With the loss of 1603 Treasury Cash Grant program, developers of smaller solar projects must in 2012 start seeking mechanisms to ease access to low-interest rate funding. That’s what’s happening through a $100 million fund that Wells Fargo & Co. created through a partnership with Enfinity America Corp.

While larger projects have had an easier time gaining access to tax-equity and other low-cost financing, smaller projects have not had the same luck.

“This is a tax-equity fund,” Wells Fargo spokesperson Katie Ellis said. As such it will help provide upfront project financing that will be repaid to Wells Fargo over a period of years.

Enfinity will access the fund to support development of solar projects across the nation.

“The fund will create solar projects for commercial, industrial and municipal clients,” said Ellis.

The projects supported by the fund will range from 3 megawatts to 15 megawatts in size.

This is important because smaller commercial projects that Enfinity will develop with the fund were largely dependent on the 1603 cash grant to provide the building or system owners access to low-interest rate financing. The grant allowed project financiers a quick return on their investment in the form of a cash grant, which was distributed when the project was completed.

Without the tax grant such financiers need a healthy tax equity appetite and to be comfortable with accruing a return on their investment over a period of five years through the federal Investment Tax Credit. That was no problem before the recession of 2008, when the tax-equity market was rife with investors, but it’s only now recovering, and many are wary of solar.

Apparently not Wells Fargo.

"Our continued commitment to the U.S. solar market is a reflection of the opportunity Wells Fargo sees in this growing sector," said Barry Neal, head of Wells Fargo's Environmental Finance Group. "We're excited to partner with Enfinity and support their efforts to develop projects that will create new jobs in the U.S."

Enfinity will use the up to $100 million fund to develop solar projects across the country. In the past it has developed more than 250 megawatts of projects, some of which it owns, others which it arranged financing for through leases and power-purchase agreements.