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Executive Interview: Joan Hooke of Distributed Sun



Distributed Sun



Joan Hooke is the Director of Development, and is responsible for identifying and executing on new project and portfolio opportunities for the company. She also plays an active management role in the areas of risk mitigation and process management.

Ms. Hooke previously founded TerraHooke Partners, a boutique real estate investment and development firm, led a retail development business for Trammell Crow Company, and headed the US real estate operations for IKEA. Ms Hooke began her career as an attorney at Drinker Biddle.  She is a LEED AP, a licensed broker, and is admitted to the Bar in Pennsylvania.

Distributed Sun LLC is a solar developer and independent power producer. D-SUN was formed in 2009 to finance, build and operate solar energy facilities in partnership with commercial real estate portfolios.  D-SUN develops carport, ground-mount, and rooftop arrays ranging from 250 kW to 5 MW in capacity and aggregates them into utility-scale Solar Energy Investment Companies.

The Solar REvolution?

We asked Joan Hooke of Distributed Sun whether the commercial real estate industry is on the verge of a solar revolution.

Q:  There are more solar “players” entering the landscape every day. Does this mean commercial solar is here to stay?

A: The next frontier for solar is the Mid-Atlantic and Northeast. What’s really driving this business and why it’s essential that owners and investors get focused is simple- a demand for lower cost and cleaner electricity. Demand drives everything we do in real estate –we deliver new buildings when the market tells us that people want more, and now we are building solar systems because people want to purchase the output. Policies and incentives help us get the product out the door, but the business case is all about customer demand.  And the pace is quickening-solar installations are up 66% over Q1, 2010.

Q: How sustainable is the business of on site commercial generation, with the tax incentives and other subsidies you mention set to expire down the road?

A: The reality is that the industry is maturing, and policies have helped create a more competitive market that is driving down costs literally every day. Installation costs have declined another 15% year-over-year since 2010. The technology and pricing allows us to see a not too distant future where project economics work without incentives. And for the solar developers that build top tier systems, they and their customers will be rewarded with attractive long term, risk- adjusted returns. So incentives and policies are great, but when they go away it will be because we don’t need them anymore.

Q: So if I am a real estate owner or investor, what’s in this for me?

A: Improved, more valuable assets.  It’s a simple offer-let the solar guys invest millions of dollars of capital into your asset, and they will give you lower, predictable green energy that drives value to the bottom line. Owners and investors like that concept, but often get hung up on making a long term commitment to solar. When done right, owners can retain the flexibility they need and want, and can even get on both sides of the deal if that’s what it takes.    

Q: What role does solar play in the long run?

A: Investment grade assets with reliable, costs effective solar energy will maintain a competitive advantage –higher NOI, differentiated market positioning, and an ability to attract tenants with a mandate for renewables in their portfolio. This is as much about not being left behind as it is about leading. Commercial real estate owners are sitting on the best solar assets in the US-they can either take and keep control of those valuable resources and deploy solar on their own terms, or sit back and wait to be told by their tenants they have to do it to keep their business

Q: Solar is a complicated business. What the best advice you have for owners and investors who are ready to move on this, but don’t want to get burned by doing the wrong deal or deploying the wrong technology?

A: On the technology side, keep it simple. Insist on top tier products that have performed well over many years and deliver only the best warranties. Real estate is a long term business- you don’t want your solar system to be “A for a day”. In terms of deal structure, pick the structures that best match the way you deploy capital and create value. And then work with a solar developer who has a proven track record.

#CRE #finance

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