Green Wombat

photo: WorldWater & Solar Technologies

As the financial crisis short-circuits the ambitions of green tech companies, solar financier MMA Renewable Ventures is pushing ahead with raising its fifth fund. Meanwhile, its solar power plant joint venture with Chinese solar cell maker Suntech – Gemini Solar Development – has been selected by utility Austin Energy to build a 30-megawatt solar farm in Texas.

The San Francisco-based firm just completed its $200 million Solar Fund III, which invested in 20.6 megawatts of photovoltaic solar arrays for companies like Macy’s, the Gap, Lowe’s and utility FPL (FPL) as well as the Denver International Airport. MMA Renewable (MMAB.PK) provides the financing for the installation of large commercial solar arrays on big box stores and other locations while retaining ownership of the systems. The electricity produced is sold to the building owner under a long-term contract.

“The good news is that we can raise another fund in a tough market,” MMA Renewable Ventures CEO Matt Cheney told Green Wombat, adding that the company aims to raise $200 million or more for Solar Fund V.

That doesn’t mean it’ll be easy. Many of the Wall Street banks that invested in big solar systems are no more and demand for the tax credits generated by the projects has fallen faster than the Dow Jones as most companies aren’t piling up much tax liability these days.

“The ones that are left are being very picky and asking a lot,” says Cheney, adding that banks and other investors are demanding higher returns on their investments. Still, he notes, past MMA Renewable investors like Wells Fargo (WFC) remain relatively healthy. “If you look at every country in Europe and the U.S., there are good examples of financing institutions that were less impacted by the financial crisis, which is a deep one,” he says.

One possible source of new tax-equity investment may come from well-capitalized utilities that, thanks to a change to the tax laws Congress made last October, can now claim tax credits for solar projects. PG&E (PCG) CEO Peter Darbee, for instance, has said his utility plans to invest in solar power plants.

A new and potentially bigger worry is whether MMA Renewable customers – big box retailers and the like – will be survive the financial crisis. MMA Renewable’s business is built on long-term power purchase contracts – as long as 20 years – that provide a predictable and steady revenue stream to investors.

“Would you buy a corporate bond from a large U.S. company that went out 20 years today?” Cheney asks. “You would most likely tell me that’s a long time. You don’t know if you want to take that risk beyond five or ten years. That’s the equation that’s present in the marketplace today.”

In California, at least, demand for solar has remained strong: This week state regulators reported that installed solar systems more than doubled in 2008 from the previous year.

One bright spot may be the market for smaller-scale photovoltaic power plants and MMA Renewable’s Gemini joint venture with Suntech (STP).  The Austin Energy project still must be approved by the city of Austin, but Cheney says Gemini is in the midst of negotiations with other utilities as well.

When SunPower (SPWRA) reported record fourth-quarter earnings Thursday, CEO Tom Werner said the Silicon Valley solar cell maker was shifting resources to its power plant building business in 2009 and had 1,000 megawatts of projects on the drawing boards.

There was just one catch:  money. “We have a strong pipeline of projects fully permitted, or with permits in process, that will be buildable,” Werner said, ” when financing becomes available.”