After nearly two years of planning and negotiations, Portland Habilitation Center Northwest received its first solar panels for an 870-kilowatt solar system at its new industrial facility in Northeast Portland. When completed in fall of 2008, the installation is likely to become Oregon’s largest commercial solar project.

U.S. Bancorp Community Development Corp., a subsidiary of U.S. Bancorp (NYSE: USB), provided the majority of the financing for the system. U.S. Bancorp will own and maintain the solar system while taking advantage of Oregon Business Energy Tax Credits (BETC), which Portland Habilitation Center would not be eligible to receive as a nonprofit. The solar installation is expected to save the Habilitation Center nearly $75,000 in annual energy costs, hedging against rising energy costs, according to Steven McGrath of Solar Venture Partners, which served as the solar consultant on the project.

The installation is one of the first in the state to take advantage of Oregon’s new net-metering law, which increased the maximum size for non-residential net-metered systems from 25 kilowatts to 2 megawatts, creating a bigger incentive for Oregon companies and nonprofits to invest in large-scale solar systems.

Even so, finding third-party financers with an appetite for Oregon BETCs was not easy. “Financial institutions are highly regulated and their level of caution is appropriately higher than other investors,”

McGrath says. Cascade Solar Consulting conducted a feasibility study during the building’s design stage. Dynalectric Oregon, a wholly-owned subsidiary of EMCOR Group, designed and is installing the system and Vancouver, B.C.-based Day4 Energy (TSX: DFE) is supplying the panels. Additional financing came from Energy Trust of Oregon and Meyer Memorial Trust.