As the Ohio General Assembly approaches the final few months of its 2013 legislative session, attention has been brought to the Senate Bill introduced to repeal the state’s Renewable Portfolio Standard. Ohio State Senator Kris Jordan introduced Senate Bill 34 (SB 34) which, if passed, would “repeal the alternative energy resource requirements imposed on electric distribution and electric services companies to provide, by 2025, 25% of their electric supply from alternative energy.” To put it simply, if passed, this legislation would repeal Ohio’s Renewable Portfolio Standard (RPS), and the Ohio SREC market would be dismantled.
This is not the first time that Senator Jordan has attacked the Ohio RPS; similar legislation was introduced by Senator Jordan in 2012, but those previous bills failed to gain any support. It remains to be seen how SB 34 will move forward in this current legislative session, as it has only been assigned to the Public Utilities Committee. A hearing has yet to be scheduled.
Every month, Sol Systems distributes a newsletter, the Sol Systems Project Finance Journal, to our community of solar developers and investors. The journal features solar finance statistics, trends, industry news, and SREC market information. We gather this information from our relationships and experience aggregating SRECs and financing commercial and utility scale solar projects.
We have included excerpts from our November Project Finance Journal below. If you have any questions about this information, wish to receive our monthly newsletter via email, or have a solar project in need of financing, please contact our team at firstname.lastname@example.org. We would love to hear from you.
Sol Systems attended the grand opening of the new solar energy facility located at KIPP DC’s Douglass Campus in Washington, D.C. The ribbon cutting ceremony took place today, November 14, with Dot Harris from the Department of Energy serving as the keynote speaker.
The 227 kW solar energy system is the second largest solar installation in D.C. Sol Systems financed the solar project in partnership with Washington Gas Energy Systems. Sol Systems also provided the SREC contract. Volt Energy developed the project.
“We are proud to work with local partners, Volt Energy and Washington Gas Energy Systems, to bring innovative solar energy solutions to the District,” said George Ashton CFO of Sol Systems. “This partnership is good for D.C., the environment, and for the students that KIPP DC serves. Through this partnership, we have created electricity savings for the four KIPP DC schools at the Douglass Campus and a unique educational opportunity for students.”
Green State Power, a full service solar integrator based in North Carolina, completed construction of the carport and rooftop structure under an extremely tight deadline, as construction needed to be completed by the time that students and teachers returned to the campus after summer break. Green State Power has a track record of success in both commercial and residential PV and solar thermal projects throughout the Southeast.
Another week, another conference.
Next week, Sol Systems will speak at the Distributed Solar Summit in San Diego, California. Sol Systems CFO, George Ashton, and Senior Associate, Andrew Gilligan, will both be featured on Monday, November 18 during the U.S Distributed Solar Markets: Outlook and Analysis portion of the conference. George will speak about policy and incentive frameworks in New Jersey’s solar market. Andrew will discuss the solar policy and incentive frameworks in New York.
Developers interested in financing options for New Jersey or New York solar projects can contact our project finance team at email@example.com or (888) 235-1538 ext. 2. Our team is happy to discuss your project with you and assess financing opportunities. Solar installers with customers in need of SREC options in New Jersey can contact our SREC services team at firstname.lastname@example.org or (888) 235-1538 ext. 1.
It is no secret that utilities across the country are resisting the growth of distributed solar. This time around, Southern California Edison (SCE), Pacific Gas and Electric (PG&E), and San Diego Gas & Electric (SDG&E), California’s three largest utilities, are grappling with integrating battery-backed solar systems into the grid. The utilities are refusing to integrate solar systems with integrated battery storage systems if both system components are behind the same meter.
This may seem like a trivial issue because battery-backed systems add about 25 percent to the cost of rooftop solar systems and only make up a small part of the solar market. Nevertheless, Bloomberg predicts that battery costs will fall 57 percent from $1,893 per kWh now to $807 per kWh of storage capacity in 2020 making battery-backed systems more attractive to customers. Similarly, Lux Research Inc. forecasts that the global market for solar systems combined with energy storage will rise from less than $200 million this year to $2.8 billion in 2018. Coupled with the fact that California accounts for more than 30% of solar installations in the U.S., these predictions mean the stance of California’s big three utilities’ on battery-backed solar could have a major impact on the growth of solar.
After two successful prior rounds, PSE&G launched their third Solar Loan program and began accepting applications for PV projects on October 31st. The first round of competitive solicitations will close on Tuesday, November 12th. Projects in PSE&G service territory that are eligible for net metering can receive a percentage of project costs upfront as a loan to be paid back with SRECs or cash during the life of the project. The program will accept 97.5MW in both residential and commercial projects. Sol Systems previously wrote about the program here.
Solar Loan Program III will differ from previous procurements in several ways. Unlike previous Solar Loan programs, the floor price per SREC will be determined by a competitive bid-in process. The program will also feature a ten year loan term, down from 15 years in previous rounds. It will not include a call option on SRECs, providing additional security for investors. The available capacity will also be divided into market segments (various types and capacities of residential and commercial projects), meaning increased diversity of project types in the program. The program applicants will now be responsible for administrative costs of the program as well, in the form of per kW fees. Bidders should account for these fees in their floor price.
Sol Systems announced today that it has successfully financed a residential solar portfolio for SunPower Corp. The investment will fund over a thousand solar energy systems for homeowners across the northeastern and southwestern United States. The tax structured investment is part of Sol Systems’ ongoing initiative to bring new tax equity investors into the solar asset class.
Solar panel costs have fallen rapidly in recent years and solar project investments have exploded; however, there remains a shortage of investors who are able to take advantage of the tax credits associated with solar energy system ownership. To address this issue, Sol Systems has devoted itself to bringing new tax equity investors to the solar asset class. Sol Systems has provided tax equity financing for over $100 million in solar projects in 2013, and expects to provide tax equity financing for $200-250 million in 2014, a critical injection of tax equity into the solar market.
As the solar industry continues to expand and grow, states across the country are recognizing the importance of going solar and taking aggressive action to do so. Minnesota is one such state that has recently taken the initiative to expand their solar presence. Minnesota’s H.F. 729 energy law, approved in the spring of 2013, seeks to significantly increase the presence of solar energy in the state’s power supply. While Minnesota passed a first piece of legislation in 2007 that created a Renewable Energy Portfolio Standard for the state, it did not include a specific solar carve-out requirement for the state’s utilities. This most recent law mandates that public utilities, including the state’s biggest utility Xcel Energy, meet a 1.5% solar standard by 2020.
While this percentage may seem low, in order to reach the 1.5% standard, Minnesota’s solar energy capacity would have to increase by 30-fold from the 13 MW currently installed in the state up to 450 MW by 2020. In an effort to comply with these new requirements, Xcel’s leadership has focused on finding new opportunities to expand the presence of renewables in their portfolio.
The Compelling Solar Asset Class
There are many options available to corporations interested in investing in solar projects. The market for investing in solar projects is an expanding financial sector that provides corporate investors with an opportunity to diversify their investment portfolios and develop or expand tax credit platforms. In 2012, the volume of solar projects being installed in the United States grew 76 percent year over year, with 3,313 MW of projects built at an estimated value of $11.5 billion. These solar projects will provide enough electricity to power over 350,000 households in the United States. In 2013, it is projected that the asset class will grow by an additional 29 percent across residential, commercial and industrial, and utility scale solar projects.
Many corporations are joining retailers, tech companies, utilities, and major financial institutions in the solar space with investments both on and off their properties. In numerous locations, the rooftops of Staples, Best Buy, Wal-Mart, IKEA, Kohl’s, and others within the retail industry feature solar arrays. These retailers, as well as many other solar investors, secure reduced energy costs, tax benefits, and clean electricity for their stores, which further company-wide sustainability efforts and appeal to consumers.
Strategies for Solar Investments
There are three primary strategies for corporations to invest directly in the solar asset class and realize the benefits of solar energy: (1) purchasing electricity from an on-site or nearby solar project through a Power Purchase Agreement (PPA), (2) directly purchasing a solar project to provide free renewable energy to a company’s buildings or property, and (3) strategically investing in solar projects to secure long-term cash flows and significant tax benefits. Each is explored below. Read the rest of this entry »
Solar Power International is generally a good time, but this year’s conference in Chicago seemed better than some of the conferences in recent memory. After reflecting on the week, and why this year felt so much better than some other years, here are Sol Systems’ top 5 SPI conference best practices.
1. Set up meetings and locations in advance. SPI has gotten way too big to have impromptu meetings. If you want to meet with someone specific, put the meeting on the calendar (with the right time zone and everyone’s cell phone number), and have an idea of where you will meet more than 5 minutes before the meeting. No matter where the conference is located, you can generally meet: next to the registration area, at lunch tables in the expo hall, established event networking centers, at comfortable chairs outside the expo, “the” coffee shop, or in the lobby of the conference hotel.