structures that’s really gaining a lot of steam. For community solar to work, there has to be policy that is set at the state legislative level and programs that are put in place by the utilities in those states. Basically, what they do is they enable a solar developer to come in and install five megawatts on, say, an industrial rooftop. And then they work through the utility, and through a third-party aggregator, to allow any residents or homeowners or small businesses to be off-takers of that community solar program. Virtually, they get sent those kilowatt-hour credits. So they can see savings on the bill.

What’s so great about community solar is it really does enable either businesses or homeowners, or people who don’t own homes but just are in apartments, to be able to benefit from getting discounted electricity and be a part of this clean energy transition, even if they don’t have a roof that can actually host solar. And the really cool thing is that there are a couple different states that are starting to require that a certain percentage of off-takers are low and moderate income. So you’ve got the folks who really need the utility savings the most getting priority as off-takers in these programs. New Jersey is one such state that has really pushed for that low- and moderate-income off-take requirement.

What are some states that have the legislative framework, and also have an agreement with the utilities to make community solar possible?

It aligns with a lot of the places that I mentioned where we’re doing a lot of solar. So there’s actually community solar in a lot more states than this, but in some markets the economics only really support ground-mount solar development in, say, an agricultural field.

There are only a handful of states that are set up to really make a market such that our clients can lease their rooftops for community solar — where, if you are an industrial owner, people will actively come to you and say, “I want to put solar on your roof and provide you a revenue stream.” They include Massachusetts, New Jersey, Maryland, Illinois, Minnesota. In California, the state legislature has passed a program and they’re in the process of finalizing it. That would absolutely create a market for rooftop community solar systems.

Where are we technology-wise in terms of being able to store some of the energy so the grid doesn’t fluctuate so much? Is it just a question of space?

Right now, there are a couple states that are either incentivizing or requiring battery storage be installed where there is solar, either with community solar projects or with on-site projects. So Massachusetts is one state where, for any project, you do over half a megawatt, you’re required to install a battery.

In California, there’s this duck curve sensation, which is caused by utility-scale solar projects out in the eastern part of the state. What’s happened is they have all these solar kilowatt hours that are being pumped into the grid during the sunny hours. After the sun sets, all those kilowatt hours stop being pumped to the grid, the solar systems go offline, and people get home, they power up all their electronics.

They refer to that as this duck curve issue. So California is starting to incentivize battery storage. They’re incentivizing people not to export kilowatt hours to the grid during those peak sunny hours, but instead to charge up their batteries. And, then, instead of pulling from the grid during the [usage] peak hours, which might be say 5 to 9, they’re drawing from their batteries. The utilities have these natural gas peaker plants to balance out the solar grid, but, theoretically, a more efficient grid would happen if that solar load can be balanced out.

How does the Inflation Reduction Act play into all this? Is it making a difference to your clients?

Yeah, absolutely. The Inflation Reduction Act is just a boon for the industry in that it’s the first time that the solar industry has had a 10-year runway of investment credits and production tax credits that don’t decline every year. In the past they’ve had them for shorter amounts of time, and the incentives decline every year. Now, they’re fixed at where they are for a full 10 years. So, in terms of just getting overall investment and dollars into this space, policy certainty at a macroeconomic level brings down costs.

And then there’s absolutely some adders and adjustments to the incentives that we’re still working through and waiting for some IRS guidance on. The first is adders to the investment tax credit (ITC). Right now, it’s a standard 30 percent tax credit. But, if the off-taker is low or moderate income, the client can qualify for a 10 to 20 percent adder. If the project is in what’s called an energy community — which they define as a community that has historically had coal as its main energy source and income source — that can get another 10 percent adder. There’s also a domestic content adder, so if you end up sourcing modules or other equipment that is made in the U.S., which we’re already starting to see factories boom, there’s an additional percentage adder.

All of our clients are, by nature of them being for the most part real estate investment trusts, they don’t pay federal tax. As a result, they don’t have tax liability and so they cannot monetize those tax credits. Historically, a lot of our clients, in part due to this, have not owned their solar projects. I’d say 95 percent of the projects we do are owned by a third-party solar developer that can monetize all those tax benefits. With the IRA, you can actually now sell and therefore transfer your tax credits. There’s still some issues to be worked out in terms of a marketplace for these, where people can, from a transaction cost standpoint, buy and sell these tax credits.

And there’s still a major issue around if the IRS can actually recapture tax credits if a product is sold within five years after it’s energized, since real estate companies buy and sell assets all the time. So there are still a couple issues to be worked out. But we’re confident that there is upside there that can be captured, as well.

Going forward, what are you sort of watching now to see what happens next, in terms of policy and incentives?

We’re absolutely expecting there to be more markets that open up in terms of where solar can be done. But I actually think the bigger opportunity for the real estate industry involves scaling their on-site solar. It’s going to come from the companies themselves actually taking concrete actions to deploy solar. A huge part is just trying to demonstrate to the real estate industry, which is a conservative industry candidly, that solar on rooftops and parking garages — it’s been de-risked and all the risks can be managed.

Chava Gourarie can be reached at

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