Raser Technologies announced significant funding earlier this week from Merrill Lynch for their first 10.5MW power plant in Nevada due to come online in Q3 2008. The funding vehicle is what’s known in the business as a “flip” parternship, where an independent corporate entity (often a LLC) is formed with the funding partner so certain benefits can be distributed to partners as directed by the Managing Members.

C Corporations dictate the benefits are distributed according shareholder percentage. Limited Liability Corporations aren’t bound by that convention so tax benefits for instance, can be distributed as beneficial until some set of requirements are met, then the benefits can be redistributed as agreed. The first tranche appears to be $44M in debt financing over 15 years with tax benefits flowing to Merrill.

Interestingly, using this as a benchmark, the captial cost per MW for the Raser project is $4.2M – higher than the $3M average if all the funds were used for the project. Presumably, the first one will have more expenses than subsequent modules assembled in the same way and the capital cost will be lower over time. Merrill and Raser have an agreement for up to 100MW of projects with options to finance up to 55MW more.