Sara Rafalson

Sol Systems CFO George Ashton Delivers Keynote at Washington Jesuit Academy Career Day

Sol Systems CFO George Ashton visits the Washington Jesuit Academy.

This week, Sol Systems CFO George Ashton, delivered the keynote address at the Washington Jesuit Academy’s career day.

This week, Sol Systems CFO, George Ashton, visited the Washington Jesuit Academy to deliver the keynote address at the Academy’s Career Day. Mr. Ashton previously served on the Board of the Washington Jesuit Academy, a middle school that provides a high quality education to boys from low income communities.

During Career Day, or “Dream Day,” as George called it, Sol Systems’ CFO challenged each student to “use the stories and lesson you will hear…to build your own journey and to dream about where you want to be.” Mr. Ashton also emphasized the importance of hard work, and encouraged students to ask for help along the way – because nobody has made it alone. “Inspiration is everywhere,” George added. “Use that inspiration to drive you to your dreams.”

Read the rest of this entry »

Sara Rafalson

Sol Systems to Speak at SEIA Tax & Finance Seminar in New York

Sol Systems will travel to the SEIA Tax & Finance Seminar, and CEO, Yuri Horwitz, will speak on "The Expanding Solar Investor Class."

Sol Systems will travel to the SEIA Tax & Finance Seminar, and CEO, Yuri Horwitz, will speak on “The Expanding Solar Investor Class.”

Several members from the Sol Systems team will be in New York for the SEIA Finance and Tax Seminar on July 25th and 26th.  Sol Systems CEO, Yuri Horwitz, will speak at the conference about Sol Systems’ experience in working with strategic investors, corporate investors, high net worth individuals, independent power producers, private equity funds, family offices, and select developers who are looking to acquire or co-develop renewable energy projects. He will also touch on Sol Systems’ success in addressesing tax issues  by bringing new and non-traditional investors to the table, including independent power producers and non-energy Fortune 500 companies with tax appetite.  Yuri’s speaker panel is entitled The Expanding Solar Investor Class.

To schedule a meeting in New York with a member of the Sol Systems team, please email us at info@solsystemscompany.com.

About Sol Systems

Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

Natacha Kiler

July 2013 Project Finance Statistics

Massachusetts and the abundance of solar activity occurring there is the highlight of this month’s solar finance journal.

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 July 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 finance@solsystemscompany.com.  We would love to hear from you.

Project Finance Statistics

Characteristics of “Hot Projects”

Sol Systems finds that projects with the following characteristics are most likely to succeed. The overall quality of a project depends on the qualitative aggregate of the following characteristics.

Read the rest of this entry »

Eric Scheier

New Jersey’s PSE&G Announces Solar Loan Program III

PSE&G, the largest utility in New Jersey, has announced a third iteration of its solar loan program.

PSE&G, the largest utility in New Jersey, has announced a third iteration of its solar loan program.

After finishing two rounds of its successful solar loan program, New Jersey’s Public Service Electric and Gas Company (PSE&G) has received approval to offer a third round of loans to 97.5 MW worth of residential and non-residential solar projects and is expected to announce a start date shortly. Solar Loan III is similar to the previous two programs in that recipients have the option of paying off the loan with the Solar Renewable Energy Certificates (SRECs) that the system produces over time. The value of these SRECs will be determined by the higher of the market price or the pre-agreed-upon floor price for each system. However, unlike previous programs, the floor price for each system’s SRECs will be determined by a bid process instead of a preset schedule.

Applications will consist of a description of the system, typical loan application information, and a proposed SREC floor price “bid.” The applications will be sorted by bid, lowest to highest, and then approved in this order until the capacity for the solicitation has been filled. Loan awards will be calculated based on the net present value of the SRECs that the system is estimated to be able to produce over the course of the loan term (10 years) at the bid SREC floor price. According to draft documents, the interest rate will be 11.179% per year for all non-residential loans (down from 11.3092% in Solar Loan II). PSE&G has yet to announce the interest rate for residential loans (which stood at 6.5% in Solar Loan II), but there is some indication that the interest rate may be in the neighborhood of 11% as well. Previously, floor prices for SRECs in the 58.83MW Solar Loan II program ranged between $330-450 per SREC according to the program’s predetermined schedule. Right now, New Jersey SRECs are clearing at around $120, meaning that competitive bids for this program will likely come in much lower than the preset floor prices in Solar Loan II.

Read the rest of this entry »

Eric Scheier

New York Legislature Misses Opportunity to Sign NY Solar Bill into Law

The 32 MW Long Island Solar Farm was one of the largest projects implemented as a result of the NY-Sun Initiative.

The 32 MW Long Island Solar Farm was one of the largest projects implemented as a result of the NY-Sun Initiative.

The New York legislative session ended last week without the much anticipated enactment of the NY Sun Act of 2013. Governor Cuomo was unable to sign the NY Sun Act of 2013 (A.5060b/S.2522) into law following this year’s legislative session, as the House and Senate did not follow through with a reconciliation of the two bills prior to the end of proceedings.

The hope for major clean energy legislation in New York began on Earth Day as the Senate unanimously passed its version of the bill.  On June 20, 2013, the Assembly then followed with a promising vote of 76-16; however, this vote favored a different version of the bill.  With two versions of the bill lying on the table, reconciliation would need to occur in order to send the bill to the Governor’s desk for a signature. Time got the best of the House and Senate as they were unable to produce a compromised version of the long-term solar policy, leaving New York’s solar industry without the clean energy legislation it was hoping for.

Read the rest of this entry »

Anna Noucas

Massachusetts DOER Files Emergency Regulation, Revising Rules for Current Solar Carve-Out Program

In the June 7, 2013 Solar Stakeholder Meeting in Boston, the Massachusetts Department of Energy Resources (DOER) announced that they would plan to file an Emergency Regulation by the end of June 2013, to revise the rules by which the current RPS Solar Carve-Out program will be regulated. The DOER met this goal by the filing this Emergency Regulation, which became effective immediately upon filing, on June 28, 2013. The Emergency Regulation will help to cover or mitigate any losses that developers would have experienced had the DOER limited the current program to strictly 400 MW, while also managing the potential cost impact to ratepayers, given there is potential for the program to expand past or end up less than 400 MW. To address this concern in the change in size of the program, the compliance obligation formula will be revised from 400 MW to the new Program Capacity Cap which will be announced by the DOER upon completion of all projects in July 2014.

Massachusetts DOER Files Emergency Regulation, Revising Rules for Current Solar Carve-out Program

Massachusetts DOER Files Emergency Regulation, Revising Rules for Current Solar Carve-out Program

A detailed version of the revised regulation is available on the DOER’s website, along with a list of projects that (1) have been determined to be qualified or submitted an administratively complete application under the original 400 MW capacity limit, and (2) those project that have applied outside the 400 MW capacity limit. The criteria for receiving a Statement of Qualification under the current Solar Carve-Out Program, outlined in the Emergency Regulation, will vary based on the project’s size and also the status of the project’s application, as outlined below.

Projects Greater than 100 kW

Projects greater than 100 kW must follow strict construction timelines in order to ensure their spot in the current 400 MW Solar Carve-Out Program. If a project has been issued a Statement of Qualification or has an application deemed administratively complete by the DOER, it will keep its qualification and status in the current program if it can meet the construction requirements and timeline. Projects outside the 400 MW capacity limit must have an Interconnection Service Agreement fully executed by the customer and utility, dated on or before June 7, 2013. In addition, they must also meet the construction timelines in order to be awarded a Statement of Qualification under the current program.

Construction Timelines

The construction timelines for projects greater than 100 kW are as follows:

  • Receipt of Authorization to Interconnect from the local distribution company by December 31, 2013.
  • Units that do not receive an Authorization to Interconnect by December 31, 2013 may receive an extension to June 30, 2014, if it can be demonstrated to the DOER’s satisfaction that the Unit has expended at least 50% of its total construction costs by December 31, 2013.
  • If a Unit has not received the Authorization to Interconnect as of June 30, 2014 but can demonstrate to the DOER’s satisfaction that the missing Authorization is due to delays caused by the local distribution company, or due to remaining steps required by other parties for safe and reliable interconnection, the Statement of Qualification will be extended until the Authorization is received or denied.

Projects Equal to or Less than 100 kW

Regardless of their placement in the 400 MW capacity limit, projects equal to or less than 100 kW, or designated as a Community Solar Garden by the MassCEC, will be qualified under the current program provided they submit a Statement of Qualification Application to the DOER, and have an Authorization to Interconnect by the later of December 31, 2013 or the effective date of the new solar program.

Timeline for Qualification

All projects qualifying under the current 400 MW Solar Carve-Out Program will have received a Statement of Qualification no later than December 31, 2013. Any projects failing to meet the criteria and construction timelines outlined above with have their Statement of Qualification revoked. This will help to ensure that the compliance obligation of the current solar program is not extended by an additional year, creating additional costs to the ratepayer. As mentioned above, the compliance obligation formula will then be revised from 400 MW to the new Program Capacity Cap, should it exceed 400 MW, to be announced by the DOER upon completion of all projects in July 2014.

Next Steps for the Emergency Regulation

Although the Emergency Regulation has been filed and may now be considered in effect, a Public Hearing and comment period will soon be scheduled and held, in accordance with administrative procedures. The regulation will remain in effect for 90 days; the DOER will have the opportunity to make the regulations permanent, and will move quickly to promulgate the final regulation so as to keep the rules in effect throughout the construction timelines and commencement of the new Solar Carve-Out Program. The DOER recognizes the need to complete this process quickly and efficiently, and without deviation, to avoid any confusion or concerns in proceeding with the financing and construction of projects.

Sol Systems will continue to follow the progress of this Emergency Regulation and provide updates on our blog. If you have a project that is eligible for the current Solar Carve-Out Program and is in need of financing, please contact finance@solsystemscompany.com with information on your project, including financing needs, and we will be happy to follow up. Sol Systems also currently offers three SREC agreements to customers in Massachusetts: Sol Annuity, Sol Brokerage, and Sol Upfront. If you are interested in becoming a customer, please contact info@solsystemscompany.com for more information.

About Sol Systems

Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

For more information, please visit www.solsystemscompany.com.

Amber Rivera

Updates to the Massachusetts 400-MW Solar Carve Out Program that You Didn’t Hear at the June Stakeholder Meeting

In the excitement of the recent stakeholder meeting that the Massachusetts Department of Energy Resources (DOER) held on June 7, which focused on the emergency regulation to address the over-subscription of the 400-MW solar carve-out program and the proposed policy for the post-400 MW program, some important updates to the current 400-MW program have not received due attention. As of June 7, 2013, the proposed changes to the 225 CMR 14.00 regulation went into effect, with no changes made to the red line version that the DOER proposed to the House at the end of April. Here, we summarize some of the most pertinent changes relevant to solar developers and investors who operate in the Massachusetts market.

Adjustment to the Rules of the Solar Credit Clearinghouse Auction

The updated regulation now states that “Any entity that owns Solar Carve-Out Renewable Attributes is eligible to make deposits” of SRECs into the annual July auction run by the DOER. Previously, the DOER restricted the type of entity who could deposit SRECs to only system owners or operators; essentially, unless you were the first entity to receive the SREC into your NEPOOL account following generation, you were excluded from the auction. Now, you simply must have possession of an SREC in your NEPOOL account to participate in the auction. This change will open the auction up to a much larger number of participants, and may result in a greater number of SRECs being deposited into the auction. The 2013 auction has been closed to further deposits, and will begin with the first round on Friday, July 26th.

Prior to the revisions to the regulation, market participants generally understood that any SRECs that do not clear in the first, second, or third rounds of the auction and thus re-mint with a 3-year shelf life are not eligible to be placed into future years’ auctions. The DOER has inserted a clause into the regulation that explicitly states this rule, which was not formally included prior to the revision.

10-Year Opt-In Term for the 400 MW Program

The revised regulation removes the control mechanism previously in place for the length of the Opt-In Term. Before this change, the DOER was mandated to reduce or increase the original Opt-In Term set at 40 quarters in 2010, as follows:

  • Each time the number of SRECs deposited into the annual auction reached 10 percent of the current year’s compliance obligation, the Opt-In Term assigned to projects that qualified for the 400-MW carve-out program following the annual announcement at the end of July would be reduced by four quarters
  • Each time the amount of compliance obligation met with ACP payments reached 10 percent of the current year’s compliance obligation, the Opt-In Term assigned to projects that qualified for the 400-MW carve-out program following the annual announcement at the end of July would be increased by four quarters

In addition, the regulation set bands around this mechanism; the Opt-In Term could not be reduced by more than eight quarters in any given year, and for 2010-2016 there was a minimum Opt-In Term of five years.

The revised regulation fixes the Opt-In Term to 40 quarters (10 years), for all projects, regardless of whether they come online during a period of oversupply or under supply in the market. This is good news for commercial project developers and financiers, and for homeowners, as it removes the difficulty of trying to predict when a reduction in the Opt-In Term may occur, the result of which would be decreased revenue and a longer payback timeline on the system.

Increase to the SREC Demand in 2013

The DOER has increased the Total Compliance Obligation for the 2013 compliance year, from 135,495 MWh, or SRECs, to 189,297 MWh/SRECs. The increase is thanks to the removal of the component of the compliance obligation formula that subtracted the MWh volume of compliance met with ACP payments from two years prior. This adjustment exemplifies the DOER’s commitment to supporting SREC prices; however, even with this increase the market will be oversupplied in 2013 due to the substantial acceleration of solar installation in Massachusetts in 2012 and the first quarter of 2013.

Timeline and Queue for Applications to Get Into the Second Solar Carve-Out Program

The regulation has been revised to begin to handle the transition between the first and second solar carve-out programs. The DOER has created a new concept, the Assurance of Qualification, which will in a way act as a soft Statement of Qualification until the rules for applying into the second program are drafted, approved, and implemented. In other words, projects that do not qualify for the first program, assuming they meet the requirements specified in the regulation and in the Assurance of Qualification Guidelines, will be given assurance by the DOER that they will be eligible to produce SRECs in the second program.

In order to encourage complete and accurate applications, the DOER will introduce a new timeline for the expiration of a Statement of Qualification issued to a project. The details have not been finalized, but are expected to be released in the final version of the Assurance of Qualification Guidelines.

A Lot of DOER Tinkering but Progress in the MA Solar Market

Each of these changes will help to provide clarity for the market in the coming years, for both the current program and the post-400 MW program. The proposed policy for the second solar carve-out program, although not finalized, has hopefully provided comfort, if not certainty, to developers and project owners on how to apply and become qualified for the next program, so that they can continue to develop projects with confidence.

About Sol Systems

Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

For more information, please visit www.solsystemscompany.com.

Sara Rafalson

Sol Systems Welcomes Summer Interns

Sol Systems is proud to announce the arrival of this year’s summer interns. Welcome to the team, Sanjay, Eric, and Austen!

IMG_5967

Sanjay Gopinath

Sanjay Gopinath joins Sol Systems as a SREC Portfolio Intern. Prior to joining Sol Systems, Mr. Gopinath worked as a quantitative analyst at an energy trading firm and as a consultant focused on energy markets. As a quantitative analyst, Mr. Gopinath analyzed the PJM FTR market, built tools for traders and developed trading strategies. As a consultant, Mr. Gopinath analyzed base load electricity prices in the NordPool, performed forensic accounting to assess damages associated with incomplete power plant construction, and constructed tables and charts for international litigation. Mr. Gopinath holds a Bachelor of Arts in Mathematics and a Bachelor of Arts in Economics from Johns Hopkins University. He is currently pursuing a Master’s Degree in Applied Mathematics and Statistics with a focus on commodity markets at Johns Hopkins University.

Eric Scheier

Eric Scheier

Eric Scheier joins Sol Systems after finishing his junior year at the University of North Carolina at Chapel Hill, where he studies Environmental Science and Economics. As an intern at Sol Systems, he supports customer service initiatives, assists with marketing efforts, and conducts research for the project finance arm of the company. Prior to joining Sol Systems, he spent time in Thailand studying the environmental impacts of using microgrids for rural electrification. He has interned at the Sustainability Office at UNC, where he curated the university’s sustainability report.

Austen Sybert

Austen Sybert

Austen Sybert joins Sol Systems while completing his Bachelor of Science in Environmental Engineering, Entrepreneurship, and Management at Johns Hopkins University. At Sol Systems, Mr. Sybert’s primary responsibilities include supporting SREC operations, conducting project finance research, blogging, and processing registration materials for SREC projects. Mr. Sybert’s prior solar experience includes designing, building, and installing an off-grid solar home system in rural Nicaragua with the NGO blueEnergy.

About Sol Systems

Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

For more information, please visit www.solsystemscompany.com.

 

Sara Rafalson

MDV-SEIA is Hiring an Associate Director

MDV-SEIA represents the interests of photovoltaic and solar thermal equipment manufacturers, installers, distributors and component suppliers.

MDV-SEIA represents the interests of photovoltaic and solar thermal equipment manufacturers, installers, distributors and component suppliers.

Disclaimer: Please note that Sol Systems is posting this opportunity on behalf of MDV-SEIA. Interested applicants should contact info@mdv-seia.org for more information. 

The Maryland-DC-Virginia Solar Energy Industries Association (MDV-SEIA) Board of Directors is seeking an Associate Director (AD) whose primary responsibilities will be to administer the daily functions of the organization, including supporting membership needs and collecting membership dues. This is an exciting opportunity to join one of the most dynamic renewable energy industry associations in the nation, and interface with many of the most promising companies and entrepreneurs in the industry. The AD will support the planning and execution of meetings and events, including the annual conference.  The AD will also ensure the Board is supported in their duties, manage intern staff, coordinate other volunteers, and support fund raising.  The Associate Director reports to the Board and executes at their direction.

Read the rest of this entry »

Natacha Kiler

June 2013 Solar Project Finance Statistics

Massachusetts SREC policy discussions dominated the project finance headlines this week, inspiring a hesitantly optimistic outlook among developers and investors alike.

This month’s project finance journal includes updates on hot solar markets, PPA and FIT rates, and solar finance trends and observations.

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 June 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 finance@solsystemscompany.com.  We would love to hear from you.

Project Finance Statistics

Characteristics of “Hot Projects”

Capacity: 100 kW – 24 MW
Average Capacity: 3,543 kW
Competitive all-in (asking) prices* currently include:

  • <500 kW: $2.12 – $3.03/Watt
  • 500 kW – 2 MW: $1.75 – $3.15/Watt
  • >2 MW:$1.75 – $3.02/Watt

Read the rest of this entry »

Austen Sybert

Financing Projects with SRECs: Maryland, Massachusetts, and Washington, DC Webinar Recap

The Solar Energy Industry Association (SEIA) recently hosted a webinar featuring two Sol Systems team members as SREC experts.

On June 13, the Solar Energy Industry Association (SEIA) hosted a webinar featuring two Sol Systems team members: Vice President and CFO, George Ashton, and Renewables Trader Amber Rivera. George and Amber spoke alongside Scott Wiater of Standard Solar and Mike Judge from the Massachusetts DOER.  The webinar, which was moderated by SEIA Senior Vice President of State Affairs Carrie Hitt, focused on how Solar Renewable Energy Credit (SREC) market conditions and legislation affect solar project development in Maryland, Massachusetts, and the District of Columbia. In case you missed it, here are the highlights.

George and Amber began by discussing the historical dynamics, current SREC prices, and future prospects for the each of the Maryland, Massachusetts, and District of Columbia SREC markets. Our SREC prices are also available to the public.

Read the rest of this entry »

Anna Noucas

Connecticut Utilities Expect Significant Number of Bids for Year Two of the LREC/ZREC Program

In late spring, the Connecticut Light & Power Company (CL&P) and the United Illuminating Company (UI) announced the joint issuance for the second year of the Low and Zero Emissions Renewable Energy Credit (LREC and ZREC) Program. The utilities issued the program in the form of a Request for Proposal (RFP) for bids for 15 year contracts with LREC and ZREC projects larger than 100 kW (AC).

2013 Program Summary

The program will include three separate tiers for bidding: LREC, Medium ZREC, and Large ZREC. The LREC or Low Emission Renewable Energy Credit tier will include all qualified renewable energy projects less than or equal to 2,000 kW that emit no more than 0.07 pounds per MWh of nitrogen oxides, 0.10 pounds per MWh of carbon monoxide, 0.02 pounds per MWh of volatile organic compounds, and one grain per 100 standard cubic feet. The Medium ZREC or Zero Emission Renewable Energy Credit tier will include all qualified projects (i.e. solar, wind, and hydro) between 100 kW and 250 kW in. Finally, the Large ZREC tier will include all qualified projects (i.e. solar, wind, and hydro) between 250 kW and 1 MW in size.

Read the rest of this entry »

Eric Scheier

Sol Systems’ George Ashton Named as Finalist for CFO of the Year

George Ashton, CFO of Sol Systems, is a finalist for the Washington Business Journal's CFO of the  year award.

George Ashton, CFO of Sol Systems, is a finalist for the Washington Business Journal’s CFO of the year award.

The Washington Business Journal has named Sol Systems’ CFO George Ashton as a finalist for its CFO of the Year Award. The award honors the financial professionals in Greater Washington for outstanding performance in their roles as corporate financial stewards. The awards ceremony will take place at 11:30 on July 18 in Tysons Corner, Virginia.

George, co-founder of Sol Systems and vice president of Sol Systems, has been a critical contributor to the vision and conceptual development of the firm’s renewable energy credit and solar project finance businesses. His current responsibilities include on-going ideation and process implementation with the goal of ensuring that Sol Systems is a transformative financial intermediary in the renewable energy finance space. In addition, George manages the Sol Systems’ SREC portfolio for 3700 solar assets and leads the investor advisory group, which provides investors with opportunities to deploy capital in the renewable energy asset class, including tax equity and take-out investments for solar projects.

For more information or if you are interested in attending the ceremony, please contact pr@solsystemscompany.com.

Read the rest of this entry »

Anna Noucas

Massachusetts DOER Updates Solar Stakeholders on Emergency Regulation and Proposed Post-400 MW Policy

This morning was a big one for the Massachusetts solar market. After the surprising announcement that the Massachusetts Department of Energy Resources (DOER) had already received well over 400 MW of Statement of Qualification Applications (SQA) for the Solar Carve-Out Program, many developers, investors, and other interested parties faced the very real possibility that projects into which they had sunk significant capital and time would not be eligible for SRECs under the 400 MW cap. To follow up on their announcement and provide structure for the pending applications, the DOER specified that projects would need to submit SQAs by June 7th to be considered under the current 400 MW program and then subsequently published a list to outline the status of these applications. Consequently, over the last week in parallel with these announcements the amount of project applications swelled to over 800 MW.

Hundreds attend the Massachusetts DOER Solar Stakeholder meeting at the State House in Boston on June 7th.

Hundreds attend the Massachusetts DOER Solar Stakeholder meeting at the State House in Boston on June 7th.

All this transformed what was supposed to be a stakeholder meeting solely regarding plans for the post solar 400 MW program into a discussion on how the DOER would address the accelerated growth of development of the Massachusetts solar market. Discussion of this emergency regulation lasted for the first thirty minutes; the remaining hour and a half concentrated on plans for the post 400 MW solar carve-out program, although it can no longer technically be called “post-400 MW”, given that the total capacity that is either qualified or under review now totals over 900 MW. There were several interesting developments, and although it remains only a proposal at this point, it is clear the DOER remains committed to the growth of solar and trying to create linear growth towards Governor Patrick’s goal of 1600 MW of solar by 2020. More analysis on the likely form that the post-400 MW program will take will be provided by Sol Systems next week, during a webinar hosted with SEIA, featuring Michael Judge of the DOER.

Dwayne Breger, Director of Renewable and Alternative Energy Development at the DOER, laid out a few possible actions, one of which was simply doing nothing. Fortunately, he soon after announced that the DOER would file an emergency regulation to address the oversupply, which was greeted by applause from the entire room. The stated goal of the emergency legislation is to allow the 400 MW cap to expand to accommodate larger projects that are well invested in the development cycle, as well as small-scale solar projects given their short development timeline.

Read the rest of this entry »

Sara Rafalson

Sol Systems Featured in Environmental Entrepreneurs’ Clean Energy Jobs Roundup

Environmental Entrepreneurs has highlighted Sol Systems in its most recent Clean Energy Jobs Roundup.

Environmental Entrepreneurs has highlighted Sol Systems in its most recent Clean Energy Jobs Roundup.

Sol Systems was featured in the Environmental Entrepreneurs’ (E2First Quarter 2013 Clean Energy Jobs Roundup. In these quarterly reports, Environmental Entrepreneurs (E2) tracks and compiles domestic clean energy and clean transportation job announcements from media reports, official announcements, and other sources to demonstrate how clean energy and transportation creates high quality jobs across the country.

In the report, Sol Systems as a “solar finance firm at the center of a growing industry.” The report suggests that Sol Systems’ renewable energy financial services play a crucial role in the renewable energy market and are part of the reason that  ”clean energy and clean transportation are breathing new life into domestic manufacturing and creating high-quality jobs for workers across the country.”

Read the rest of this entry »

Sara Rafalson

Sol Systems to Host Project Finance Workshop Thursday, June 20

MDV-SEIA represents the interests of photovoltaic and solar thermal equipment manufacturers, installers, distributors and component suppliers.

MDV-SEIA represents the interests of photovoltaic and solar thermal equipment manufacturers, installers, distributors and component suppliers.

Sol Systems will host and sponsor an interactive solar project finance workshop and networking event on Thursday, June 20 in partnership with the Maryland D.C. Virginia Solar Energy Industry Association (MDV-SEIA). During the hands-on workshop, Sol Systems’ CEO, Yuri Horwitz, and Senior Vice President of Finance, Rafael Alfonzo, will share strategies for successfully financing commercial solar projects, while also providing opportunities for active participation and questions. The workshop will take place in the 2nd floor board room of the Sol Systems’ offices in Washington, D.C.  from 5-8 PM. Refreshments will be provided, and there is no cost to attend. Current and prospective MDV-SEIA members should contact pr@solsystemscompany.com to be added to the guest list.

As an industry leader in renewable energy project finance, Sol Systems offers a number of resources such as workshops and solar finance solar financing webinars in order to share the knowledge and tools that drive project development. Please contact us at finance@solsystemscompany.com for more information on our project financing services for developers, or how we help investors deploy capital in the renewable energy asset class.

Read the rest of this entry »

Eric Scheier

Sol Systems to Speak on Tax Equity at Regional Conference

Distributed Solar East 2013 is an opportunity for the distributed solar community to connect and get updates on successful strategies for funding growth and financing distributed solar projects.

Sol Systems CEO, Yuri Horwitz, will speak on how to secure tax equity for solar projects at Distributed Solar East this week.

Sol Systems CEO Yuri Horwitz will be attending the upcoming Distributed Solar East Conference in Washington, D.C. The event will be held June 4-6th and will include dozens of expert speakers and hundreds of renewable finance professionals. Yuri Horwitz, Sol Systems’ CEO and co-founder, will be featured on Wednesday the 5th in a panel entitled “How to Secure Tax Equity,” sharing his expertise on securing tax equity investment in the growing and complex solar industry. Yuri will join executives from JP Morgan, Credit Suisse, and other financing institutions to discuss the market outlook, potential and viability of different tax equity investment structures, and factors that drive solar investor decisions.

Read the rest of this entry »

Anna Noucas

Sol Systems to Attend DOER’s Massachusetts Solar Stakeholders Meeting on June 7th

Massachusetts’ Department of Energy Resources (DOER) will be holding a public Solar Stakeholder Meeting this Friday, June 7, 2013 from 10:00am to noon in the Gardner Auditorium of the State House in Boston, where they will present a draft policy proposal for the next solar program. The DOER will also shed some light on how it plans to proceed with the accelerated amount of Statement of Qualification Applications (SQA) it has received as part of the 400 MW program.

Sol Systems team members will attend the DOER's Solar Stakeholder meeting on June 7th in Boston, MA.

Sol Systems team members will attend the DOER’s Solar Stakeholder meeting on June 7th in Boston, MA.

The DOER followed sent an email on Monday, June 3, 2013 stating that a list of projects that have sought qualification for the 400 MW program is now posted on the DOER’s website. This list includes a breakdown of qualified projects or administratively complete applications that are considered to be within the 400 MW cap program, and a queue of projects that are beyond the 400 MW cap. A number of projects that are well into construction, financing, and other economic commitments may be at risk of not qualifying for the first program. With this in mind, the DOER intends to maintain a healthy and confident solar market as the transition to the next (post-400 MW) policy program begins. In order to do so, the DOER plans to file an emergency regulation sometime this month. More details will be provided on this emergency regulation at the Stakeholder Meeting on Friday.

Sol Systems will be attending this meeting and welcomes any developer or installers to contact finance@solsystemscompany.com to set up a meeting. Please provide us with information on your company and times you may be available that afternoon. We will then put you in touch with the appropriate Sol Systems team member for you to meet with.

Read the rest of this entry »

Jessica Robbins

Minnesota Embraces Aggressive Solar Standard

Solar in Minnesota is set to increase by a factor of 30 thanks to the carve-out and associated incentives

Solar in Minnesota is set to increase by a factor of 30 thanks to the carve-out and associated incentives

Last week the state of Minnesota officially enacted a solar carve-out of 1.5% by 2020, totaling 450MW of capacity, above and beyond the existing renewable energy standard (RES) of 25% renewable energy by 2025. The carve-out applies to investor-owned utilities (IOUs) and affects about two-thirds of electricity sales in the state. Due to a compromise made early in the bill’s negotiations, certain large industrial electricity consumers like iron mining operations and paper mills are exempt from the standard, making the carve-out in practice about 0.88% of total retail electric sales. Provisions in the bill also create a production-based incentive (PBI) for small projects; community solar gardens; an expansion on the upper size limit for net metering with IOUs; and a standard offer program for projects 1MW and smaller that IOUs may choose to enact.

The bill includes a 10% standard for small projects capped at 20kW each, resulting in a 45MW set-aside for residential and light commercial development. The set-aside is supported by a production-based incentive paid out over 10 years for systems 20kW and under in Xcel Energy’s territory. The PBI will open in 2014 and stay open for five years, with $5 million allocated each year. The program must be designed by the utility and approved by the commissioner of commerce.
Read the rest of this entry »

Anna Noucas

Massachusetts DOER Receives Over 400 MW of Administratively Complete Applications

On May 29, 2013, the Massachusetts Department of Energy Resources (DOER) released an important announcement on the status of the Massachusetts Solar Carve-out Program. In recent months, the growth of development in Massachusetts has accelerated and the DOER has received a tremendous volume of State of Qualification Applications (SQA) for the Solar Carve-out Program. As the DOER noted in its announcement, they have received applications for over 550 MW of solar that have either been qualified or are under review.

The Massachusetts DOER is certain that more than 400 MW of the 550 MW of applications are administratively completed.

The Massachusetts DOER is certain that more than 400 MW of the 550 MW of applications are administratively completed.

With this large volume of applications, the DOER is certain that more than 400 MW of the 550 MW of applications are administratively completed. Even with this news, as the DOER has done in the past, they will continue to accept applications and allow two weeks for applicants to address any deficiencies before rejecting any applications. However, due to the anticipated June 7th announcement date for the new regulation, the DOER expects that applications received after this date will be reviewed under the revised regulation.

No later than Tuesday, June 4th, a list of current projects that have received or will receive a State of Qualification will be posted on the DOER website in order of their eligibility for qualification. These will be projects that have SQAs deemed administratively complete but are beyond the 400 MW cap of qualified capacity. The DOER will also post a list of pending applications under review.

Read the rest of this entry »

Anna Noucas

SRECDelaware Spot Market Auction Produces Low SREC Prices

As part of the 2013 Delaware Procurement Program, SRECDelaware held a Spot Auction through the SRECDelaware platform for owners of existing SRECs generated from June 2009 until today to bid to sell their SRECs. The auction was held between May 15th and May 22nd. Delmarva Power anticipated purchasing between 2,000 and 6,000 SRECs total with all bids evaluated solely on bid price with no additional credit provided for Delaware labor or equipment. All winning bidders will be paid based on their bid price less an 8% commission deducted from their final payment.

The weighted average price of SRECs sold in the SRECDelaware Spot Auction was $33.94/SREC.

The weighted average price of SRECs sold in the SRECDelaware Spot Auction was $33.94/SREC.

Shortly following the close of the auction, on May 24, 2013, SRECDelaware announced the results. A total of 2,978 SRECs were purchased out of a total of 5,394 SRECs entered into the auction. The weighted average price of SRECs sold was $33.94/SREC, with a low price of $1.50/SREC and a high of $45.00/SREC. This weighted average price is lower than where the market currently stands. Delaware 2012 SRECs are currently bid at $35/SREC and offered at $45/SREC, with the majority of the volume trading at $40/SREC.

Sol Systems bid our customers’ SRECs into the auction at fairly high prices in an attempt to sell them at higher prices than what we have been able to achieve on the spot market and through direct relationships this year. Although Sol Systems was unable to secure any SRECs through the SRECDelaware Spot Auction, this week we were able to sell the remainder of our customers’ SRECs at $40/SREC, less our transaction fee, for a final price of $35.00. So far in 2013, the weighted average price of our DE SREC sales is $39.36/SREC. Sol Systems currently offers our Sol Brokerage solution for photovoltaic systems located in Delaware. If you are interested in becoming a Sol Brokerage customer, please email info@solsystemscompany.com for more information.

About Sol Systems

Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.
For more information, please visit www.solsystemscompany.com.

Sara Rafalson

Webinar Invitation – Financing Projects with SRECs: Maryland, Massachusetts, and Washington, DC

Join Sol Systems, SEIA, Standard Solar, and the Massachusetts DOER as they discuss strategies for financing solar projects with SRECs.

Join Sol Systems, SEIA, Standard Solar, and the Massachusetts DOER as they discuss strategies for financing solar projects with SRECs.

SRECs have been critical to driving solar development on the East Coast. However, as market conditions become increasingly complex, what is the best strategy for financing solar projects in these SREC markets? Join Sol Systems, SEIA, Standard Solar, and the Massachusetts DOER on Thursday, June 13 at 1:00 PM as panelists:

  • Debate strategies for financing projects in three most promising of the East Coast SREC markets – Maryland, Massachusetts, and Washington, DC
  • Discuss factors that may affect the value of this commodity-based incentive
  • Discuss SREC market oversupply and the feasibility of securing a long-term contract in these markets

Attendees will deepen their understanding of

  • Supply and demand dynamics in the MD, MA, and DC markets
  • Recently passed and pending legislation, and how it will affect SREC markets
  • Whether or not long term contracts opportunities exist in the markets and if they don’t the best SREC Strategy in each market
  • Factors that make each market unique and how that affects prices
  • Spot market and process for long term strips in each market
  • How to finance large commercial projects in SREC states

Who should attend:

  • Developers in developing projects in the Maryland, Massachusetts & DC SREC markets
  • Solar investors looking to gain access to the MD, MA & DC markets
  • Solar Installers operational or hoping to gain access to the MD, MA or DC markets

Speakers include:

  • Carrie Hitt, Senior Vice President of State Affairs, SEIA
  • George Ashton, Vice President & CFO, Sol Systems LLC
  • Michael Judge, Associate RPS Program Manager, Massachusetts Department of Energy Resources
  • Amber Rivera, Renewables Trader, Sol Systems LLC
  • Scott Wiater, President, Standard Solar

Register today.

Sara Rafalson

Sol Systems Welcomes Alexandra Mas to the Team

In the past several months, Sol Systems has expanded and has hired sharp, passionate, and energetic team players to drive innovation and propel the solar industry forward. This week, Sol Systems is proud to announce the arrival of our latest new hire, Alexandra Mas.

Alexandra S. Mas

Sol Systems welcomes Alexandra Mas to the team.

Sol Systems welcomes Alexandra Mas to the team.

Analyst

Prior to joining Sol Systems, Ms. Mas was part of the Operations Team with a leading renewable energy company in the D.C. metropolitan area. In her previous role, Ms. Mas worked with incentive rebate programs and state grants on behalf of qualifying solar clients. She also guided residential and commercial system owners through the interconnection process. Ms. Mas has expertise in providing sales support through development of proposals for potential commercial and residential clients. Ms. Mas conducted research on ever-changing local, regional and national incentive programs concerning renewable energy as part of ongoing marketing initiatives. Read the rest of this entry »

Amber Rivera

New Law in Maryland will Add Approval and Financing Requirement for Solar PV Systems 2 MW and Up

nixon

Governor O’Malley of Maryland signed Senate Bill 0887 into law on Thursday, May 16th 2013, effectively adding a new approval process and financing requirement for certain large PV solar systems. The Bill will require systems that are 2 MW or larger to file for approval to construct from the Public Service Commission (PSC), six months ahead of construction. This will apply to systems that are exempt from obtaining a Certificate of Public Convenience and Necessity (CPCN), the licensing requirement for the construction of a generating station in Maryland.

Solar PV systems that meet either of the following criteria do not have to file for a CPCN:

a)    Does not exceed 70 MW; Produces onsite electricity; At least 80% of total electricity produced is consumed on-site

b)    Does not exceed 25 MW; At least 20% of total electricity produced is consumed on-site

With the new law in place, systems that are 2 MW or larger, and do not meet either of these two criteria, must seek the newly required approval from the PSC. The system will have to file for approval six months prior to construction. A “deposit” of one percent of total installation costs is an application requirement, and will be held in escrow by the PSC. Once the project begins construction, the deposit will be refunded. Systems will have 18 months to begin construction following approval to construct.

If construction does not begin within 18 months, the deposit will be lost, and allocated to the Maryland Strategic Investment Fund. It seems that the system would then have to re-apply for PSC approval to construct, including submitting a new deposit, to be reconsidered. There may be exceptions to this rule, if an extension of the initial 18 months is granted by the PSC. The Bill states that “The Commission may grant the [extension] request based on factors the Commission considers compelling, including the occurrence of events outside the person’s control.” The Commission has not yet issued guidelines or comments on how or when it plans to implement the law, or whether the law will apply to existing projects that have not yet reached COD.

The new requirement will not add any additional overall cost to solar projects; however, it will shift a portion of the installation costs to an upfront payment in the form of the deposit. The below table shows the hypothetical deposit—one percent of installation costs—for a range of system sizes. Assumed installation costs are what Sol Systems is currently seeing in the Maryland solar market.

Project Size (MW)

Install Cost ($/kW)

Install Cost ($)

Deposit ($)

2

$2,250

$4.5 million

$45,000

5

$2,000

$10 million

$100,000

10

$1,750

$17.5 million

$175,000

20

$1,750

$35 million

$350,000

Sol Systems is continually monitoring the activity of the Maryland PSC and General Assembly for important updates relevant to solar financing and SREC markets. Please contact info@solsystemscompany.com with questions about the Maryland solar market.

 About Sol Systems 

Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

For more information, please visit www.solsystemscompany.com.

Natacha Kiler

May 2013 Solar Project Finance Statistics

Every month, Sol Systems distributes a newsletter, the Sol Systems Project Finance Journal, to our community of solar developers and

Sol Systems' investor network is actively seeking California projects. Projects can be 10-20 MW in size and in need of tax equity, or mid-size commercial projects seeking take-out financing.

Sol Systems’ investor network is actively seeking California projects. Projects can be 10-20 MW in size and in need of tax equity, or mid-size commercial projects seeking take-out financing.

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 May 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 finance@solsystemscompany.com.  We would love to hear from you.

Project Finance Statistics

Characteristics of “Hot Projects”

Capacity: 300 KW – 3.6 MW
Average Capacity: 1,423 kW
Competitive all-in (asking) prices* currently include:

Victoria Ngare

Sol Systems’ Advisory Services Strengthen Developer RFP Applications, Increase Financing Success Rate

Solar feed-in tariffs

Through our Developer Advisory Services, Sol Systems works alongside its developer partners to strengthen applications for RFP’s and competitive bidding programs.

More than a dozen states and municipalities across the Unites States have turned to competitive bidding programs or feed-in tariff (FiT) programs to scale solar investments.  For example, Rhode Island and the LA Department of Water and Power (LADWP) are both currently offering attractive FiT programs for qualifying solar projects. Along with tax credits and tax equity financing, solar programs that offer long-term contracts can be important in financing small-scale commercial solar energy projects. Private and public entities utilize RFPs to attract the most qualified developers to fulfill renewable energy allocations, and these are increasing becoming structured as competitive bidding processes rather than simply lottery programs. Several factors can determine which developers win RFPs, including overall strength of application and competitive pricing.

Through our Developer Advisory Services, Sol Systems works alongside its developer partners to strengthen applications for competitive bidding programs. Strong applications exhibit specific characteristics such as site control with the project host, a completed feasibility study, thorough project design details, a clear plan for the financing of the system, and demonstrated experience in completing previous solar projects.  Our services identify financial and technical risks for solar projects, and our work with investors provides our team with a heightened understanding of project financeability. Most recently, Sol Systems worked with developers entering National Grid’s Rhode Island’s feed-in tariff program, which aims to add 40 MW of renewable energy capacity, 10 MW of which will be secured this year.
Read the rest of this entry »

Anna Noucas

Governor Patrick Challenges MA Solar Market with Increased Installed Capacity Goal by 2020

On May 1, 2013, Massachusetts Governor Deval Patrick announced that Massachusetts has surpassed his Administration’s original goal of installing 250 megawatts (MW) of solar energy by 2017 – four years early. The Administration used this opportunity to reveal a new goal of 1,600 MW of solar energy installations in Massachusetts by 2020.

Governor Patrick announces new goal of 1,600 MW of solar energy installations in Massachusetts by 2020.

Governor Patrick announces new goal of 1,600 MW of solar energy installations in Massachusetts by 2020.

With nearly 100 MW of solar power installed in 2012 alone, this accomplishment propelled Massachusetts to rank sixth last year in total capacity added, representing a jump up from their 12th place ranking in years 2010 and 2011, according to SEIA’s US Solar Market Insight Report. To help provide perspective on what this accomplishment means in Massachusetts, the 250 MW of solar power already installed is enough to power more than 37,000 homes for a year and is the equivalent of eliminating greenhouse gas emissions from nearly 26,000 cars a year. The new goal would generate enough power for an additional 200,000 homes for a year, and eliminate emissions from nearly 140,000 more cars.

With his statement, Governor Patrick confirms the commitment of Massachusetts to an effective and innovative solar market. This announcement comes in the midst of ongoing discussions revolving the 400 MW cap on the current solar carve-out program and the question of whether to expand the program or create a separate and distinct SREC-II program. As Governor Patrick noted in his speech, the proper solution will need to “ensure certainty for the financing world, affordability for customers, and stability for the market.”

Sol Systems will continue to track the developments of the post-400 MW policy discussions through our blog. Please contact info@solsystemscompany.com with any questions about the Massachusetts SREC market.

About Sol Systems

Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

For more information, please visit www.solsystemscompany.com.

Daniel Watson

Renewable Portfolio Standards Face Stiff Opposition Across the Country

Renewable Portfolio Standards across the nation are under re-examination by state lawmakers, aiming to diminish or eliminate these Blog-Image-2-Feb-10-2012programs. Despite benefits to local economies and environments, some politicians and lobbyists feel the programs are unimportant. To date, a number of proposals have reached State Senate and House floors throughout the country. Many lawmakers hold that RPS programs across the board create unduly costs for electricity consumers and taxpayers in order to support an industry that should be able to stand on its own. However, organizations funded by oil and gas interests like the American Legislative Exchange Council (ALEC), the Heartland Institute, and others have also played a strong role in fostering anti-renewables legislation across the country. Our company has been tracking the movement in many states and provides an overview of legislative progress thus far.

Read the rest of this entry »

Anna Noucas

Delaware Procurement Program Results in Low SREC Prices for Successful Bidders

On May 1, 2013, the Delaware Procurement Program announced the final results for their 2013 program. The results show a significant decrease in the contracted price per SREC as compared to the 2012 Pilot Program’s pricing.

This year, the Delaware Public Service Commission approved a new structure for the program which resulted in a competitive bid process for all tiers. This differs from the structure of the 2012 Pilot Program, which included an administratively set price for projects under 250 kW and a competitive bid process for projects above that size. The set price was an attractive, guaranteed price of $260/SREC or $240/SREC for the first 10 years of the contract.

Read the rest of this entry »

Dan Yonkin

2013 Solar Industry Trends, Part 2: A Look at Geographical Markets

Dan Yonkin and Yuri Horwitz had the second part of their article “2013 Solar Industry Trends” published in the April issue of the Novogradac Journal of Tax Credits

2013_04

2013 Solar Industry Trends, Part 2: A Look at Geographical Markets  

Trends in the geography of solar development are determined by three primary drivers: solar insolation (the quantity of sunlight during the year), local electricity rates (the higher the rate the better) and local regulatory and incentive programs. Good projects are found where bountiful solar resources, costly electricity rates, and generous incentive programs overlap. Nevertheless, even if the first two factors are lacking, strong state and local incentive programs and regulations can singlehandedly determine favorable solar markets for financeable projects. In 2013, a number of new state and local programs, including programs in New York, Indiana, Georgia, Connecticut and Washington D.C., in combination with established markets, like California and Massachusetts, will drive solar development trends nationwide.

Read the rest of this entry »

Daniel Watson

Sol Systems Co-founders to Travel to New York as Solar Shines on Wall Street

The Sunshine Backed Bonds Conference will be held May 3rd, 2013

The Sunshine Backed Bonds Conference will be held May 3rd, 2013

On May 3rd, the Information Management Network will be hosting its first annual Sunshine Backed Bonds conference in New York. The event, aimed at introducing investors to solar as a viable asset class, will be located at the Union League Club in lower Manhattan. Sol Systems’ co-founders, George Ashton and Yuri Horwitz, will both be in attendance. George will be participating in a panel discussion entitled “Exploring the Role of Securitization in Renewable Energy Finance.” The conference will largely focus on large-scale financing opportunities available through securities, allowing typical developers to network with ABS investors seeking alternative financing ventures.
Read the rest of this entry »

Sara Rafalson

Sol Systems & Dow Solar Announce Strategic Alliance to Offer Financing Solutions to DOW POWERHOUSE™ Customers

Sol Systems and Dow Solar, a business unit within The Dow Chemical Company, today announced a strategic alliance to provide turnkey solar renewable energy credit (SREC) solutions for DOW POWERHOUSE™ Solar Shingles customers. Dow Solar’s customers can now monetize their SRECs through a streamlined process designed by Sol Systems to improve the financial return on their solar investment.

Sol Systems and Dow Solar have partnered to offer financing solutions to Dow POWERHOUSE customers.

Sol Systems will provide Dow Solar customers with SREC financing solutions in Washington D.C., Maryland, and Massachusetts.

“We are pleased to offer this additional service for our POWERHOUSE customers,” said Yochai Gafni, Dow Solar’s Market Development Director. “POWERHOUSE is a smart home investment, but managing all of the available incentives can be cumbersome for homeowners. The alliance with Sol Systems will enable our POWERHOUSE Authorized Dealers to act as a one-stop shop for solar roofing and SREC management, which will differentiate them in their markets.”
Read the rest of this entry »

Daniel Watson

Vermont’s 2013 SPEED Program Proposal Deadline Quickly Approaches

The first round of the Vermont Sustainably Priced Energy Enterprise Development (SPEED) program in its new competitive form will close on May 1st of this year. In March, the Vermont Public Service Board altered the structure of the standard offer program in Vermont, reducing the avoided-cost ceiling rate for solar projects and changing the mechanism used to determine which projects receive the offers. The ceiling rate for solar PV systems dropped to $0.257/kWh down from $0.271/kWh. This new rate is based upon a renewed analysis of the costs of solar production. Some fear that this price is based too extensively on the expected decrease in solar costs, as efficiency in the industry grows; however, this rate remains strong in comparison to other states. All avoided-costs for other energy sources have not been altered.

Read the rest of this entry »

Daniel Watson

Sol Systems to Speak at Novogradac’s Financing Renewable Energy Conference in San Francisco

SanFran

The Financing Renewable Energy Conference will be held in San Francisco, California.

Sol Systems CEO Yuri Horwitz and Dan Yonkin, Director of Tax Equity, will be attending the upcoming Novogradac Financing Renewable Energy Conference in San Francisco. The event will be held April 24-25th and will include dozens of expert speakers and hundreds of renewable finance professionals. Yuri, our CEO and co-founder, will be featured on Wednesday the 24th in a panel titled “Searching for the Lowest Cost of Capital,” sharing his expertise on securing investment in the growing and complex green energy industry. Yuri will join executives from Deutsche Bank, Clean Power Finance, and other financing institutions to discuss the potential and viability of debt financing through asset-backed securities, master limited partnerships and even a federal production tax credit for solar energy.

Sol Systems offers investors a diverse range of opportunities to deploy capital in the renewable energy asset class. Our team originates project opportunities from our national network, conducts thorough due diligence of each projects, structures and negotiates complex tax transactions, and manages the asset post-closing to maximize each project’s cash and tax benefits.

Read the rest of this entry »

Anna Noucas

Ohio Senator Reintroduces Legislation to Repeal Renewable Portfolio Standard

The Ohio SREC market in 2013 is projected to be two times oversupplied with an expected 120,000 SRECs to be issued in 2013 compared to a demand of only 60,000 SRECs.

The Ohio SREC market in 2013 is projected to be two times oversupplied with an expected 120,000 SRECs to be issued in 2013 compared to a demand of only 60,000 SRECs.

In 2012, Ohio Senator Kris Jordan introduced a bill to repeal Ohio’s Renewable Energy Portfolio Standard. After the bill failed to advance in the 2012 session, Senator Jordan introduced a similar bill, Senate Bill (SB) 34, in February 2013. The bill has been referred to the Public Utilities Committee, but a hearing has yet to be scheduled.

If passed, SB 34 would amend several sections of the state’s Renewable Energy Portfolio Standard (RPS). Most importantly, SB 34 would repeal the requirement that utilities must reach a goal of 25% of electricity sales from renewable and advanced energy resources by 2025. In effect, this would remove the 0.5% solar carve-out and terminate the necessity for a solar renewable energy credit (SREC) market in Ohio, as well as seriously affect adjacent states that sell their SRECs into Ohio’s borders.

Read the rest of this entry »

Daniel Watson

Sol Systems Speaks at the American Solar Energy Society Conference in Baltimore

ASESheader

Sol Systems CFO and co-founder, George Ashton, will be attending SOLAR 2013, an annual conference held by the American Solar Energy Society. This is the 42nd installment of the event, and will be held April 16-20 at the Baltimore Convention Center. George will be participating in a 90-minute panel discussion titled “Financing DG Projects,” where he will speak alongside Rich Deutschmann of Ameresco, Chris Lord of Capiron, and Steve Remen of GroSolar.  The panel will be held on Wednesday, April 17th, from 1 PM until 2:30 PM and will focus on funding distributed generation installations.

Read the rest of this entry »

Natacha Kiler

April Solar Project Finance Statistics

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 April 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 info@solmarket.com.  We would love to hear from you.

Project Finance Statistics

Characteristics of “Hot Projects”

Capacity: 300 KW – 3.6 MW
Average Capacity: 1,293 KW
Competitive all-in costs range currently range between $2.00-3.00 *

  • <500 kW:            $2.57-3.00/ Watt
  • 500 kW – 2 MW: $2.85-3.00/ Watt
  •  >2 MW:               $2.00-2.62/ Watt

*Does not include Hawaii projects where competitive costs are currently ~ $4.25/watt

Read the rest of this entry »

Anna Noucas

Legislation Introduced in 2013 to Increase the Pennsylvania Solar Carve-Out

On February 25, 2013, Representative Greg Vitali introduced House Bill (HB) 100 to the Pennsylvania House of Representatives, legislation that would amend the Pennsylvania Alternative Energy Portfolio Standards. HB 100 was later referred to the House Environmental Resources and Energy Committee, and hearing has not yet been scheduled. If passed, HB 100 would take steps to revive the suffering PA SREC market. Similar legislation (HB 1580 and SB 1350) was introduced to the PA legislature in 2012; however, neither of these bills made significant progress in the General Assembly.

The original Pennsylvania Alternative Energy Portfolio Standards Act currently requires Pennsylvania’s electric utilities to obtain eight percent of their power from renewable sources by 2021, and of that eight percent, 0.5 percent of their power must be generated by solar energy systems.

Read the rest of this entry »

Sara Rafalson

Sol Systems to Host Webinar: “Quarterly SREC Roundup: Financing Projects with SRECs”

As SREC prices continue to rise in Washington, DC, how can developers and investors gain access to this promising market? How will the DOER’s potential rule changes affect the Massachusetts SREC market? Will Delaware’s Procurement Program provide relief to their weakened SREC market?

Join our SREC portfolio management team, George Ashton and Amber Rivera, on Wednesday, April 3 at 12:30 PM ET as they discuss the latest market trends in the various SREC states, as well as strategies for financing projects with SRECs. This quarter’s update will include important regulatory changes and price fluctuations in the various SREC markets, including DC, Delaware, and Massachusetts.

Space is limited, so register today.

Read the rest of this entry »

Daniel Watson

Potential Changes to Hawaii’s 35% State Tax Credit

New temporary rules will place restrictions on the ability of developers in Hawaii to claim the 35% state tax credit. The new rules, issued by the Department of Taxation in November of 2012, will be in effect for no longer than 18 months, starting for systems installed on January 1st, 2013 and after. The Hawaiian House of Representatives also recently moved HB 497 to the Senate, a proposal to permanently decrease the tax credit level given to renewable energy developers.

The new structure, under the temporary rules, places a minimum on kilowatt output of PV systems, referred to in the legislation as “other solar systems” or those projects neither for solar thermal nor from wind energy. Single-family residential properties have a minimum of 5 KW per system, multi-family residential properties have a minimum of .360 KW per unit per system, and commercial properties’ systems must have a capacity of 1MW in order to receive the current 35% of costs income tax credit. There is also a cap of $5,000 of credit for residences and $500,000 for commercial enterprises.

Read the rest of this entry »

Amber Rivera

Future of Massachusetts Solar – After the 400 MW Program Cap

Sol Systems met with solar developers, investors, and policymakers to discuss potential changes to the Massachusetts SREC market.

Sol Systems met with solar developers, investors, and policymakers to discuss potential changes to the Massachusetts SREC market.

Investors, developers, SREC aggregators, and other stakeholders in the Massachusetts solar market gathered at the State House today for meetings relating to the state’s RPS Solar Carve-Out Program. The Department of Energy Resources (DOER) sought public comment for two pivotal changes to the solar policy regime currently underway—the establishment of a post-400 MW solar program, and the ongoing rulemaking to address changes to regulation 225 CMR 14.00.

Policymakers noted the success of the Solar Carve-Out program in “aggressively growing solar installation and businesses in Massachusetts”, pointing to the rapid pace at which the state has neared Governor Deval Patrick’s goal of 250 megawatts of solar capacity by 2017. The latest DOER data from this month shows nearly 215 megawatts of solar capacity qualifying for the Solar Carve-Out Program, 195 megawatts of which is already operational. With this pace of growth, everyone is asking, “What will happen to incentives for solar development once current capacity meets the 400 megawatt cap of the Solar Carve-Out Program?”

Read the rest of this entry »

Dan Yonkin

2013 Solar Industry Trends: A Playbook for Tax Credit Investors

Sol Systems’ CEO, Yuri Horwitz, and Dan Yonkin, Director of  Tax Equity, were published in the March 2013 issue of the Novogradac Journal of Tax Credits.

Sol Systems CEO Yuri Horwitz and Director of Tax Equity, Dan Yonkin, were recently published in the Novogradac Journal of Tax Credits.

Sol Systems CEO Yuri Horwitz and Director of Tax Equity, Dan Yonkin, were recently published in the Novogradac Journal of Tax Credits.

 

2013 Solar Industry Trends: A Playbook for Tax Credit Investors

By Dan Yonkin and Yuri Horwitz, Sol Systems

The solar industry continues to promise potential tax-driven investors a growing and stable asset class in which to deploy their capital. However, for new entrants – or even experienced players – continued success in 2013 and beyond requires an intimate understanding of the solar industry and market’s changing topography.

Read the rest of this entry »

Natacha Kiler

March Solar Project Finance Statistics

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 March 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 seeking financing, please contact our team at info@solmarket.com.  We would love to hear from you.

Read the rest of this entry »

Anna Noucas

Massachusetts DOER Announces Solar Policy Stakeholder Meetings

On February 22, the DOER announced their intent to actively develop policy to maintain the growth of the solar PV market in Massachusetts, beyond the 400 MW cap of the current RPS Solar Carve-Out.  The DOER released a statement Wednesday, March 13  providing further notice to all stakeholders of two public meetings that will take place this Friday, March 22.

At a morning stakeholder meeting, the DOER will unveil the policy objectives and potential changes under consideration for a post-400 MW solar policy in Massachusetts. The meeting will give market participants a chance to provide comments ahead of any final decision on this key policy. A legislative public hearing will follow in the afternoon, to separately address the on-going rulemaking of the 225 CMR 14.00 regulation of the current Solar Carve-Out Program.

Read the rest of this entry »

Daniel Watson

Sol Systems at Infocast Solar Power Finance and Investment Summit 2013

Infocast logo

CEO Yuri Horwitz and CFO George Ashton will be attending the Solar Power Finance and Investment Summit in San Diego, California on March 18-21th. The event will be held in the Rancho Bernado Inn, and will consist of four days of networking and expertise sharing. Yuri will be conducting a tutorial on Monday entitled “Project Economic Viability” detailing the features of project development that generate investment interest from financiers. On the 21st, George will be speaking in a panel discussion on alternative financing models, discussing topics that range from standardization of solar as an asset class to crowd funding. Read the rest of this entry »

Sara Rafalson

Sol Systems Brings New Tax Equity to Solar, Finances 5 MW

Sol Systems successfully placed $15 million in tax equity into two 2.5 MW North Carolina projects on behalf of a Fortune 100 company.  The financing arrangement marks the Fortune 100 company’s first investment in solar and provides the solar industry with a new source of tax equity.

The US solar industry is supported by a 30% investment tax credit that generally requires outside investors with profitable businesses to invest in projects, typically known as tax equity.  Tax equity is currently the most critical limiting factor in solar project development, and has the potential to limit the growth of the industry in the coming years.

Read the rest of this entry »

Daniel Watson

Conference: Emerging Trends in Financing Tax Credit Projects

Sol System’s Director of Tax Equity Dan Yonkin will be attending the Emerging Trends in Financing Tax Credit Project in Las Vegas, Nevada, March 13-15 at the Four Seasons Hotel. The event is hosted by the Institute for Executive and Professional Development (IPED), Inc. and will be attended by top investors and developers looking to enhance their investment and financing opportunities through new and innovative tax credit maneuvers. The conference will have an emphasis on bringing together experienced professionals to highlight the most viable methods of combining multiple tax credits in single portfolios. Read the rest of this entry »

Sara Rafalson

Sol Systems’ Q4 2012 SREC Prices Available Online

At the end of each quarter, Sol Systems takes the weighted average sales of the SRECs from our 3,500+ customers to calculate our final clear prices. These SREC clear prices are then posted to Sol Brokerage page of our website.  Sol Systems publishes our quarterly SREC clear prices in order to help provide transparency to the SREC marketplace for both our Sol Brokerage customers and developers in the solar industry.

As the oldest and largest SREC aggregator in the country, Sol Systems’ portfolio management team leverages our SREC expertise to transact in the SREC market on a daily basis when we see strong opportunities for selling our customers’ SRECs at the highest market values.

Read the rest of this entry »

Victoria Ngare

Oregon’s Volumetric Incentive Rate and Payment Program (VIR) Announces Next Capacity Release

On April 1st, 2013, Oregon will issue its seventh capacity release for its solar volumetric incentive rate (VIR) payment program, established in June of 2009. The last capacity release featured prices between $0.25/ kWh to $0.41/ kWh for residential and commercial systems, depending on geographic location and size.

Oregon’s VIR is different from other Feed-in-Tariffs (FITs) in that customers can consume the electricity they generate on-site and receive a production based incentive (PBI) for what they generate and consume. The Oregon Public Utility Comission (PUC), in accordance with annual system costs and annual energy output based on geographic regions, determines rates. Customers are paid for each kilowatt-hour (kWh) generated over 15 years.

Read the rest of this entry »

Jessica Robbins

Sol Systems is Hiring! Senior Software Engineer

Description:

Sol Systems is seeking a full-time, software engineer to help lead development of our internal business applications.  The ideal candidate would be comfortable working at all levels of the development stack, from server configuration to user interface development.  This role will require significant interaction with non-technical business users; therefore, the ideal candidate would be comfortable working with non-technical business users to gather and refine requirements and ensure user acceptance.

Read the rest of this entry »

Jessica Robbins

Sol Systems is Hiring! Director of Project Finance

Position:  Director: Project Finance

Requirements: Sol Systems is seeking a full-time director of project finance to help lead our efforts to source attractive solar projects from our expanding network of developer partners across the US and its territories. The role will require a combination of project finance expertise, solar development experience, written and verbal communication skills, project management capabilities, business development efforts, negotiation skills, and team leadership.  A successful candidate will possess the following skills and attributes:

  1. Experience and expertise in solar project finance, or renewable energy project finance
  2. A working knowledge of the inverted lease, sale lease-back, and partnership-flip structures
  3. Solar project development experience and expertise
  4. A network of developer connections from prior work experience – preference for West Coast experience
  5. Sales experience and expertise
  6. Team leadership experience and expertise
  7. Deadline oriented
  8. Self-Starter, hands-on with attention to detail
  9. Strong communication and interpersonal skills
  10. Ability to learn quickly while maintaining a keen eye for details and staying organized.
  11. Highly proficient with Excel
  12. Knowledgeable in Access – preferred
  13. Write professionally

    Read the rest of this entry »

Jessica Robbins

Treasury Issues Statement Clarifying the Impact of Sequestration on Section 1603

Previously, Sol Systems has published on the potential impacts of sequestration on the solar industry. As of March 1st, those impacts have unfortunately become reality. On Monday the 4th, the Treasury released a “Message on Sequestration” clarifying its impact on Section 1603 of the American Recovery and Reinvestment Tax Act of 2009, more commonly known as the cash grant for the 30% investment tax credit (ITC). Due to sequestration, 1603 awards will be reduced by 8.7%, a larger cut than the 7.6% we expected to see as of October. The final grant amount for affected projects is now 27.39%, not the full 30% of the ITC.

Read the rest of this entry »

Sara Rafalson

Viewpoint: Solar Energy Finance 2013 — Beyond Traditional Tax Equity

By Chris Cather, bluecrab solar (posted for RenewableEnergyWorld.com)

What will solar energy finance in the U.S. look like in 2013?

While the global market forecast for solar is shaping up nicely, the US market is faced with a series of fiscal cliffs, declining natural gas prices, and a post-1603 world with diminishing tax appetite.

Not good news for financing commercial solar projects.

But Yuri Horwitz, founder and CEO of Sol Systems, for one, is optimistic. Yuri is frequently on the speaking circuit at renewable energy finance conferences evangelizing new sources of solar finance in the post-1603 landscape or raising project finance, educating corporate investors on tax investment structures.

Read the rest of this entry »

Webinar – Emerging Market Spotlight: New York

Over the last year, New York has emerged as a commercial solar hot spot. Several state and local incentive programs have been adopted or expanded, including the NY-Sun Competitive PV Program (NYSERDA PON 2589) and the Long Island Power Authority’s (LIPA) feed-in tariff. As these incentive programs evolve, what must solar developers and investors do to gain access to this promising market?

Join Sol Systems, NYSEIA, and ACE NY for a webinar discussion on the NY solar market.

Join Sol Systems, NYSEIA, and ACE NY for a webinar discussion on the NY solar market.

Join Sol Systems CEO, Yuri Horwitz, on Wednesday, March 6 at 1:30 PM ET, as he moderates a discussion on the future of the New York solar market, including which types of projects are most likely to be financed and built. The panel of experts includes:

This presentation will be especially helpful for project developers and investors seeking to better understand market dynamics and incentive structures in New York. Developers and investors that wish to learn more about developing solar in New York should contact the Sol Systems team at info@solmarket.com for assistance.

Space is limited, so register today.

About Sol Systems

Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

For more information, please visit www.solsystemscompany.com.

William Graves

Investor Preferences, and the Building of Financeable Projects

Bringing a solar project from conception to completion is a difficult task, and many solar projects are never built.  With the expiration of the 1603 Grant Program, developers must rely more heavily on third party financing in order to fund successful project development. In light of this, it is very important that developers are cognizant of investor preferences, and build projects to meet their standards.  Investors value well planned projects, which rely on bankable documents, take advantage of state incentives, are priced competitively, and have appealing economic and risk profiles.

Over the course of the past year, the Sol Systems team has diligenced hundreds of solar projects around the country. We have successfully closed a number of complicated deals, including two projects in North Carolina that leveraged both state tax credits and the federal investment tax credit (ITC), and a 5 MW project in Ohio that utilized new market tax credits (NMTC). We have also financed a number of small, distributed generation projects under 1 MW, which are typically too small for most investor profiles.  With this exposure to a wide variety of projects, which vary greatly in terms of development stage, risk profile, and financing needs, we are able to quickly discern a project’s strengths and weaknesses.

By working closely with our investment partners we have learned what most attracts them to a project. We know what they look for in terms of geographic preference, return hurdle, project size, and overall economic profile, and we are able to advise developers on how to tailor projects to the parameters set forth by investors, and bring these projects to financial close. Outlined below is a list of items to consider to attract investor interest when developing a project.

Projects Based on Bankable Documents

Investors want projects that utilize bankable legal documents, which can save a lot of time, headache, and money when trying to close a project.  Closing delays are often attributed to the review and negotiation of legal documents and may lead to much higher legal fees.  For convenience, Sol Systems offers form legal agreements written by our partner law firm, Cooley LLP, including a template PPA Agreement, EPC Agreement, Mutual NDA, Lease Agreement, and Letter Of Intent.  All of the documents are provided free of charge to our clients and are specifically designed for the construction of solar assets.

Projects Located in Target Markets

By working closely with our investment partners we have learned what most attracts them to a project. We know what they look for in terms of geographic preference, return hurdle, project size, and overall economic profile.

Market selection is another critical consideration and should be carefully researched.  Investors are often looking for projects that take advantage of state incentives, high electricity rates, or some combination of both.  Typically, emerging or recently emerged markets are more lucrative for developers than those markets that are already saturated.  Some key characteristics of target markets are listed below:

  • Markets with High Solar Insolation – States with high solar insolation can boost a project’s return simply because the output of a system per installed kW is higher. These markets include California and Arizona among others.
  • Markets with Feed in Tariffs (FiT) – Rhode Island and Vermont both offer attractive FiT programs.  Projects located in either of these states with feed in tariff contracts receive particularly strong interest from investors due to their strong economics and reduced risk profiles. Additional FiT regimes receiving interest include GRU, LIPA, and LADWP.
  • SREC States – D.C. and Massachusetts both benefit from the best SREC markets in the nation.  Although there is a bit of uncertainty surrounding the price of SRECs in Massachusetts and the strength of the Clearinghouse price floor, projects can still pencil in this state.  Washington D.C. maintains an undersupplied SREC market, leading to high prices (currently ~$330).  However, land and large rooftops are proving hard to find – making sizeable projects difficult to construct.
  • State Level Incentives – Connecticut and New York both maintain lucrative state level incentives.  Connecticut’s ZREC program is also drawing strong interest from our investment partners, and Sol Systems is currently working to aggregate a portfolio of small ZREC projects together for investment.  New York benefits from lucrative NYSERDA grant awards.  NYSERDA grants are particularly attractive because they typically pay out over the first 3 years, giving projects a nice IRR boost.

Low Risk Profile

When assessing a project’s risk profile, investors typically look at a multitude of different factors, but some of the most important include the creditworthiness of the energy offtaker and host, the bankability of the modules and inverters, and the strength of the PPA. As mentioned above, the PPA should be a bankable legal contract and should reflect industry standard terms. With regard to the offtaker, investors typically look for a credit rating of BBB- (by Standard and Poor’s) or higher. If the offtaker is not a rated entity, the investor will need to review at least 3 years of financials to determine the strength of the offtaker. If the offtaker and the host are separate entities, the credit requirements are typically less stringent, but still important, as the host is the counterparty on the lease agreement.

Module and inverter bankability is another important aspect of the risk profile. Modules should be “Tier 1” – it’s best not to skimp on product quality and warranty strength to save a few cents per watt. Investors like to see projects using bankable modules and components.

Competitively Priced

Projects with well managed cost structures and competitive pricing are typically very attractive to investors. A project’s overall cost structure is comprised of EPC cost, developer fee, site control cost, O&M and insurance expenses, and applicable taxes. We have seen a continual fall in EPC cost, and are now seeing a range from around $2.10 to $2.80 per watt. These numbers are, of course, dependent on the size of the project and location. Developer fees typically range from 10%-15% of total project cost, but this number varies with project quality and stage of development.

Developers should manage site control costs and tax expenses to the best of their ability as well. We recommend that site control costs not exceed 10% of gross annual revenue. With regard to insurance and O&M expenses, Sol Systems typically factors in around $25/kW per year, which is more or less the current rate at this time.

Attractive Economic Profile

The overall economic profile of a project is comprised of essentially 3 components: a project’s revenue stream (including incentives), CAPEX, and OPEX.  Taking these factors into account, investors typically look for an IRR between 9% and 11%.  We are currently working with investors with IRR hurdles as low as 8% and as high as 20%. Keep in mind that these investors are looking for projects with very diverse economic and risk profiles, and in different stages of development.  A project should balance costs and revenue streams so that it can stay as competitive as possible.  

Conclusion

When building a project, be sure to utilize bankable documents, make the project competitive, both in terms of revenue and costs, and stay mindful of the project’s overall economic and risk profile. These are the projects that garner the most investor attention and are ultimately financed and built.

For additional information on this topic, please listen to our webinar titled “Investor Preferences: Key Solar Project Traits that Lead to Successful Financing” presented by Sol Systems’ CEO, Yuri Horwitz, and SunEdison founder, Jigar Shah, on our SolMarket website.

If you have a project and are seeking financing or would like more information on our company, please contact our team at info@solmarket.com or (888) 235-1538 x2.  Our team would be happy to discuss your project with you and assess financing opportunities.

About Sol Systems

Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

For more information about Sol Systems, please visit www.solmarket.com.

Sara Rafalson

February Solar Project Finance Statistics

Every month, Sol Systems distributes a newsletter, the SolMarket 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 February 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 seeking financing, please contact our team at info@solmarket.com.  We would love to hear from you.

Project Finance Statistics

Characteristics of “Hot Projects”

Capacity: 149 kW – 4.25 MW

Average capacity: 1,600 kW

Competitive EPC costs currently range between $2.15-$2.80/Watt

*Competitive prices depend on scale, location, and individual project economics

  • <500 kW: $2.40-$2.80/ W
  • 500 kW – 2 MW: $2.25-$2.65/ W
  • >2 MW: $2.15-$2.45/ W

PPA rates:

  • DE:  9.9 cents/ kWh (20 year term; 2% escalator)
  • MA: 8.6 cents/ kWh (20 year term; 1.5% escalator)
  • NY: 9 cents/ kWh (15 year term; no escalator)

Feed-In Tariff rates:

  • CA: 17 cents/ kWh (20 year term; no escalator)
  • FL: 29 cents/ kWh (20 year term; no escalator)
  • NY: 22 cents/ kWh (20-year term; no escalator)
  • RI: 32.2 cents/ kWh (15 year term; no escalator)

Recently Funded Projects

Cumulative capacity: 11.8 MW

Cumulative value: $38.7 million

Locations:   IN, NC, OH

Trends and Observations

Lean and Mean: Solar Project Margins Are Thin & Programs Are Competitive

It is no surprise that the economics of solar deals are changing, and in many cases, becoming more challenging.  Even after solar project developers have secured state incentives, project margins are thinning, and it is increasingly difficult for developers to ensure that project economics pencil for investor partners.  Solar developers effectively have two clients: (1) their host entity or lessee and (2) their investor.  The changing dynamics in the solar market mean that it is more important than ever for developers to focus on their financing partners needs and requirements.  This means that developers must:

  • Negotiate high PPA rates
  • Minimize site lease costs
  • Procure and utilitze financeable power purchase agreements and leases
  • Build flexibility into their offtake agreements so that they can make changes for investor partners when necessary
  • Procure the most recent and most competitive EPC quotes
  • Reduce property taxes and other cost centers that reduce project returns

The presence of state and regional incentives continues to play a pivotal role in determining which projects get financed. Subsequently, local incentive programs are typically competitive and oversubscribed. While it should go without saying, it is not enough to bid low and queue up for local incentives. Developers must ensure that they are bidding into programs in ways that allow them to build and finance the projects.  In other words, developers need to model project costs accurately so that the incentives align with other project costs and income streams, as well as provide sufficient cash flows for equity investors.  Ultimately, they have to balance these strategies with their own financial hurdles and embedded costs.

Given our experience with multiple investor clients, we suggest that sufficient cash flows typically mean a 20 year IRR of 11-12 percent or higher for smaller projects, and 9-10% or higher for 2 MW+ projects.  The smaller and more complex the transaction, the higher the required return.  Additionally,  developers’ models are likely to differ from that of your investor, which is why developers should accurately consider the same upfront costs and ongoing expenses that an investor incorporates into their model. Our team is intimately familiar with our investor clients’ models, and we recommend communicating with us as you consider project economics.

Manufacturers Getting Creative to Find Channels for Panels

With a glut of solar modules in the market and fewer developers warehousing panels, we have seen virtually all major panel suppliers become more creative in their efforts to procure sales channels.  In addition to partnering with and acquiring downstream solar players, we have seen module manufacturers attempt to secure direct relationships with hosts before a developer is involved, or provide developers with construction financing in exchange for a commitment to use their panels.

Manufacturers’ credit and reputation will certainly play a role in whether or not projects ultimately obtain take-out financing, but only time will tell which manufacturers’ efforts are the most successful.

The Sol Systems team welcomes and encourages all creative ideas that lead to successful project development, and we are in discussions with a number of manufacturers to facilitate project finance opportunities.

Sol Systems Call for Projects 50 kW – 2 MW

We are actively seeking solar projects 50 kW -2 MW in size.  Our investors are looking to close deals by the end of March 2013. Please contact Sol Systems as soon as possible if you have projects that meet the following criteria:

  • Rooftop, ground-mount, or carport
  • Located in California, Connecticut, D.C., Hawaii, Maryland, Massachusetts, New Mexico, New York, or Rhode Island
  • To be placed in service prior to September 1, 2013
  • Rated SREC contracts for D.C., Maryland, and Massachusetts preferred, but not required; Sol Systems’ investors will take on SREC risk

Of course, we are always interested to hear about solid projects, even if the project does not meet all of our above criteria. Please contact our team to discuss financing options for any of the projects in your pipeline.

Priority consideration will be given to developers with a proven track record of success and who have demonstrated progress on site control, interconnection, and permitting.  Learn more.

SREC Roundup

This month, Sol Systems increased pricing for Sol Annuity fixed price SREC contracts for systems certified within Washington, DC. The pricing increase was largely attributed to the aggressive change in the RPS requirement, which was amended in the summer of 2011 with the help of Sol Systems’ efforts. If you are interested in our Sol Brokerage clear prices and price movements on the spot market, please view our SREC clear prices, which are updated quarterly.
Sol Systems also offers its network the opportunity to view historic SREC marks and model future pricing using their own market assumptions.  To utilize our SREC supply and demand model, please view our SREC Analytics tool.

About Sol Systems

Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

For more information, please visit www.solsystemscompany.com.

Delaware Procurement Program Could Lead to Better SREC Prices

The Delaware Public Service Commission (DE PSC) approved the Delaware Procurement Program’s 2013 solicitation on January 22, 2013.  The 2013 Program for Procurement of Solar Renewable Energy Credits was developed by the Renewable Energy Taskforce on behalf of Delmarva Power & Light Company.  Following the DE PSC’s approval, it was announced that applications will be accepted between March 25 and April 12, 2013, and winners will then be announced on April 19, 2013.

The program structure is slightly different from the 2012 Pilot Program, and will include separate tiers for new and existing systems, and a competitive bidding process for all tiers.

2013 Program Tiers

The 2013 Program will include 5 total tiers, as well as a spot market purchases tier for a limited number of SRECs.  Three tiers will be designated for new systems and two tiers will be designated for existing systems.  Each tier will then be categorized by nameplate capacity.

The 2013 program will procure a total of 7,000 SRECs, which equates to around 5.83 MW of projects, between the two tiers combined, in addition to 1,000 SRECs being procured as spot market purchases.  The SEU, however, may, subject to certain limitations, accept bids from a lower tier to fill the requirements of a higher tier.

Competitive Bidding in All Tiers in the 2013 Program

Unlike the 2012 Pilot Program, smaller systems will not receive an administratively set price. Instead, all tiers will bid competitively to provide price protection to the ratepayers.  The standard agreement for all systems will be 20 years, much like the 2012 Pilot Program.  The first 7 years of the contract will be at the competitively bid and accepted SREC prices.  The remaining 13 years will be fixed at $50 per SREC.

Sol Systems will continue to track the progress of the 2013 Program for Procurement of Solar Renewable Energy Credits and will inform our installer partners and customers shortly with further information on how Sol Systems can act as your Owner Representative.

If you have a commercial project that is being bid into the DE Procurement Program, and is looking for financing, please contact our team at info@solmarket.com or (888) 235-1538 ext. 2.  Our team would be happy to discuss your project with you and assess financing opportunities should you be awarded an SREC contract through the DE Procurement Program.

About Sol Systems

Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions.  Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits.  To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

Sara Rafalson

Sol Systems Launches Mid-Market Financing Solution: Call for Solar Projects 50 kW–2 MW

Sol Systems launches Mid-Market Solution to address financing challenges facing small commercial solar projects.  We are actively seeking solar projects 50 kW-2 MW in size for immediate acquisition.  This is a fast moving opportunity – our investors are looking to close deals by the end of March 2013.

Solar developers with projects should contact Sol Systems as soon as possible, as funding is limited and projects will be assessed on a first-come basis.  Criteria for consideration:

  • 50 kW – 2 MW in size
  • Rooftop, ground-mount, or carport
  • Located in California, Connecticut, D.C., Hawaii, Maryland, Massachusetts, New Mexico, New York, or Rhode Island
  • Placed in service prior to September 1, 2013
  • Rated SREC contracts for D.C., Maryland, and Massachusetts preferred, but not required; Sol Systems’ investors will take on SREC risk

Developers with a proven track record of success that can show demonstrated progress on site control, interconnection, and permitting will be given priority consideration.

“The lack of investment capital for small-scale solar projects is a significant barrier to industry growth,” said Yuri Horwitz, CEO of Sol Systems.  “Utility-scale project build-out is slowing, and commercial and industrial projects compose around a third of the market.  However, few investors have actually developed the resources or expertise necessary to help catalyze this mid-market space.  The industry cannot continue to expand without real solutions, which is why our mid-market initiative is so critical.”

Sol Systems invites developers with solar projects that meet the above criteria to contact our solar project finance team at info@solmarket.com.  A member of our team will provide more details on this opportunity and walk through next steps.

About Sol Systems

Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

For more information about Sol Systems, please visit www.solmarket.com

Anna Noucas

New York Solar Market Shows Significant Promise for 2013

On January 9, 2013, New York's Governor Andrew Cuomo announced the expansion of the NY-Sun Initiative for solar energy in his State of the State Address.

On January 9, 2013, New York's Governor Andrew Cuomo announced the expansion of the NY-Sun Initiative for solar energy in his State of the State Address.

Over the last year, the New York market has emerged as a solar hot spot.  Several state and local incentive programs have been adopted or expanded, and the state now ranks 12th in terms of solar installed capacity, according to the most recent U.S. Solar Market Insight Report.  Positive momentum continues in the state, and 2013 will be an even more promising year for solar projects in New York, as solar becomes an increasingly vital component of the state’s energy portfolio.

On January 9, 2013, New York’s Governor Andrew Cuomo announced the expansion of the NY-Sun Initiative for solar energy in his State of the State Address.  The expansion will begin with an additional $150 million annually over 10 years committed to increasing solar project development through the NY-Sun Initiative.  Governor Cuomo also discussed plans to create a $1 billion green bank and announced his appointment of Richard Kauffman as New York’s chairman for energy policy and finance.  Richard Kauffman currently serves as the Senior Advisor to the U.S. Secretary of Energy, Steven Chu.

The additional $150 million per year commitment over 10 years to the NY-Sun Initiative will have a potentially significant impact on solar project development in New York.  The NY-Sun Initiative aimed to “in 2012, install twice the customer-sited PV capacity added in 2011″ and will, with the help of the announcement from Governor Cuomo, “quadruple that amount in 2013.”  Two programs of particular note, deployed by the NY-Sun Initiative, include the Long Island Power Authority (LIPA) feed-in tariff program and the PON2589 NY-Sun Competitive PV Program through New York State Energy Research and Development Authority (NYSERDA).

Long Island Power Authority (LIPA) Feed-in Tariff Program

The LIPA feed-in tariff program, opened on July 16, 2012, allows for projects to enter into a Power Purchase Agreement (PPA) for 20 years for $0.22/kWh produced.  The program will enroll 50 MW of solar energy by 2014 and has stipulated the following categories to reach that capacity:

  • Category 1: 5 MW set aside for systems between 50 and 150 kW
  • Category 2: 10 MW set aside for systems between 151 and 500 kW
  • Category 3: 35 MW set aside for systems between 501 kW and 20 MW, or smaller if the above two categories are fully subscribed

The above listed categories will prevent smaller generators from being crowded out by larger generators, and will create adequate supply of smaller distributed generators, while also maintaining market stability for the local solar industry.  LIPA will enroll systems on a rolling basis and will accept applications through June 30, 2014.

Furthermore, in October 2012, the LIPA Board of Trustees voted on a decision that plans to allow for an extension of the current feed-in tariff program and issue a new competitive solicitation for an additional 100 MW of renewable energy capacity, no later than July 31, 2013 under the Clean Solar Initiative Feed-in Tariff.

NY-Sun Competitive PV Program – PON 2589

The NY-Sun Competitive PV Program (NYSERDA PON2589) extends the Renewable Portfolio Standard (RPS) Customer-Sited Tier Regional Program to include upstate New York.  This incentive is structured differently from a standard FIT contract.

Through this program, a winning bidder will receive a total incentive amount equal to their bid price in dollars per kilo-watt hour ($/kWh) multiplied by the project’s estimated site energy production and the 3- year incentive term.  This incentive will be distributed in two upfront payments, totaling 30% of the total incentive amount.  The remaining 70% will be distributed as a production based incentive (PBI) over the first three years of the project’s life.

The first round of bid submissions were due on December 5, 2012, but two additional solicitations have been announced for 2013 with due dates of March 14 and August 29.

Finance your New York Projects

Sol Systems is currently working on behalf of investors that are interested in both LIPA FIT projects and projects that have been awarded PON 2589 awards.  If you have a project that has been awarded a LIPA FIT contract or has been bid into the PON 2589 program, and is looking for financing, please contact our team at info@solmarket.com or (888) 23501538 ext.2.  Our team would be happy to discuss your project with you and assess financing opportunities.

About Sol Systems

Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions.  Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits.  To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

Anna Noucas

Community Solar Bill Reintroduced to the DC Council

The DC Council has reintroduced the Community Solar Bill which would allow for anyone to reap the energy benefits associated with owning a solar installation.

The DC Council has reintroduced the Community Solar Bill which would allow for anyone to reap the energy benefits associated with owning a solar installation.

In January, Councilmembers Alexander, Cheh, Bonds, Grosso, Barry and Wells co-introduced the Community Renewables Energy Act of 2013 (B20-0057).

The Community Renewables Energy Act of 2012 (B19-0715), the 2012 version of B20-0057, was originally circulated in early 2012.  A hearing followed in the middle of June 2012, where Sol Systems Chief Business Officer, Sudha Gollapudi, testified in support of the legislation.  The hearing resulted in a working group dedicated to finding an effective way to implement the community solar bill.  The working group was unable to complete its work during last year’s legislative session, and thus the bill was reintroduced in 2013.

The Community Renewables Energy Act of 2013 is almost identical to the 2012 version.  Many DC residents are unable to use solar energy because they are renters, or they own a property that is not ideal for a solar installation.  With these restrictions, a large portion of DC residents do not have the ability to participate in the solar industry.  The legislation would allow for any and all DC residents to purchase a share in a community solar system located anywhere in DC and receive credit for solar electricity from that system to offset their own utility bill in the form of virtual net metering.  This form of virtual net metering would allow for anyone to reap the energy benefits associated with owning a solar installation.

The re-introduction of this bill to the DC Council for the 2013 legislative session illustrates the Council’s commitment to expanding access to solar for all DC residents.  Furthermore, the passage of the Community Solar Act would help the District to achieve its aggressive solar carve-out requirements by installing a great capacity of solar.

Developers or investors interested in commercial scale project finance within the District should contact our project finance team at info@solmarket.com.  In addition to project financing services, Sol Systems currently offers three SREC solutions for photovoltaic and solar thermal systems located in the District: Sol Annuity, Sol Brokerage, and Sol Upfront.  Please email info@solsystemscompany.com for more information.

Sol Systems will continue to track the progress of this bill.  Please check out our blog for further updates.

About Sol Systems

Sol Systems is a boutique financial services firm that offers investor clients direct access  to the renewable energy asset class and provides developers with sophisticated project financing solutions.  Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits.  To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

Anna Noucas

DC Exempts Solar Energy Systems from Personal Property Tax

The DC Council approved and enacted legislation that would allow for solar energy systems to be exempt from the personal property tax.

The DC Council approved and enacted legislation that would allow for solar energy systems to be exempt from the personal property tax.

The District of Columbia Council once again expressed its support for the solar industry by recognizing and eliminating one of the potential barriers to building solar in the District.  On December 17, 2012, the DC Council approved and enacted legislation that would allow for solar energy systems to be exempt from the personal property tax.  The Energy Innovations and Savings Amendment Act of 2012 specifically amended Sec. 47-1508 of the District of Columbia code to include solar energy systems and cogeneration energy systems under the Personal Property Tax Exemption.

Personal property tax has been a significant barrier to solar finance and installation, as it can raise the costs of the system following installation, specifically hindering third party ownership.  This tax had created an unfair discrepancy between owners of solar systems who install facilities on their own property and third party owners who have installed a system on a host site.  Owners who install systems on their own property do not have to pay the personal property tax imposed, but rather pay a real property tax at a much lower rate.  Third party investors, who do not own both the property and the solar project on the property, are subject to the personal property tax, rather than the real property tax, at a much higher rate, close to 20-30% of revenue in the first year of operation of a system.  This discrepancy had created an unequal playing field, discouraging third party solar investments.

With the enactment of this bill, the exemption will reduce the tax burden on solar energy systems and further incentivize the construction of solar energy projects in the District.  DC now joins the extensive list of states that have taken similar action to reduce the barriers to building solar by exempting the personal property tax.

The District continues to take the necessary steps to ensure equal access to solar for all those interested and spur third party investments to help DC maintain its aggressive goals for renewable energy.  DC is already one of the solar hotspots in the country and, in relation to its size, the District currently tops the list of installed capacity (kW) per square mile.  With strong SREC market conditions and growth in installed capacity, DC remains an increasingly attractive market for solar development.

Developers or investors interested in commercial scale project finance within the District should contact our project finance team at info@solmarket.com.  In addition to  project financing services, Sol Systems currently offers three SREC solutions for photovoltaic and solar thermal systems located in the District: Sol Annuity, Sol Brokerage, and Sol Upfront.  Please email info@solsystemscompany.com for more information.

About Sol Systems

Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions.  Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits.  To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

SEIA Finance and Tax Seminar

SEIA Finance and Tax Seminar February 27 - 28 at the J.P. Morgan Conference Center in New York City

Several members from the Sol Systems team will be attending the SEIA Finance and Tax Seminar on February 27 – 28 at the J.P. Morgan Conference Center in New York City. The Seminar is dedicated exclusively to finance and tax issues facing the solar industry today. Attendees will learn from attorneys, developers, and financiers who are doing deals right now and networking sessions will allow professionals to make valuable new contacts and strengthen relationships.

Sol Systems has a track record of successful investment with investors with a large tax appetite. Our experienced team helps tax equity investors navigate the project risks particular to renewable energy and the nuances of the tax equity space. Sol Systems addresses tax issues in the renewable energy space by bringing new and non-traditional investors to the table, including independent power producers and non-energy Fortune 500 companies.

To schedule a meeting in New York with a member of the Sol Systems team, please email us at info@solmarket.com.

About Sol Systems

Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

Rhode Island Feed-in Tariff Schedule Announced for 2013

National Grid recently announced their 2013 enrollment schedule and pricing for Rhode Island’s feed-in tariff program, also known as Distributed Generation Standard Contracts. The program was created by an act of the same name in June 2011. In aggregate, it calls for a total of 40MW in new renewable energy procurement by 2014, with 10MW slated for this year. For solar, maximum prices range from $0.2995/kWh to $0.2495/kWh, fixed for 15 years, depending on system size.

Renewable energy projects including wind, solar, and anaerobic digestion are all eligible for the program, with certain distinctions based on technology and size. Small systems will be accepted at the ceiling price on a first-come, first-serve basis until capacity is filled. Larger projects will be awarded contracts based on competitive bid-in pricing submitted for each project. The Distributed Generation Standard Contract Board sets the ceiling prices and capacity targets for each enrollment period.

The 2013 ceiling prices and capacity targets for each subcategory are as follows:

Class Nameplate Target Nameplate 2013 Ceiling Price (cents/kWh)
Wind
(50 kW – 1500 kW)
(50-100 kW)
(200-999 kW)
(1,000-1,500 kW)
1500 kW
In Total
24.65
16.20
14.80
Solar-PV
(50 – 100 kW DC)
300 kW 29.95
Solar-PV
(101 – 250 kW DC)
250 kW 28.80
Solar-PV
(251 – 499 kW DC)
750 kW 28.40
Anaerobic Digestion
(400 – 500 kW)
500 kW 18.55
Solar PV/Anaerobic Digestion
(501 kW – 5000 kW)
1300 kW 24.95 / 18.55

The announced 2013 open enrollments include the two-week period from March 4th-15th, a second enrollment occurring in June, and a third in September. Each enrollment is only open for about two weeks at a time, so developers planning to participate in the program should take note of the scheduled openings.

The Sol Systems team will continue tracking this program, which based on the high feed-in tariff rate and substantial maximum project size, presents an excellent project development opportunity. If you have a project that has been submitted into the program or awarded a contract, and is in need of financing, please contact at our team at info@solmarket.com or (888) 235-1538×2.  Our team would be happy to discuss your project with you and assess financing opportunities.

About Sol Systems

Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

Sol Systems is Hiring! Part-time Accountant/Bookkeeper

Position:  Part-Time Accountant/Bookkeeper

Company: Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

Requirements: Sol Systems is seeking a part-time accountant/bookkeeper to provide direct support to the Chief Financial Officer of the Company.  The successful candidate must demonstrate attention to detail and have excellent accounting and record-keeping skills, as well as working knowledge of state and federal tax regulations.  A successful candidate will possess the following skills and attributes:

  1. BS in Accounting or Business, or 2+ years of experience as a staff accountant
  2. Deadline oriented
  3. Self-Starter, hands-on with the attention to detail
  4. Strong communication and interpersonal skills
  5. Customer Service Oriented
  6. Ability to learn quickly while maintaining a keen eye for details and staying organized.
  7. Highly proficient with Excel
  8. Proficiency in Quickbooks
  9. Experience serving as a lead accountant
  10. CPA preferred but not required

Description: The Accountant/Bookkeeper will be in charge of the overall management of accounting functions and the following tasks:

  1. Generating customer invoices and working closely with the sales team
  2. Processing vendor invoices and employee expenses
  3. Research and resolve payment variances with customers
  4. Setting up cash disbursements
  5. Preparing payroll on bi-monthly basis using ADP
  6. Preparing monthly journal entries and schedules
  7. Performing monthly balance sheet and income statement reconciliations
  8. Assisting with month end and year end close procedures for preparation of monthly and annual financial statements
  9. Assisting in annual tax filing preparations
  10. Coordinating with the employees in the office on appropriate accounting procedures
  11. Managing the company’s cash needs in conjunction with the needs of the business units
    1. Other Responsibilities as assigned

Location & Hours: Our office is one block from Dupont Circle.  This position is part-time, with a preference for 4 hours a day, 5 days a week; however, we can offer some flexibility as to schedule.  Our business hours are 9:30am to 6:30pm.

Commitment & Compensation: This is a part time position for an independent contractor.  Compensation will be $20.00-$30.00 per hour depending on experience.

To Apply: Please submit a resume, cover letter, short writing sample, relevant transcripts, and three references to jobs@solsystemscompany.com. Applicants that are missing items from this list will not be considered as seriously as applicants that submit all items.

Deadline: Sol Systems is looking to hire for this position immediately.  We will review applicants on a rolling basis.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry.  Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes.  Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Sol Systems to Speak at Solar POWER-GEN February 13-15

Solar POWER-GEN Feb. 13-15, 2013

Sol Systems CEO Yuri Horwitz and CFO George Ashton will be speaking at Solar POWER-GEN, a multi-track conference program and concurrent exhibition that will take place at the San Diego Convention Center in San Diego, CA from February 13 to 15. Yuri will be speaking on the panel Who is Funding Solar Power Development in the Commercial and Residential Space? and George will be speaking on the panel Beyond Direct Incentives, Developing a Stable Market for U.S. Solar.

Solar POWER-GEN Conference & Exhibition provides a dynamic platform for information exchange, networking and new business development, all set in one of North America’s most progressive large-cale solar energy markets – California.  Solar POWER-GEN brings together the industry’s most forward-thinking professionals to discuss, plan and engage in the future of solar power.

To schedule a meeting in San Diego with our Yuri or George, please email us at info@solmarket.com.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry.  Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes.  Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Anna Noucas

PUCO Releases New Generation Start Date Eligibility

The Public Utilities Commission of Ohio (PUCO) recently ruled on changing the generation start date for all eligible renewable energy resource generating facilities submitted for approval to the PUCO in 2013.

The Public Utilities Commission of Ohio (PUCO) recently ruled on changing the generation start date for all eligible renewable energy resource generating facilities submitted for approval to the PUCO in 2013.

The Public Utilities Commission of Ohio (PUCO) recently ruled on changing the generation start date for all eligible renewable energy resource generating facilities submitted for approval to the PUCO in 2013.  For all applications received after December 31, 2012, all facilities submitted to the PUCO for approval will have a generation start date of the date the application was filed with the PUCO.

Credit will not be given for generation that occurred before the date of the facility’s application for certification as an eligible Ohio renewable energy resource generating facility. Facility owner’s will be able to report generation from the date of application for Ohio’s purposes, unless the facility is not yet online, in which case the facility owner can begin reporting from the in-service date.

Previously, solar facilities submitted to the PUCO for approval would receive a generation start date beginning on the date the application for the system was approved by the PUCO (which is 61 days after the date filed), or a facility could receive retroactive credit back to the date the facility began reporting so long as there was supporting documentation from a remote monitoring system.  Solar facilities will no longer be able to submit remote monitoring information or documentation to the PUCO for retroactive credit.

This generation start date change will only affect facilities located in OH and adjacent states. Sol Systems has reviewed these generation start date changes and is making the necessary changes to our registration service to allow for timely registration of solar facilities to the PUCO.  Please continue to follow our blog for any further updates to the registrations process.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry.  Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes.  Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Sol Systems to Speak at PV America East 2013

Several members from the Sol Systems team will travel to PV America East on February 5-7, and CEO Yuri Horwitz and CFO George Ashton will be speaking at the event, which takes place at the Pennsylvania Convention Center in Philadelphia, PA.

PV America East, Feb. 5 - 7 2013

Yuri will be speaking on a panel entitled “Fast-Track Financing for One Megawatt Commercial Customers” on Tuesday, February 5 at 10:30 am. George will be speaking on a panel entitled “Leveraging SRECs to Finance Your Solar Projects” on Wednesday, February 6 at 3 pm.

In addition to speaking at the conference, the Sol Systems team will also be sponsoring a cocktail hour following Tuesday’s welcome reception. To schedule a meeting with our team, or for more information on our cocktail event, please email us at info@solmarket.com.

PV America East is the regional trade show and conference designed to help businesses grow with the demand for photovoltaic technology. The conference program events include three concurrent power sessions and free PV technical training and resources for installers, salespeople and other solar energy professionals.

If you have yet to register for the conference, our 15% speaker discount is still available for those who register under the code SPKPROMO13.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry.  Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes.  Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

MD DC VA Solar Energy Industry Association Internships

About MDV-SEIA: MD-DC-VA Solar Energy Industries Association (MDV-SEIA) represents the interests of photovoltaic and solar thermal equipment manufacturers, installers, distributors, and component suppliers.  Solar has made tremendous strides in the Mid-Atlantic over the last few years and MDV-SEIA has led the policy changes that have created this market.  In the last two years alone, MDV SEIA’s leadership has resulted in increased state mandated requirements as well as increased penalties for non-compliance, creation of a solar thermal market, improvements to net metering, and game changing gains in the deployment of these green energy technologies.

Position description: MDV-SEIA is seeking interns to support: membership communications, and accounting and administrative functions.  We are seeking to fill immediately and for the long-term.  These interns will work closely with our Board of Directors leaders in our industry.  The internships will provide hands on experience in our rapidly growing industry, will develop broadly applicable careers capabilities and will provide access to our dynamic and growing membership.  Work hours will be structured to meet the individual needs.  We will support any student who wishes to use the internship towards academic credit.

Responsibilities: Interns will be provided an environment where they will assist with research; membership sales; membership support; writing newsletters; tracking and reporting MDV-SEIA’s finances; and general support of the association’s operations.  The specific roles of a given intern will be developed based on the capabilities and experience of that intern and MDV-SEIA’s needs.  We will provide the interns structured tasks and project oriented work that provide opportunities to learn, develop capabilities and network in our industry.

Who should apply: Graduate and undergraduate students with a passion for green energy and sustainability who’s studies may include marketing/business, communications, accounting, political science/government, environmental studies or related fields.   Professional work experience is a plus.

Compensation: At this time these internships are unpaid.

To Apply: Please submit an email describing your qualifications and resume to pranay.kohli@amidus.com.

Position is open until filled.

MD-DC-VA Solar Energy Industries Association

P.O. Box 181

Washington, DC 20044

http://www.mdv-seia.org/

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry.  Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes.  Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Is Merchant Solar the Future: When and How Could Utility-Scale PV Enter the Wholesale Energy Market?

by Josh Garrett for Sol Systems

As the drop in the federal Investment Tax Credit (ITC) from 30 to 10 percent in 2016 approaches, solar financiers, solar installers, and other solar partners are wondering if the industry can overcome its current dependence on federal tax credits by entering wholesale markets. Solar PV-generated electricity from utility-scale projects could be sold on one or more of the U.S. regional markets along with electricity from conventional generation sources and take the form of “merchant solar.”

Following the deregulation of many state energy markets in the 1990s, six major trading hubs managed by Regional Transmission Operators (RTOs) have emerged. On these markets, Independent Power Producers (IPPs) make deals with electric utilities to supply electricity. The liberalization of power markets has without question made the wholesale energy industry more competitive, though its effects on wholesale and retail electricity prices have been mixed. While much of the continental U.S. trades wholesale power on RTO markets, there are still many states that produce, sell, and distribute electricity under the pre-1990s model characterized by vertically integrated utilities, making for a patchwork of regulated and deregulated distribution zones across the country.

When considering how utility-scale solar power might fit into existing deregulated wholesale markets, it is worth noting that the most promising and fastest-growing solar PV markets lie within deregulated regions: the Mid-Atlantic, New England, California, and Texas. At first glance, this geographical overlap provides support for hopes of merchant solar entering wholesale markets in the near future. But such an industry shift relies on a host of other important factors, namely production costs, market liquidity, and prices.

Currently, those factors are not aligned in such a way that favors merchant solar. But the looming expiration of the wind industry’s Production Tax Credit at the end of this year has led merchant wind to blaze a renewable energy trail into wholesale markets.  As Lincoln Renewable Energy COO Dan Foley explained to Greentech Media in November of last year, one funding model that has worked for the wind industry and could be applied to merchant solar is the synthetic power purchase agreement (PPA). Technically, synthetic PPAs are not “merchant” deals, though they are similar, as they are based in transactions made on wholesale electricity markets.

According to Foley, the synthetic PPA is the result of a long-term agreement between IPPs and power marketers to sell electricity to purchasers on the market, known as load-serving entities (LSEs). Through synthetic PPAs, independent power producers can establish swaps with power marketers in which payments are made based on the difference between the hourly clearing prices for wholesale electricity and a fixed price previously agreed upon by both parties. The swap deals between IPPs and marketers work parallel to LSEs purchasing electricity from the market at the clearing price. Under these swap agreements, the IPP pays the marketer the difference between the fixed and clearing price when the clearing price is higher; when the clearing price is lower than the fixed price, the marketer pays the IPP the difference.  These contract-settling payments take place every hour as the clearing price fluctuates.  See the table below for a simplified example of how a synthetic PPA between a power producer and a power marketer would work:

Sample Synthetic Power Purchase Agreement

Agreed-upon fixed price: $50 per megawatt-hour

Time Market clearing price (per mwh) LSE pays market (per mwh) IPP pays marketer (per mwh) Marketer pays IPP
Hour 1 $45 $45 0 $5
Hour 2 $57 $57 $7 0

Such agreements, Foley explained, provide IPPs with price certainty that can be used to attract solar tax equity financing for a given project.

For now, however, the market conditions for solar to follow wind’s example in the wholesale space aren’t quite right, but many factors are trending in the right direction: solar panel costs are declining, panel efficiency is improving, and the price of natural gas is on the rise after bottoming out in early 2012.

Looking more closely at wholesale electricity prices along the East Coast, the New England (ISONE), New York (NYISO), and Mid-Atlantic (PJM) markets are relatively pricey.  According to the Energy Information Administration’s November Electricity Monthly Update, from September 2011 to September 2012, wholesale prices ranged from about $20 to $150 per MWh in New England, from $25 to $180 per MWh in New York, and from $25 to $125 per MWh in the Mid-Atlantic (see chart for additional information).  These high prices, as compared to prices in other regional markets, provide a slightly lower barrier to entering wholesale markets for developers along the eastern seaboard.

Is merchant solar the future of the utility-scale PV?  Given the rapid growth and streamlining of the U.S. solar energy in recent years, it appears to be a strong possibility. The state of the industry at the ITC expiration three years from now will likely hold the definitive answer.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Jessica Robbins

All the Details You Missed on LADWP’s Feed-in Tariff Program

The recently approved feed-in tariff program in Los Angeles, voted on by the Los Angeles Department of Water and Power (LADWP) Board of Commissioners on January 11th, has sparked a good deal of coverage over both questions and concerns – mostly surrounding how well the program will perform. Those interested in the incentive won’t have to wait long for answers. The program is set to open the first of five 20 MW rounds on February 1st, and is already receiving early applications. Applications will be reviewed on a first-come, first-serve basis.

The pricing for the program, which begins at $0.17/kWh and will drop by one cent per kWh each round, does not have an escalator attached to it. For each 20 MW increment, 4 MW will be reserved for smaller projects between 30 and 150kW. The total capacity of small projects can exceed this limit, but the total capacity of projects in the 151kW-3MW range cannot exceed 16MW for each 20MW round.

If a round goes undersubscribed, the pricing will roll over but the capacity will not. For example, if contracts for only 8MW of the first 20MW round are awarded at pricing of $0.17/kWh, the next round will still only award 20MW of contracts, but the first 12MW will receive pricing of $0.17/kWh while the balance of the round will drop to $0.16/kWh. This policy is designed to prevent a spike in workload for the staff of the FIT program, avoiding delays and ensuring that the program can progress on schedule. If at the end of the program there is a significant amount of capacity left unsubscribed, it is possible that LADWP will consider releasing an additional program to fill it.

If the program is oversubscribed, LADWP will continue accepting applications but will not reserve allocations for systems in the queue. Once the full 20MW of one round is awarded, applicants still on the wait list will be notified and must re-apply for the following round at the lower pricing. While LADWP does not expect the program to become oversubscribed initially, they do expect that within a round or two developers and installers will become familiar enough with the program to eventually fill it to capacity. However, launching the full program at a price lower than the average price for the pilot program, then decreasing it twice per year, may limit the number of successful projects built through this feed-in tariff.

Details on required application documents can be found in the packet of information released to the Board of Commissioners that is available here. The application process for this program is also very similar to the pilot program that preceded it, making it easy for developers to apply early.

Sol Systems will continue tracking this program closely. For more information on our company or to discuss financing options for California projects, please reach out to info@solmarket.com or call 888-235-1538×2.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Anna Noucas

Connecticut Small ZREC Program Open and Accepting Applications

Sol Systems is currently aggregating several small ZREC projects, specifically projects that are 50 kW or larger, have or will be submitted into the CT Small ZREC Program, and are looking for third party financing.

Sol Systems is aggregating projects that are 50 kW or larger submitted into the CT Small ZREC Program and are looking for third party financing.

Connecticut Light & Power (“CL&P“) and United Illuminating (“UI“) officially opened the window for submitting applications into the Connecticut Small ZREC Program on January 8, 2013.  This program will be accepting applications through January 22, 2013.

The Small ZREC Program offers a unique opportunity for projects under 100 kW (AC) to receive financing through a fixed price ZREC contract for 15 years.  The pricing differs between CL&P and UI and is based on the weighted average price of the approved medium ZREC contracts, awarded to projects between 100 kW and 250 kW in later 2012 through a competitive RFP bidding process.  The pricing for each utility is as follows:

UI Rate: $148.89/ZREC
CL&P Rate: $164.22/ZREC

To participate in the Small ZREC Program, projects must meet the following criteria:

  • Located behind contracting utility revenue meter and have a dedicated REC meter
  • Must not have received funding or grants from the Clean Energy Investment Authority or its predecessor, the Connecticut Clean Energy Fund
  • Projects must be in service on or after July 1, 2011
  • No larger than 100 kW (AC)
  • Must have zero emissions – this may include solar, wind, and hydro
  • Developers must have site control

The total number of applications selected will be based on a set budget of committed funds, which is approximately $2.7 million between the two utilities.  In total, $2.36 million is attributed to CL&P and $552,310 is attributed to UI.  The selection process is a first come, first serve process based on date and time of application submission.  All projects submitted in the two week window does not exceed the allotted budget, then all applications will be accepted.  If the total number of projects submitted does exceed the allotted budget, random selection will occur.

Sol Systems is currently working on behalf of several investors who are interested in ZREC-eligible projects.  Our team is currently aggregating several small ZREC projects, specifically projects that are 50 kW or larger, have or will be submitted into the CT Small ZREC Program, and are looking for third party financing.  By aggregating a pool of smaller projects, Sol Systems is helping to bring capital to project sizes that traditionally lack capital, while also providing our investors with the opportunity to diligence and purchase multiple projects in one round of transactions.

If you have a project that has been awarded a ZREC contract and is looking for financing, please contact our team at info@solmarket.com or (888) 235-1538.  Our team would be happy to discuss your project with you and assess financing opportunities.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry.  Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes.  Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Sara Rafalson

January 2013 Solar Project Finance Journal

Every month, Sol Systems distributes a newsletter, the SolMarket Project Finance Journal, to our community of solar developers and investors. The journal features solar finance statistics, trends, industry news, and information about SREC markets that we garner from our relationships and experience aggregating SRECs and financing commercial and utility scale solar projects via SolMarket.

We have included excerpts from our January SolMarket 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 for which you are seeking financing, please contact the SolMarket team at info@solmarket.com.  We would love to hear from you.

Project Finance Statistics

Characteristics of “Hot Projects” on SolMarket

Capacity: 149 kW – 3 MW
Average capacity: 1,284 kW
Competitive EPC Costs: For mid-size commercial projects, EPC costs in the range of $2.25 to $2.50 are currently competitive.

PPA rates:

  • CA: 10.8 cents/ kWh (20 year term; no escalator)
  • DE:  9.9 cents/ kWh (20 year term; 2% escalator)
  • MA: 8.6 cents/ kWh (20 year term; 1.5% escalator)
  • NY: 9 cents/ kWh (15 year term; no escalator)

Feed-in Tariff rates:

  • FL: 29 cents/ kWh (20 year term; no escalator)
  • NY: 22 cents/ kWh (20 year term; no escalator)
  • RI: 32.2 cents/ kWh (15 year term; no escalator)

Characteristics of Recently Funded Projects

Capacity: 100 kW – 12,000 kW
Average capacity:  1,194 kW
Locations:  AZ, CA, CO, DE, HI, IN, MA, MD, NJ, NC, OH, PA, TN

Trends and Observations

Solar Investment Quickly Getting More Mainstream

Solar investments in the U.S. are becoming more mainstream –and quickly.  In the last two weeks alone, we have seen interest in solar as an investment from small investors to billionaires.

On one end of the investment spectrum, we saw developments from Solar Mosaic – a company that offers the opportunity for individual investors to “crowd fund” their money into solar projects through an online marketplace. Minimum investments start at $25.

On the other end of the spectrum, we saw the announcement that Mid-American would acquire SunPower’s Antelope Valley projects for $2-2.5 billion, which incited a rally in solar stocks.  As many know, Mid-American is backed by Berkshire Hathaway and Warren Buffett, one of the world’s wealthiest and most influential investors.  Buffett is considered by many to have the “golden touch” when it comes to choosing investments.  We hope and expect that other investors will follow suit in regarding solar as a safe, long-term asset.

Here at Sol Systems, we have seen increasing investor interest in the middle of the spectrum with corporate investors and hedge funds.  Most recently, we partnered with a Fortune 100 company to deploy tax equity into the solar space.  With this investor, we closed two 2.5 MW tax equity deals. Our hope is to bring on additional investors that will bring much needed capital to this middle market segment.

3 Tips for Attracting Investment to Your Solar Projects

Of all the good and bad projects that our team diligences, there are a few key attributes that arise time and time again. To give your project the best chance of attracting investment capital, we would offer the following advice:

1. Keep Project Costs Down

Panel pricing still represents a significant portion of total project costs, so it should remain important as you assess potential cost reductions.  In addition, make sure that you are using the most recent, most competitive EPC costs, as these have been declining significantly over the past few months.

And perhaps most importantly, do not lose sight of other cost centers that do not increase the project’s value to prospective investors.  For example, a cost that improves the system’s energy production, such as a tracker system, may be economical, whereas a roof replacement cost will simply lower the project’s IRR and decrease the investor’s ROI.  There are always exceptions, but in general, we would also advise developers to steer clear of sites that have high permit costs, high interconnection costs, or additional interconnection upgrade/infrastructure costs.

2. Secure Local Incentives

Investors want to see reliable, long term income for their investments.  Often, a significant portion of that income will come from regional incentive programs, such as a feed-in tariff, a long term SREC program, or another type of multi-year rebate.  If you operate in one of these regions and have a strong understanding of the local incentive programs and hosts, we would encourage you to leverage your presence, get in line, and secure those incentives (at a competitive price, of course).

For example, we recently helped fund a 1.8 MW project portfolio in Indiana – a state that is not typically regarded as a strong solar market.  The critical factor that made these projects attractive to investors was that the developer had done a great job of securing a 20-year contract from its regional feed-in tariff program.

3. Use Strong Lease/PPA Agreements & Use Them Consistently

We continually run across clauses (or entire agreements) that are unfinanceable because they grant too much value or flexibility to the host.  While it is important to write a contract that works for the host, developers should remember that they have two sets of clients: the host and the investor.  Both sets of clients need to be satisfied before a project will be built. It is, of course, always possible to renegotiate agreements once you find an investor, but it is much easier to move a project forward if it has strong agreements in place without much need for rework.  Sol Systems provides our community with access to bankable solar agreements (available at no cost on www.solmarket.com) developed by our law firm partner, Cooley LLP.

Likewise, we encourage our developer and installer partners to use agreements consistently.  Project due diligence, and legal fees in particular, represent a huge cost center for investors.  In fact, one major reason that investors often do not like projects under 1 MW is because they have to spend so much money on legal fees to analyze the various contracts.  In an ideal world, all developers would use a standardized set of agreements so that the projects could be easily grouped into portfolios for investment.  While the solar community is not there yet, we encourage developers to stay as consistent as possible with contracts from project to project.

Markets: What’s Hot

If you have projects in any of the following markets, please contact the SolMarket team to discuss financing options:

  • Rhode Island and Vermont have small FiT programs that are paving the way for some attractive projects.
  • Colorado’s solar market is plugging along with it’s SREC program through Xcel Energy. We have seen a few good projects with municipal hosts in the 500 KW range coming through.
  • New York with its LIPA FiT and NYSERDA grants continue to generate interest.
  • DC and Maryland remain attractive due to their strong SREC markets. DC in particular is a great market in terms of SREC pricing, but available space for solar projects is highly limited due to DC’s urban landscape.
  • Connecticut’s ZREC program has launched and is accepting bids for systems over 100 KW.

SREC Roundup

SREC pricing did not change for any Sol Annuity and Sol Upfront solutions for the month of January.  If you are interested in our Sol Brokerage clear prices and price movements on the spot market, please view our SREC clear prices, which are updated quarterly.

If you would like more detail on SREC market conditions, please contact our team at 888-235-1538 or info@solmarket.com. The SolMarket community also has the opportunity to view historic SREC marks and model future pricing using their own market assumptions.  To utilize our SREC supply and demand model, please visit https://www.solmarket.com/srec-prices.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Jessica Robbins

LADWP Approves First 100MW of 150MW Feed-in Tariff

On January 11th, the Los Angeles Department of Water and Power (LADWP) Board of Commissioners voted to approve the first 100MW of a 150MW solar feed-in tariff program, designed to help Los Angeles achieve its renewable energy goals through 2016. The program could be open for applications as soon as February 1st, and will be released in 20MW increments every six months with reserves for smaller project sizes (30kW to 150kW). The maximum project size is 3MW.  The last 50MW will come before the Board for a vote in March, once the program is up and running.

Previously, LADWP launched a modest pilot program in spring of 2012 for 10 MW of capacity, only 3.7 MW of which will receive contracts at an average weighted price of $0.175/kWh. This average weighted price influenced the pricing for the larger procurement program which now has a set price of $0.17/kWh for 20 years. That pricing will gradually decrease for each 20MW of capacity contracted for under the feed-in tariff, eventually dropping down cent by cent to $0.13/kWh by the end of the program. 20MW increments will open for applications every six months. Ideally, the procurement program will gradually bring solar in Los Angeles in line with the average cost for other energy sources, program administrators hope, by the time the 30% investment tax credit (ITC) falls to 10% in 2016.

Not all feed-in tariff programs in California have found similar success. For instance, the city of Palo Alto released a small $0.14/kWh program in 2012 that failed to receive any applications, presumably because the set price offered was too low to lead to viable solar projects. While $0.17/kWh is above the current avoided cost for LADWP, officials decided to launch the program at higher-than-average prices in order to meet upcoming renewable energy targets. LADWP aims to get 25% of its energy from renewable sources by 2016 and 33% by 2020.

Because most of the capacity in this program will likely be sited on rooftops, site selection plays an important role in keeping costs reasonable and ensuring that the project is financeable. Sol Systems will be tracking the LADWP feed-in tariff closely as additional program materials are released. Should you have a project that you are bidding into the LADWP Program or have questions about financing for other California projects please contact info@solmarket.com. Our team would be happy to discuss your project with you and assess financing opportunities.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Sol Systems is Hiring! Junior Analyst

Position:  Junior Analyst

Company: Sol Systems is a solar energy finance firm and solar renewable energy credits (SRECs) aggregator founded with the intention of facilitating the development of the solar energy market.  We currently have over 3,500 customers and 400 solar installer and developer partners and manage multi-megawatts of solar projects. 

Requirements: Sol Systems is seeking a junior analyst to provide administrative and secretarial support to the CEO as well as the rest of the team.  The ideal candidate would be someone who is hard working, extremely organized, detail-oriented, personable, and has the ability to multi task in order to accomplish assignments in a timely manner.  A successful candidate will possess the following skills and attributes:

  1. Bachelor’s degree
  2. A great attitude and lots of enthusiasm
  3. Office experience – including excellent written and verbal communications, and face to-face interaction with colleagues, customers, etc.
  4. Proficiency in Microsoft Office Suite – including Word, Excel, Powerpoint, and Outlook.  Access a plus.
  5. Team oriented.
  6. Ability to learn quickly while maintaining a keen eye for details and staying organized.
  7. Passion for the solar space.  Knowledge of solar a plus but not required.

Description: The Junior Analyst will be in charge of the overall management and maintenance of the office, while also being in charge of the following tasks:

  1. Office management and support
  2. Conference tracking and planning
  3. Event planning
  4. Scheduling travel
  5. Scheduling and managing meetings for team members
  6. Coordinating conference calls
  7. Answering incoming customer phone calls and email inquiries
  8. Processing customer contracts
  9. Small solar research tasks as they arise
  10. Other Responsibilities as Assigned

Location: The Junior Analyst will be expected to work out of our office in Dupont Circle. Our business hours  are typically from 9:30am to 6:30pm.

Commitment & Compensation: This is a full time position.  Compensation will be $25,000-30,000 per year depending on experience.  In addition, Sol Systems provides health insurance, retirement benefits, gym discounts, paid vacation and federal holidays, plus the opportunity to work in a unique & dynamic startup environment.

To Apply: Please submit a resume, cover letter, short writing sample, relevant transcripts, and three references to jobs@solsystemscompany.com. Applicants that are missing items from this list will not be considered as seriously as applicants that submit all items.

Deadline: Sol Systems is looking to hire for this position immediately.  We will review applicants on a rolling basis.

Jessica Robbins

Sol Systems is Hiring! Internships Summer 2013

Position: Solar Analyst Intern (multiple positions beginning in January, 2013)

Company: Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry.  Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes.  Developers seeking financing for projects can access over $2.5 billion in capital through the Sol Systems investor network.  In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

Our company is based near Dupont Circle in Washington, D.C. The Part-Time or Full-Time Solar Analyst would have the opportunity to become intimately engaged in the day-to-day operations of the company as well as long-term strategy decisions.

Requirements: The ideal candidate will be a current student that is: resourceful, detail-oriented, and passionate about the development of renewable energy.  A successful candidate will possess the following skills and attributes:

  1. Enthusiasm and a great attitude
  2. Intermediate to advanced understanding of Microsoft Excel
  3. Excellent research and persuasive writing skills
  4. The ability to understand a complex and evolving market
  5. A demonstrated interest in energy, renewable energy, energy finance, project finance, entrepreneurship, renewable energy legislation and regulations

Description: A successful Solar Analyst Intern will be critical to the success of a dynamic company in a nascent industry. The Solar Analyst Intern will assist with registration processes, administrative duties, and research tasks.

The Analyst will be expected to provide clearly defined deliverables, related primarily to administrative tasks. The position will require attention to detail, excellent record keeping, and efficient allocation of time and resources. Through this position, the Solar Analyst Intern will gain familiarity with solar legislation, solar finance mechanisms, industry news, and industry language, as well as new product development in a fast paced, start-up environment. This position provides a fantastic launching pad for a career in renewable energy.

Our Approach: We are a group of passionate and capable individuals dedicated to making a lasting and positive change to our energy infrastructure and resources.  We are involved in a challenging environment and a competitive market with a high level of intensity.

Location: The Solar Analyst Intern will be expected to work out of our centrally located office in Dupont Circle: 1785 Massachusetts Avenue NW, Washington DC 20036.

Commitment & Compensation: We prefer applicants willing to work full time, but will also accept applicants willing to work part time with an expectation of 20 hours or more each week.  Special attention will be given to interns that could stay on full or part time into the fall. Solar Analysts will be paid an amount commensurate with the length of the commitment and prior experience in the form of a stipend.  Successful candidates may be eligible for a full time position.

To Apply: Please submit a resume, cover letter (no more than one page each), a short writing sample, and three references (a mix of academic and professional) to jobs@solsystemscompany.com.  In the cover letter, be sure to address the following questions:

  • Why do you want to work for Sol Systems?
  • Briefly, what is your perspective on the solar industry?
  • What past experience qualifies you for this position?

Deadline: Applications for this position will be accepted immediately. We will review applicants on a rolling basis and accept candidates as early as possible. Please apply early.

Caribbean Holds Great Potential for Solar Development, but Opportunities are Uneven

By Josh Garrett on Behalf of Sol Systems

http://www.solsystemscompany.com

With year-round sunshine and exorbitantly high electricity prices, the island nations and territories of the Caribbean offer great potential for solar projects. High irradiance and high prices not withstanding, each island is home to a unique set of pros and cons when it comes to the expansion of solar development.

With the exception of oil- and gas-rich Trinidad and Tobago, the Caribbean islands are poor in conventional energy resources and their location hundreds of miles away from the mainland necessitates the costly importation of fuel (mostly oil) to generate electricity. The result is retail electricity prices several times higher than the $0.12 per kilowatt-hour (kwh) paid on average for residential electricity in the 50 United States .

Electricity prices in the U.S. territory of Puerto Rico fall in the middle of the Caribbean range, with the island’s electric utility, Puerto Rico Electric Power Authority (PREPA), charging residential customers an average of $0.28 per kwh as of March 2012. Like many of its neighbors, the bulk of Puerto Rico’s electrical generation—68 percent in 2011—comes from imported petroleum, with imported natural gas (16 percent) and coal (15 percent) comprising smaller shares, and hydroelectric contributing just 1 percent. With dependency on expensive fossil fuels making electricity bills the biggest share of living expenses for the island’s 6.9 million inhabitants, seeking out cheaper energy sources has for years been a priority for Puerto Rican citizens and policymakers. Just weeks ago, this focus on bringing down energy prices led to the groundbreaking of what will become the Caribbean’s largest solar installation, a $265 million project funded by CIRO Energy Group, One Planet Caribbean, and GCL Solar Energy Inc. Around the same time, ground was broken on a smaller solar project—the Salinas Solar Farm, a $36 million effort funded by partner companies Sonnedix and Yarotek that is slated to generate 10 megawatts (MW).

With vocal support for these and other renewable projects coming from prominent island politicians, it is clear that political will to bring more solar power to Puerto Rico is strong. That support underlies a raft of incentives in the Economic Incentives for the Development of Puerto Rico Act (EIA), which passed in 2008. Highlights of the EIA include a 4 percent fixed income tax rate for 15 years, a tax credit equal to 50 percent of material costs, a tax credit of up to 50 percent of research and development costs, and a 90 percent exemption from real and personal property taxes for 15 years (for more details on these incentives, visit dsireusa.org). Puerto Rico also has a renewable portfolio standard (RPS) that mandates 20 percent of electricity generation from renewable sources by 2035.

The 110,000 residents of the neighboring U.S. Virgin Islands (USVI) face staggeringly high electricity rates of $0.47 per kwh, thanks to nearly 100 percent reliance on foreign oil for electricity generation and desalination operations. In response, the USVI partnered with the National Renewable Energy Laboratory (NREL) to draw up plans for cutting fossil fuel consumption on the islands by 60 percent by 2025 However, the plan calls for solar power to replace only 3 percent of fossil fuel usage, as the USVI’s small geographic size and inflexible electrical grids are inhospitable to utility scale solar projects.

On the other hand, demand for residential solar in the USVI appears to be strong and growing. The Virgin Islands Energy Office reports that about 100 residents are participating in the islands’ net metering program in cooperation with the territory’s Water and Power Authority (WAPA).

Outside of U.S. territories, many Caribbean island nations are in the midst of political and commercial pushes toward embracing solar power. Just last month Solaris Energy Ltd. Opened the Caribbean’s newest solar equipment manufacturing facility in the St. Phillip, Barbados. The factory marks the latest expansion by the 20-year-old Solaris, which is based in Barbados but has branched out to other islands including Trinidad, Jamaica, and Grenada.

Barbados has a long way to go before it can claim a large and robust solar energy sector. While net metering legislation is in the works in Barbados, it has yet to be submitted, approved, and implemented. Nevertheless, solar expansion in Barbados will likely accelerate in the next few years as the government strives toward its goal of 29 percent renewable electricity generation by 2029 .

The islands of the Caribbean have many reasons to invite and incentivize solar development—lower electricity prices and reduced fossil fuel use confer valuable benefits upon island citizens. Publicity surrounding these benefits in recent years has built a strong desire for more solar electricity generation throughout the region. Sol Systems has seen the most sophisticated market so far developing in Puerto Rico, but is optimistic that other island nations will present strong investment opportunities in future years. We encourage developers seeking financing solutions for solar projects in the Caribbean to contact our SolMarket team, as Sol Systems will continue to track market development in the region.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

What Does the Fiscal Cliff Deal Mean for the U.S. Solar Industry?

Several weeks ago, we wrote on the potential implications of the “fiscal cliff” for the U.S. solar industry if Congress and the President failed to reach an agreement to prevent dramatic tax increases and spending cuts, which would have taken effect January 1, 2013.  Sequestration would have led to a reduction in the value of 1603 cash grants by 7.6%, and we hypothesized that overall the poor economic climate and high degree of uncertainty caused by a fiscal cliff would likely hurt the supply of tax equity available for solar projects, although the contraction would not be as detrimental as in 2008.

Since then, the U.S. House of Representatives passed the American Taxpayer Relief Act of 2012 257-167, after it had passed the Senate 89-8 on December 31st.  This deal reinforced the Bush-era tax cuts for individuals making under $400,000 and families making under $450,000, while increasing the  marginal income tax rates, the tax on capital gains and dividends, and the estate tax for those making over this $400,000/$450,000 level. These measures should raise around $600 billion in additional revenue.  The deal also extended 2009 stimulus tax breaks for low-income Americans for another 5 years, and extended temporary business tax breaks (including the wind PTC) for one year.  It did not extend the payroll tax holiday or solve the sequestration issue, and although financial markets have reacted positively, it is impossible to know how beneficial this deal will be for the U.S. economy. Moreover, the deal did not solve the long-term deficit issue.

The deal also had significant effects on the solar industry. First, the bill extends the 50% accelerated bonus depreciation to qualifying solar projects that are placed in service before January 1, 2014.  Solar projects with a commercial operation date (COD) in 2013 were already being modeled without this accelerated bonus depreciation, and this change will therefore will lead to a bump in the returns on solar project tax-advantage investors.  Second, the bill delays the sequester for two months, meaning there will be no immediate reduction in 1603 cash grants from the Department of Treasury.  However, this 1603 reduction can still happen on March 1, 2013 if Congress does not enact another extension or strategy to avoid sequestration.  Finally, the bill extended the production tax credit (PTC) for wind projects for one year – to the end of 2013.  Furthermore, the language for PTC eligibility was actually altered. This means that now a project must only have begun construction by the end of 2013, essentially giving wind projects a two year extension to achieve commercial operation.  This is good news for the U.S renewable industry and highlights the importance of attracting enough tax equity for both solar and wind projects in the U.S. over the next couple of years.

Finally, in the last article, we tried to predict the supply of tax equity if the fiscal cliff caused another recession for the U.S. economy.  We concluded that less fiscal uncertainty was the best solution, as this would allow potential tax equity investors to generate more profit, as well as have confidence in their net income. However, although a deal was reached, fiscal uncertainty remains. Treasury Secretary Timothy Geithner informed Congress that the U.S. has hit its debt limit and will only avoid default for an estimated two months through the use of emergency funding solutions.  Therefore, there will be another looming “cliff” at the end of February. To avoid this looming cliff, Congress will need to raise the debt ceiling, as well as address the sequestration issue.  Failure to address the debt ceiling would lead to default and likely downgrade the U.S. credit rating, potentially creating an economic reaction that will once again threaten the supply of U.S tax equity for renewable projects.  Finally, there is still the underlying need to find a way to reduce the deficit, something that the fiscal cliff deal failed to do.

In conclusion, there are a few specific effects that the American Taxpayer Relief Act of 2012 will have on the solar industry, most notably in regards to the extension of accelerated bonus depreciation. Moreover, the deal may still affect the the supply of tax equity available for solar projects. Therefore, this bill is likely just a temporary solution before another “cliff” once again threatens the U.S fiscal position.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com

Sol Systems Welcomes New Hire

Sol Systems is proud to welcome to the team Renewables Trader, Amber Rivera.

Amber Rivera - Renewables Trader: Amber Rivera leads daily trading activities for the Sol Systems SREC Portfolio, interacting with various participants in the SREC markets. Ms. Rivera also contributes to developing Sol Systems’ standard pricing offers, long-term trading strategies, and position trading executions. Additionally, she manages the company’s SREC research models, forecasting supply and demand technicals, tracking daily market prices, and calculating the portfolio’s risk position.

Prior to joining Sol Systems, Ms. Rivera was an analyst at an international economic and financial consulting firm. She has advised utility companies, fund managers, governments, and financial institutions in the electricity and water sectors of Latin America, the Caribbean, and Africa.

Ms. Rivera graduated with honors from Georgetown University’s Walsh School of Foreign Service with a B.S. in Science, Technology, and International Affairs.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com

William Graves

IRS Rescinds PLR: Changes Valuation Structure of Energy Facilities

In January of 2012 the IRS released a Private Letter Ruling (PLR) indicating that energy facilities with specific PPAs would be valued based on the pooled value of the physical asset as well as the value of the PPA.  In essence, this means that two otherwise identical projects would be valued differently if one has a more lucrative PPA than the other. Through this ruling, energy facilities with favorable PPAs could increase their value, thereby increasing the size of the Investment Tax Credit.

However, on December 7, 2012, the IRS released a “Revocation of Private Letter Ruling”, stating that the asset and the PPA would be valued separately, not together, as originally specified. Since 2011 the Treasury has been valuing projects in this manner, and the IRS’ most recent ruling aligns the valuation methodology between the two agencies.

At this time, it is unclear how exactly this change will play out in the ITC marketplace. Our initial analysis indicates that many projects will have a less favorable valuation.  If a project with a PPA already in place is purchased, a certain amount of the purchase value in a sale of the project may be allocated to the value of the PPA.  As a result, a reduced portion of the overall purchase price would then be allocated to the hard project assets (the basis upon which the ITC is calculated).  Thus, project valuations may experience a marginal decline, as may the amount of the related ITC.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com

Sol Systems CEO Participates in Panel at POWER-GEN International Financial Forum

Last week, Sol Systems CEO, Yuri Horwitz, participated in a panel discussion on Financing Trends for Energy Projects at the POWER-GEN International Financial Forum in Orlando, Florida. In this discussion, panelists provided an overview on emerging trends in the renewable energy finance space and explored innovative funding mechanisms. Panelists included Ralph Cho (Managing Director, WestLB AG), Chris Diaz (Partner, Seminole Financial Services LLC), Todd Grenich (CEO, Eco Power Capital) and Michael Madia (Director & Operating Partner, RREEF Infrastructure Americas).

POWER-GEN International 2012 Conference

Project financing is one of the biggest challenges faced by the solar industry and it is important for industry leaders to continue discussions to develop finance strategies that will promote growth in the renewable energy market.

If you have any questions on how the SolMarket team can help you with financing for commercial or utility-scale projects, please contact our team at 888-235-1538 x2 or info@solmarket.com. We look forward to hearing from you.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Sol Systems Featured in Greentech Media: What Would the Fiscal Cliff Mean for the U.S. Solar Market?

Sol Systems Associate Andrew Gilligan was recently featured in Greentech Media for a piece he wrote on the fiscal cliff.

What Would the Fiscal Cliff Mean for the U.S. Solar Market?

As the impending “fiscal cliff” appears looms, government agencies and many industries are preparing for federal tax increases and spending cuts. Although the solar industry is not as directly vulnerable as some, it is still helpful and pertinent to understand what a post-fiscal cliff landscape might entail for the U.S. solar industry.

What is the Fiscal Cliff?

The term “fiscal cliff” was originally coined by Federal Reserve Chair, Ben Bernanke, and refers to the estimated $500 billion in tax increases and $200 billion in spending cuts that are scheduled to take effect on January 1st, 2013.  Congressional decisions over the past few years, combined with the expiration of certain measures at the end of 2012, have created a need to reach a deal by the end of the calendar year.  Without a deal, austerity measures could throw the U.S. back into a recession, as the Congressional Budget Office (CBO) estimates that tax increases and spending tax cuts would equal four percent of GDP — greater than the approximately two percent of the U.S. economy growth rate– thus creating a contraction in the economy.

Some of the most significant triggers of the fiscal cliff include the expiration of the Bush tax cuts and payroll tax holiday which would raise taxes significantly for many Americans (over $300 billion).   The other major basis of the fiscal cliff is sequestration – spending cuts of around $110 billion in Medicare payments and discretionary spending – which would go into effect as mandated by the Budget Control Act of 2011, which was enacted during the debt ceiling debate.   Neither Republicans nor Democrats want these austerity measures to go into effect, and many analysts are in agreement that failure to reach a deal could hurt the majority of Americans.

Sol Systems was recently featured in Greentech Media.

Sol Systems was recently featured in Greentech Media.

However, according to President Obama and House Speaker Boehner, the opposing leaders in this negotiation, little progress has been made in reaching a deal.  The main sticking point has been taxes for those individuals making $250,000 or more annually.  Democrats would like to increase this marginal tax rate (for those making more than $250,000) to Clinton-era levels of 39.6 percent, thus creating around $1 trillion of revenue.  Republicans are opposed to any tax rate increases and want the Bush tax cuts to be extended for those making over $250,000.  Republicans, meanwhile, have indicated they are open to raising revenue by eliminating deductions, but neither party appears any closer in finding compromise on tax revenue versus spending cuts, especially as it relates to increasing the marginal rate for wealthy individuals.

Assuming that no deal is reached, then the tax increases and spending cuts mentioned above would go into effect over the next two years, and the U.S. would be at risk of falling into a recession.  The stock market would also likely react poorly, driving stock prices and company valuations downwards, potentially comparable to the response of global markets to the financial crisis experienced in 2008.

How would the fiscal cliff affect the solar industry?

One direct effect the fiscal cliff would have on the solar industry would be the reduction in the 1603 cash grant payable for qualified projects.  The Sequestration Transparency Act of 2012 states that the 1603 cash grant would be reduced by 7.6%, resulting in a total spending reduction of $279 million. As an example, if a developer had a 2 MW solar project that was expected to receive the 1603 cash grant  at $3/Watt, their expected grant payment would go from $1.8 million to $1.66 million (a 7.6% reduction in the grant means that it would now be payable for 27.72% of the project cost).  This ~$137,000 difference would decrease the project’s IRR from 10% to 9.4%.  In certain cases, this IRR reduction could be below the investor’s required return hurdle, thus jeopardizing the financing for the project, and the developer’s ability to complete the system.

However, the OBM’s report does not specify exactly how the grant will be reduced or if the application process will change at all. Moreover, there is no effective date provided in the sequestration.  This environment causes uncertainty for investors closing deals and building “safe harbored” projects and may cause many investors to price in an extra margin for the increased risk.  

Solar Investment Tax Credit (ITC)

On the bright side, the main federal incentive for solar, the Investment Tax Credit (ITC) will still be in effect through 2016 and should not be affected by the sequestration spending cuts.  In fact, the lack of progress by Congress and the White House, in terms of larger tax reform, could actually be seen as a positive thing for the ITC. Congress has discussed targeting tax loopholes and government subsidies as a long-term strategy for reducing the federal deficit, and it is likely that ITC would at least be considered for the chopping block. However, the current gridlock and timeline has limited Congress’s ability to examine all tax loopholes and deductions.

How would the solar industry fare if the fiscal cliff caused another recession?

If the U.S. fell into another major recession with higher unemployment, increases in taxes, and a reduction in consumer spending, it’s safe to assume that the industry would see fewer customers purchasing residential and small commercial solar energy systems.  However, with the growing popularity of third party financing for residential and commercial systems, a reduction in purchased systems may turn out to have a negligible effect on the overall industry.   Much more important is the effect that the fiscal cliff could have on the tax equity market…

The Tax Equity Market in a post-Fiscal Cliff World

Prior to 2008, the tax equity market for solar and wind projects in the U.S. was fairly robust, although still very specialized, with 15-20 potential investors comprised primarily of financial institutions and insurance companies.   With the 2008 recession, the number of tax equity investors greatly contracted. In order to support the economy and encourage investment, the federal government elected to provide a “grant in-lieu-of tax credit” which is also known as the Section 1603 cash grant. This grant, which stemmed from the American Recovery and Reinvestment Act of 2009 (ARRA), became a lifeline for the solar industry as the tax equity market dried up following the 2008 financial crisis. Although new players are entering the market now, tax equity has still not returned to pre-financial crisis supply.

If the fiscal cliff is not avoided, it is possible that financial markets would react similarly to 2008, leading the U.S. economy into recession.   If the U.S. also defaults in February or March 2013, when the current debt ceiling is likely be reached, some analysts believe there could be a financial crisis of even greater scale than 2008.  However, assuming that worst case scenario does not happen, and we are only dealing with the austerity measures caused by the fiscal cliff, then it is still likely the solar industry would experience a contraction in the tax equity market.

According to the U.S. Partnership for Renewable Energy Finance (US PREF), there were $6.1 billion of tax equity supplied to wind and solar projects in the U.S. in 2007. That number decreased 44 percent to $3.4 billion in 2008, the year before the grant was implemented.  If a comparable decrease in tax appetite occurred between 2012 and 2013, it would substantially slow the growth of the solar industry.

Sol Systems estimates that there will be approximately $3.8 billion of tax equity investment necessary in 2013, and $4.67 billion necessary in 2014 to keep pace with the expected growth of the solar industry.  According to US PREF, the current 2012 tax equity appetite, for both wind and solar together, is estimated at approximately $3.6 billion (on an optimistic basis) implying that solar projects are already facing a shortage of tax equity in the market and that this shortage will continue in 2013.

If the $3.6 billion of tax equity available in 2012 decreased as much as it did in 2008, it would imply that only $2 billion of tax equity would be available for both solar and wind in 2013; thus creating a significant shortage in the market, and an environment where developers with good, bankable projects (at least by today’s criteria) would not be able to find requisite financing.

Fortunately, there is reason to believe the tax equity market would not contract as much in 2013 as it did in 2008. Of the ~20 tax equity investors active in renewable projects in 2007 according to US PREF, 10 of them dropped out of the market in 2008 due to insufficient taxable income or bankruptcy.  In 2008, these bankruptcies and losses were largely due to too much leverage in the financial system and risky bets on the housing industry by both banks and insurance companies.  Therefore, the worst hit companies in the 2008 financial crisis, players like Lehman Brothers and AIG, were also the same specialized investors who were previously active in the renewable energy tax equity market.  If there is a fiscal cliff induced recession in 2013, the companies at greatest risk would likely be defense-related companies, not the financial institutions that tend to invest in solar.

Furthermore, despite the imagery invoked by a fiscal “cliff,” the austerity cuts would likely take effect more gradually than would one believe. Therefore, current tax equity providers and new players would not see such a swift and unexpected drop in expected taxable income, as in 2008.  The more pertinent question will be if tax equity investors are still able to generate sufficient taxable income during a recession in 2013 to support planned tax equity solar investments.

Unfortunately for the solar industry, obtaining tax equity will continue to be the one of the main limiting nutrients for development in the U.S. over the next several years, with or without a fiscal cliff driven recession.

Conclusion

In the end, no one knows what will happen if a deal is not reached in Washington, but it can be said that fiscal uncertainty is a hindrance, not a help, to the solar industry.  A higher degree of certainty would allow tax equity investors, and their clients, to make business investments that generate taxable income, which could be used to invest in solar projects for the ITC and depreciation benefits.  Given this perspective, the industry should oppose the idea of letting Congress “kick the can” and push the fiscal cliff off until a distant future date.  Instead, the industry needs some type of long-term deficit resolution plan to allow tax equity investors to have the confidence in their future income and encourage active players to remain in the market.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Sara Rafalson

December Solar Project Finance Statistics

Every month, Sol Systems distributes a newsletter, the SolMarket Project Finance Journal, to our community of solar developers and investors. The journal features solar finance statistics, trends, industry news, and information about SREC markets that we garner from our relationships and experience aggregating SRECs and financing commercial and utility scale solar projects via SolMarket.

We have included excerpts from our December SolMarket 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 for which you are seeking financing, please contact the SolMarket team at info@solmarket.com. We would love to hear from you.

Project Finance Statistics

Characteristics of “Hot Projects” on SolMarket

Capacity: 149 kW – 3 MW

Average capacity: 1,275 kW

Competitive EPC Costs: We have seen a continued fall in EPC costs.  Where costs used to be at $2.75-$3.00, we are now seeing costs of $2.25 to $2.50 – or even as low as $2.10. These decreases will be increasingly necessary as local incentive programs and SREC prices continue to fall.
PPA rates:

  • DE:  9.9 cents/ kWh (20 year term; 2% escalator)
  • MA: 8.6 cents/ kWh (20 year term; 1.5% escalator)

Feed-in Tariff rates:

  • FL: 29 cents/ kWh (20 year term; no escalator)
  • NY: 22 cents/ kWh (20 year term; no escalator)
  • RI: 32.2 cents/ kWh (15 year term;  no escalator)

Characteristics of Recently Funded Projects

Capacity: 1,000 kW – 12,000 kW
Average capacity:  1,159 kW
Average cost (all-in): $3.27/ Watt
Locations:  AZ, CA, CO, DE, GA, MA, MD, NJ, NC, OH, PA, TN, TX

Trends and Observations

New SolMarket Investor with Interest in Projects in 50 kW – 500 kW Range

Sol Systems is working with an investor who is evaluating projects in the 50 kW – 500 kW size range, particularly projects in DC, MA, and MD.  This investor has tax appetite, experience investing in solar, and is comfortable with the underwriting and acquisition process.  As always, a given project will be more attractive to this investor if it can be grouped with similar projects into a 1 MW+ portfolio.  For example, a given project would ideally be grouped with projects that have the same incentive regime, energy offtaker, set of legal documents, or host.

The Limiting Factor in Solar Development: Tax Appetite

Through our daily communications with solar developers and investors, we are constantly reminded that tax appetite is the limiting factor for solar project development.  This challenge has become more pronounced with time given the expiration of the Section 1603 Grant in lieu of investment tax credit in December 2011.  While there are corporations with significant federal tax liability, there are two main limitations on getting these entities to invest in solar: lack of familiarity with solar as an asset class and a lack of familiarity with tax investment structures.  Additionally, there is a risk that a corporation’s federal tax appetite itself will contract if we hit the fiscal cliff and face another economic recession in 2013.  Our SolMarket team is bringing on new (non-banking) corporate investors who have not invested in large scale solar in the past, and we are educating these investors on risks, helping them address them, and working in concert with them to build portfolios of high quality projects.

SolMarket Investors Seeking Projects in Connecticut & Vermont

Projects in the Vermont SPEED program are starting to get attention from our investor clientele.  In particular, projects that have received their Certificate of Public Good (CPG) are generating interest.  The CPG indicates that a project is fully permitted, has a conditional interconnection agreement, and has received a notice to proceed.

There are also three categories of Connecticut projects that may be attractive to our investor network:

  • Connecticut projects that are under 100 kW that have an offtake agreement with a municipal or investment grade host
  • Connecticut projects above 100 kW that were awarded ZRECS in 2012
  • A 100 kW+ site in Connecticut that you plan to submit into the competitive CT ZREC process in April 2013

Please reach out to the SolMarket team if you have Vermont or Connecticut projects that meet these criteria. If you have an LOI or lease/PPA with a credit worthy host, we would be happy to help you set an ZREC bid price and help you identify prospective investors.

North Carolina and Tennessee Valley Authority Solar Markets Proving Tight

We continue to see several stranded projects in North Carolina, where the number of good projects outweighs the number of investors with NC state tax appetite.  Until we are able to bring on an investor with significant state tax appetite, North Carolina will be a challenging market for large scale solar.

We have also seen some portfolios of 2+ MW projects within the Tennessee Valley Authority region; however, the local incentives are not very rich, and the individual project limit of 50 kW makes it difficult to create portfolios with desirable returns.  With falling incentive levels in 2013 and a total program limit of 10 MW, the market will likely become even more difficult in the coming months.

SREC Roundup

SREC pricing did not change for any Sol Annuity and Sol Upfront solutions for the month of December.  If you are interested in our Sol Brokerage clear prices and price movements on the spot market, please view our Q3 SREC clear prices, which were updated at the end of November.

The SolMarket community also has the opportunity to view historic SREC marks and model future marks using their own market assumptions.  To utilize our SREC supply and demand model, please visit www.solmarket.com/srec_prices.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Anna Noucas

Small ZREC Program in Connecticut Set to Launch before the Holidays

Following the ‘Small ZREC Tariff Program: Applicants Informational Meeting’ held on November 27, 2012, United Illuminating Company (“UI“) and Connecticut Light & Power (“CL&P“) initially announced that the small ZREC program was set to open on December 21,

Connecticut small ZREC program set to open before the holidays.

Connecticut small ZREC program set to open before the holidays.

2012.  However, the December 21st date has now been officially changed to January 8, 2013, as UI and CL&P had requested that the Public Utilities Regulatory Authority (“PURA”) delay the program to avoid the opening of the solicitation in the midst of the holiday season and this delay was approved. There will be a two week window for when applications may be submitted into the program.

In conjunction, the utilities also announced the completion of the Medium and Large ZREC RFP.  UI’s large and medium contracts were approved by the PURA on October 11, 2012, and CL&P’s large and medium contracts were approved on November 21, 2012.  The pricing for the small ZREC program is fixed for a term of 15 years.  This pricing is based off of the weighted average of the medium ZREC price.  The pricing for each utility is as follows:

  • Proposed UI rate = $148.89/ZREC
  • Proposed CL&P rate = $164.22/ZREC

To participate in the small ZREC program, projects meet the following criteria:

  • Must be located behind contracting utility revenue meter and have a dedicated REC meter
  • Must not have received funding or grants from the Clean Energy Investment Authority or its predecessor, the CT Clean Energy Fund
  • Projects must be in service on or after July 1, 2011
  • No larger than 100 kW
  • Must have zero emissions – this may include solar, hydro, and wind
  • Developers must have site control

The total number of applications selected will be based off of a set budget of committed funds.  The total budget between the two utilities is approximately $2.7 million, with $2.36 million attributed to CL&P and $552,310 attributed to UI.  The selection process is a first come, first serve process based on date and time of application submission.  All projects submitted in the two week window will receive the same date and time stamp.  If the total number of projects submitted in the two week window does not exceed the allotted budget, then all applications will be accepted.  If the total number of projects submitted does exceed the allotted budget, then random selection will occur.

Sol Systems will continue to track this process on our blog and will provide any updates as these contracts progress.  Should you have a project that has been awarded a ZREC contract and are in need of financing, please contact info@solmarket.com.  Our team would be happy to discuss your project with you and assess financing opportunities.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry.  Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes.  Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscommpany.com.

Solar Incentive Roundup: CA, FL, HI, MT, VA

Virginia:

The State Corporation Commission (SCC) has approved Dominion Virginia Power’s Solar Partnership Program, a demonstration project that will allow Dominion to generate electricity by placing solar panels on commercial, industrial and public government locations in Richmond. Dominion will be leasing these rooftop spaces of 75,000 square feet or larger and the capacity of each installation will range from 500kW to 2MW. The Solar Partnership Program will expire in 2025. Dominion will own and directly finance these installations and the total program capacity is 30MW.

Virginia has a voluntary RPS program with a modest goal of 15% by 2025. This is the first distributed solar generation facility allowed by the SCC in Virginia and is an exciting  step towards increasing solar capacity within the state.

Montana:

On December 4, NorthWestern Energy identified the first round of respondents to its Montana Community Renewable Energy Project (CREP) RFP for an additional review and denied the rest of the respondents. This proposal request was issued on August 2, 2012 and the proposals were due on September 28, 2012.

NorthWestern Energy is looking to add up to 45MW of qualified CREPs to its Montana energy resource portfolio. They are willing to accept different contract structures and do not have a preference between PPAs and Build-Transfer Agreements. However, they do expect that Build-Transfer Agreements will take longer to approve. NorthWestern Energy has stated that they will neither submit proposals nor build in competition with these projects. The final list of developers will be determined by January 31, 2013.

NorthWestern Energy’s decision to augment its energy resource portfolio should prove successful in increasing the future capacity of locally owned renewable energy projects in Montana.

Hawaii:

On November 9th, the State Department of Taxation issued rules that clarify the definition of a PV system for the purposes of the Renewable Energy Technologies Income Tax Credit, a 35% income tax credit the state provides to solar PV projects and other renewable technologies. These rules will take effect on January 2013.

Under the new rules, PV systems of any size are still eligible for the tax credit; however, the credit cap will now be based on the system capacity instead of the number of systems installed. Homeowners will now earn one credit for every 5 kW PV installed instead of receiving one credit for every system installed. Therefore, the $5000 residential credit cap will now only apply to a 5 kW system and not to a system of any size. These new rules will prevent homeowners from dividing their systems into smaller increments in order to monetize on the credit cap.

The new rules also set capacity thresholds for multi-family homes that now earn one credit per 0.36kW. Each commercial system must have an output capacity of 1,000 kW (1 MW) per credit earned; the credit cap for commercial systems is $500,000. Before the new rules were instated, residential systems had a $5000 credit cap and commercial systems had a $500,000 credit cap per system without any clear system capacity requirements.

Florida:

The Gainesville City Commission recently announced that the 2013 round of Gainesville Solar Feed-in Tariff will include any program allotments that were approved but not built in 2012. This change is expected to add between 1.83MW and 2.53MW to Gainesville’s 2013 feed in tariff capacity. The city’s annual target feed in tariff cap is 4MW and the 2012 rates were between $0.19/kWh and $0.24/kWh depending on system size.

California:

On December 17, the Palo Alto City Council will consider amending the Palo Alto CLEAN (feed in tariff) based on a proposal submitted by the City of Palo Alto Utilities. This proposal includes increasing the amount paid to generators to $0.165/kWh for 20 year contracts and eliminating the 100kW minimum system size. The Palo Alto City Council will review the program once it reaches 2MW and will not purchase any additional capacity until the review. If the proposal passes a final vote on December 17th, the program will open on January 2nd, 2013 on a first-come, first-serve basis.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Sol Systems Participates in National Summit on Renewable Portfolio Standards (RPS)

Sol Systems’ Chief Business Officer, Sudha Gollapudi, recently attended the National Summit on RPS in Washington, DC. This event provided a platform for members of the State-Federal RPS Collaborative to discuss ideas and exchange experiences and lessons learned from Renewable Portfolio Standard (RPS) policies around the country. The summit was hosted by the Clean Energy States Alliance (CESA) and supported by the Energy Foundation and the U.S. Department of Energy.

Summit attendees included government officials, energy experts, and stakeholders. Presenters included representatives from National Renewable Energy Laboratory (NREL), U.S. Department of Energy, and various state utilities commissions. SREC price volatility, the implications of falling PV costs, the future of the production tax credits, and renewable energy policy and development were among the topics discussed at the event. The summit also provided an opportunity for attendees to participate in small group discussions regarding RPS issues by region, cases and issues related to due diligence, and methods that various states have utilized to assess the rate impacts of their individual RPS programs.

As a leading market maker for the solar industry, Sol Systems will continue to track RPS policies throughout the country and various incentives and how they relate to the interests of our broad network of investors, system owners, solar developers, and installers.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Solar Execs Abuzz With Post-Election Optimism

The solar industry’s top executives and most influential voices gathered in the nation’s Capital for Maryland-D.C.-Virginia Solar Energy Industry Association’s (MDV-SEIA) 6th Annual Solar Energy Focus conference last week. There was a palpable energy among the CEO-studded crowd of over 250 people in the growing industry, reinvigorated by the results of the recent election. Even outside of the high profile keynote addresses and informative breakout sessions, the halls were abuzz with excited conversation about the bright future of the U.S. solar market. Sol Systems was a platinum sponsor at the conference, and Sol CEO, Yuri Horwitz and CFO, George Ashton, were both featured speakers.

The conference featured 50 speakers in 11 breakout sessions, three keynote addresses and a lunch roundtable discussion focusing on post-election solar outcomes. Former CIA Director and Founder of the United States Energy Security Council, R. James Woolsey kicked off the conference with an address at the VIP dinner. Woolsey began by discussing the innate security problems with the large-scale electric grid system on which the U.S. functions, urging for a shift to more localized power generation. He then segued into a discussion of our transportation industry’s reliance on oil.

SEIA President Rhone Resch participated on the post-election market roundtable at Solar Energy Focus 2012

SEIA President Rhone Resch participated on the post-election market roundtable at Solar Energy Focus 2012

“If we could power transportation with solar, then we could begin to look at fundamental changes in how the world operates,” Woolsey said. He spoke in favor of a partnership with natural gas to take the place of oil in transportation, while the solar industry simultaneously expands in other spheres, resulting in a future where the oil industry “has serious problems keeping customers.”

Looking to the future “with almost unlimited promise and potential,” Lt. Gov. Anthony Brown validated Woolsey’s optimism the next day in a speech highlighting the local industry growth of solar in the State of Maryland. Over the past six years, renewable energy accounts for 6.7% of Maryland’s total generation, and the state has cut greenhouse gas emissions by 4.5 million metric tons. According to the Lt. Governor, the solar industry currently provides 2,300 direct and indirect jobs in Maryland—a number expected to double each year.

“We like innovation, we like entrepreneurship, and those are found in a competitive economy and competitive market,” said Lt. Gov. Brown, adding that the solar market provides just that.

Most of solar’s movers and shakers attribute the industry’s growth potential to a positive outcome in the most recent election. SEIA CEO Rhone Resch, in a lunch roundtable discussion, urged the room to consider how change is ultimately effected. “The entire business is built on policy. We need to support those who support,” he said, encouraging people to open their minds and their wallets to legislators who are on the industry’s side.

Resch further lauded the Obama administration on its solar-friendly efforts. He pointed out that Republicans made a “fatal miscalculation” by attacking clean energy it their campaign. In six of the swing states, clean energy was an issue on par with foreign policy and viewed as more important than abortion, making it a critical error for Mr. Romney to portray clean energy as a partisan issue.

Ending the conference on a high note, solar visionary Jigar Shah, commended the industry on how far it’s come. He encouraged attendees to be proud of what the industry has accomplished so far, to share technological innovations with friends, and to spread the word.

“I’m very glad about where we are and it’s because of the tireless work of the people in this room,” he said. He shared an example of an oil-inclined, Texas-based company that agreed to install 210 megawatts of solar, as evidence that the industry is truly flying high.

“Hold your heads up high. This is a really good industry, and most of us don’t brag about our industry. You need to start talking more about solar,” said Shah. “We are extraordinarily successful.”

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Sol Systems’ Q3 SREC Prices Available Online

At the end of each quarter, Sol Systems takes the weighted average sales of the SRECs from our 3,300+ customers to calculate our final clear prices. These SREC clear prices are then posted to Sol Brokerage page of our website.  Sol Systems publishes our quarterly SREC clear prices in order to help provide transparency to the SREC marketplace for both our Sol Brokerage customers and developers in the solar industry.

As the oldest and largest SREC aggregator in the country, Sol Systems’ portfolio management team leverages our SREC expertise to transact in the SREC market on a daily basis when we see strong opportunities for selling our customers’ SRECs at the highest market values.

The Sol Systems approach differs from other SREC broker services and auction-based platforms in that we have in-house expertise that is constantly monitoring SREC markets, communicating with SREC buyers (utilities and energy suppliers) and achieving the highest sales prices available for our customers by selling bundles of SRECs on the spot market. Using an aggregation approach instead of selling SRECs individually, we often secure higher spot prices than competitors.

Please see below for our most recent spot market clear prices for SRECs generated in compliance years 2012 and 2013. Our next clear prices will be posted after the Q4 payment cycle, which is at the end of February and encompasses all generation between October and December for PJM customers and July to September for Massachusetts system owners.

2013 Compliance Year SRECs

2012 Compliance Year SRECs

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Georgia Power 210 MW Voluntary Procurement Program Approved

http://www.georgiapower.com/

GA Power alters the solar space in Georgia

On Tuesday, November 20, 2012 the Georgia Public Service Commission (PSC) approved Georgia Power’s Advanced Solar Initiative (GPASI), a plan to add 210 MW to the utility’s solar portfolio over the next two years.  Each year, the company will acquire 60 MW of projects between 1-20 MW through a competitive Request for Proposal (RFP) program.  An additional 90 MW, or 45 MW per year, will be acquired under a Distributed Scale Program for small-to-medium scale projects of 1 kW to 1MW, as early as Q1 of 2013.  Eligible projects will be considered in 2013 and 2014 and must be commercially operational by 2015 through 2016.  Georgia Power has 5.4 MW of solar through its subscriber based Green Energy program, and has acquired 49 MW through its 2015 Large Scale Solar program.

In the past, Georgia Power’s parent, Southern Company, has teamed up with Turner Renewable Energy and invested in commercial-scale solar projects in the Southwest.  However, within Georgia, solar investment has been minimal.  But now that technological advances and other factors have brought down the price of solar, the company is ready to enter the solar market on a more local level.

Because the RFP will feature competitive, bid-in pricing instead of pre-determined, set pricing, it is not clear to what extent the measure will create a vibrant commercial solar market in Georgia.  However, the 20MW and 1MW maximum system size limits guarantee small and medium-scale developers and projects will have a chance to compete.

While this is a big step in the right direction, other stakeholders are leading efforts to expand regulations even further to accommodate solar development.  Currently, solar companies can install solar power, but they must sell the electricity produced to Georgia Power.  Georgia’s Territorial Electric Service Act gives utilities exclusive territorial boundaries to provide electricity.  Moreover, Georgia Public Service Commission has been reluctant to include solar in its energy mix requirements because they view it as an “intermittent resource.”

Georgia Solar Utilities (GaSU), a solar start-up in Macon, GA, plans on directly challenging the status quo through the Georgia legislature in 2013. GaSU has asked the Georgia legislature to grant them the same privileges as Georgia Power in the solar space.  As of Tuesday, November 20th, the Georgia Public Service Commission voted 3-2 to allow new solar companies to sell solar power. In order for such a change to take effect, GA state law would have to be revised.

Regardless of the outcome of the challenge, Georgia Powers’ goal of developing 210 MW over the next two years gives it ownership of the largest voluntarily developed solar portfolio from an investor-owned utility.  Sol Systems will continue tracking this program and finding out more information about opportunities for solar developers.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Sol Systems Expands and Welcomes Jonathan Silver, Ed Feo, and Stephanie Smith

Sol Systems has announced the addition of Jonathan Silver and Ed Feo to its Board of Advisors, and is proud to welcome Stephanie Smith as General Counsel and Executive Vice President for Operations.  Mr. Silver and Mr. Feo are among the best known investors in renewable energy in the United States, and bring considerable project finance, fund management, private equity, venture capital, and relevant technology expertise to the company.  Stephanie Smith is a highly respected renewable energy and project finance attorney that has been involved in the solar industry for the last eight years.

 

“We are incredibly fortunate to be able to attract talent like Jonathan and Ed to our Board,” said Yuri Horwitz, CEO of Sol Systems. ”Their decades of experience and recognized thought leadership in the clean energy sector will be immensely helpful to the company as we grow”.

Mr. Silver joins the Sol Systems Board of Advisors following an extensive career in renewable energy investment and venture and private equity investing. Mr. Silver headed the federal government’s investments in clean and renewable energy and, in that role, led investments of more than $40 billion dollars across a wide array of wind, solar, geothermal, biofuels and nuclear projects. Mr. Silver also led the government’s multi-billion dollar investments in electric vehicles and advanced automotive technology. Earlier, Mr.Silver co-founded Core Capital Partners, a leading venture capital firm and was the Chief Operating Officer of Tiger Management, then one of the nation’s largest hedge funds. Mr. Silver is currently a Senior Distinguished Fellow at Third Way, a think tank in Washington, DC.

Mr. Feo is the Managing Director of USRG Renewable Finance, the nation’s largest, pure play private equity firm for renewable power, biofuels and clean technology infrastructure projects. He is a thought leader in the renewable energy space, and his participation on the Board brings a distinguished voice with real world experience in the renewable space, and an expansive and valuable perspective on the overall market as Sol continues to expand its footprint in solar and beyond. Prior to joining USRG, Mr. Feo spearheaded one of the first law firm practice groups devoted to renewable energy, and closed more than $35 billion in renewable energy transactions in the last decade.

Ms. Smith joined the company as General Counsel in mid-November. Prior to joining Sol Systems, Ms. Smith was a Senior Associate at Cooley LLP, where she focused her practice on the renewable energy sector and gained extensive experience with project development and project finance transactions. She primarily represented development companies who develop and construct wind, solar, biofuels, and biomass projects. Ms. Smith was included in the elite group of attorneys recognized in the 2012 BTI Client Service All-Stars Team. She will be leading Sol Systems legal team, as well as taking responsibility for the company’s fast expanding business operations and playing a critical role in the strategic development of the Sol team.

“We are excited and proud to have Stephanie,” noted Yuri. “To an individual, we are passionate about this industry, and this passion drives a commitment to transform it into an impactful, strong and stable force that helps create a more sustainable future for us all. Stephanie absolutely shares that vision, and brings the highest level of professionalism, focus, and strategic insight into all that she does.”

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

November Solar Project Finance Statistics

Every month, Sol Systems distributes a newsletter, the SolMarket Project Finance Journal, to our community of solar developers and investors. The journal features solar finance statistics, trends, industry news, and information about SREC markets that we garner from our relationships and experience aggregating SRECs and financing commercial and utility scale solar projects via SolMarket.

We have included excerpts from our November SolMarket 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 for which you are seeking financing, please contact the SolMarket team at info@solmarket.com. We would love to hear from you.

Project Finance Statistics

Characteristics of “Hot Projects” on SolMarket

Capacity: 149 kW – 5,000 kW

Average capacity: 1,586 kW

Average (all-in) costs:  We’ve seen a continued fall in EPC costs.  Where costs used to be at $2.75-$3.00, we are now seeing costs of $2.25 to $2.50 – or even as low as $2.10. These decreases will be increasingly necessary as local incentive programs and SREC prices continue to fall.

Locations: DE, IN, MA, NC, NJ, NY, RI

PPA rates:

DE:  9.9 cents/ kWh (20 year term; 1.365% escalator)

MA: 8.9 cents/ kWh (20 year term; 1.375% escalator)

FIT rates:

FL: 29 cents/ kWh (20 year term; no escalator)

NY: Feed-in tariff 22 cents/ kWh (20-year term, no escalator)

RI: Feed-in tariff 32.4 cents/ kWh (15 year term; no escalator)

Characteristics of Recently Funded Projects

Capacity: 98 kW – 12,000 kW
Average capacity:  1149 kW
Locations:  AZ, CA, CO, DE, GA, MD, MA, NJ, NC, OH, PA, TN, TX

Trends and Observations

What Makes a Good Solar Portfolio?

Major advances in the U.S. solar industry came when early developers began aggregating projects into portfolios for investors. Specifically, some of the more successful developers identified big box retailers with multiple locations that would “go solar,” and they would group those projects together for investors. This made investing in solar more efficient because investors only needed to underwrite a single host. Because of due diligence expenses, many project investors have historically stated that they are only interested in individual projects over 1 MW, although with homogeneous project portfolios, gross profits are typically sufficient to justify the expenses – even if the individual projects within the portfolio are 500 kW or smaller.  Unfortunately, many multi-location, credit-worthy hosts, in strong solar markets (who want solar) have been identified; so, developers have been left to seek out smaller, independent hosts, which is more time consuming for the developer and less appealing for investors.

In response, we have seen some developers attempt to group heterogeneous projects together into portfolios. While these portfolios are generally larger than 1 MW, they are comprised of different hosts and locations, and they have very different cost structures and IRRs.  Because the projects are so unique, investors must perform due diligence on all of them independently, and thus they face the same large expenses as though the projects were independent – making the portfolio financially unattractive.

Here at Sol Systems, we are working on solutions to address this.  If you have portfolios of projects that are in need of financing, we encourage you to set up a call with our team to discuss further.  Our solutions aim to reduce diligence and transaction costs for all parties involved, thereby making access to capital more competitive.  Particularly, Sol Systems is currently seeking projects that have applied to or have been awarded LIPA FIT contracts.  If you have received an award or are on the waitlist, please let us know.  We would love to talk to you.

How long does it take to go from identifying an interested investor to financial close?

Even after achieving major project development milestones such as finding an investor and executing a term sheet with price and basic commercial terms, it generally takes longer than everyone expects to achieve financial close.  The fastest timelines can be as short as 2-4 weeks, but more often, it takes several months – or longer to officially close.  Long closing timelines can be attributed to a variety of reasons; the most significant is allowing the attorneys to review and amend all necessary documents.  However, we have also seen delays due to clauses in a lease or PPA agreement that must be amended or renegotiated, which can result in a new ask in terms of pricing or fee.

SREC Roundup

SREC Price Increases

Sol Systems did not increase pricing for any fixed price strips this month.

SREC Price Decreases

Sol Systems decreased pricing for 3 and 5-year strips in Maryland due to limited bids for spot market transactions and long term strips, as well as an expected oversupply for the remainder of 2012. Sol Systems also decreased pricing for long term strips in Pennsylvania, as well as our 10-year in Massachusetts, due to an oversupply of SRECs.

SREC Markets with flat prices

Thanks to relatively stable market conditions, SREC pricing remained unchanged in November in both Ohio and Washington DC.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solarinstallers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

The Solar REIT to Soon Shift from Concept to Reality

Earlier this year, Sol Systems provided an overview of solar real-estate investment trusts or S-REITs. This post gives an update on the status of S-REITs as the IRS may soon issue a ruling that would allow the creation of a new asset class for solar photovoltaics (PVs) and open the floor for investors to utilize the REIT finance mechanism for solar project investments. The IRS is expected to respond to a private ruling request made in September by the end of this year, potentially lighting the way for a definite ruling on S-REITs and the opening of a new investment market for solar.

Investing in solar can generate compelling profits; however, for small investors interested in buying shares in solar, the only feasible way to do so currently is to invest in solar manufacturers. Currently, private equity investors dominate direct investment in solar projects mainly because they are capable of monetizing the tax benefits that accompany such deals. Tax credit investors are crucial for financing solar projects of nearly any size, but the difficulty in finding those investors and the transaction costs involved in the deal leave a large gap between demand for solar projects, and the capacity of actual projects getting built. Solar REITs (S-REITs) would open up a new investment method that would allow individuals and institutions to invest in a piece or pieces of utility scale solar projects in the same way that they would invest in mutual funds, thanks to REITs’ tradable nature. Reflecting increasing interest in green energy in the face of growing concerns about climate change and extreme weather events, the S-REIT will give individuals the opportunity to participate in the renewable energy market.

In an exciting development, the Renewable Energy Trust Capital, Inc. (RET) made public in September its request for a private letter ruling to the IRS regarding S-REITS. Such a ruling addresses only the case of the taxpayer that made the request, though it can be read as an indication of how the tax code should be interpreted. Although the RET request will be binding only between the RET and the IRS, a private letter ruling often holds precedence to future tax cases since revenue rulings, which are applicable to all taxpayers when issued by the IRS, are often based on previous private letter rulings. It is also possible that there are other S-REIT ruling requests that have already been filed, since a private letter ruling can only be public knowledge if the requesting taxpayer decides to announce it.

As was mentioned in Sol System’s earlier S-REIT blog post, the National Renewable Energy Laboratory (NREL) released a report in June 2012 that concluded that PVs meet many important criteria that fit the definition of “property” per the REIT qualification requirement. The significance of NREL issuing this report is an indication of government interest in the technical specifications that validate S-REITs, an interest that could potentially lead to a future revenue ruling. In the past the IRS has extended the definition of real property for REIT purposes to include other assets like billboards and refrigeration systems that are technically removable but were nevertheless judged to be permanent property. This broad definition application could be used to justify the classification of PVs as permanent property.

Ultimately, the NREL report, coupled with the IRS’s historical REIT asset approval pattern, are indicators of a favorable ruling response from the IRS regarding S-REITs. Sol Systems will continue to monitor the development of a potential S-REIT market and its implications for the current model of investment in commercial solar projects.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com or www.solmarket.com

Share

Mount St. Mary’s Solar Farm Will Not Affect MD SREC Market Stability According to Letter Issued by MEA

The Maryland Energy Administration (MEA) issued a letter earlier today addressing the concerns surrounding the State’s approach to managing the SRECs related to the recently built Mount St. Mary’s (MSM) 17.4 MW solar farm.  With 75 MW of installed capacity already in Maryland, and the expectation that the state will surpass its 100 MW mark before the end of the year, many in the Maryland solar industry have raised concerns regarding the effect these SRECs will have on future SREC prices in the state.

The Mount St. Mary’s 17.4 MW solar farm, which was completed in August of this year, is Maryland’s largest solar facility. This project was financed through a 20 year commitment by the State of Maryland, through the Department of General Services (DGS), and the University System of Maryland (USM) to purchase both the energy and the SRECs generated from this project. The DGS is responsible for two-thirds, or 10.67 MW, of electricity and SRECs produced and USM is responsible for one-third, or 5.33 MW, of electricity and SRECs produced.

In the letter, Abigail Ross Hopper, Acting Director of the MEA, outlines DGS and USM’s SREC management plans. The SREC management plans will differ slightly between DGS and USM, considering they each have different drivers that will affect the management of SRECs for which they are responsible. The DGS plans to “act as an SREC ‘provider of last resort’ whereby the State will sell excess SRECs only if the SREC market needs them.” The MEA has recommended that DGS establish a price floor, for example 90% of the ACP, for the sale of these excess SRECs in order to maintain some level of price stability. USM will use the SRECs generated from their 5.33 MW share to meet their “future RPS requirements, voluntary carbon reductions, and/or potential future utility budget shortfalls.” Because the SRECs from the MSM project represent a significant share of the market in 2013 and 2014, USM also does not intend to sell any SRECs in those compliance years in order to prevent market instability from the SREC oversupply that is expected during those years.

This letter brings some relief to those concerned about the future of Maryland’s SREC market and the management of the SRECs produced from the Mount St. Mary’s project, in particular. Based on Sol Systems’ model, the SREC market in Maryland will remain oversupplied for the 2012 compliance year; however, compliance years 2013 through 2015 are expected to be undersupplied if the future growth rate mirrors the historical growth rate.  Sol Systems will continue to monitor the Maryland SREC market and track any future legislation.  Please visit our blog for further updates.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com or www.solmarket.com

Share

Top Names in Solar Industry Tackle Tax Equity Investing, Distributed Generation, and Mainstreaming Solar Power

By Josh Garrett for Sol Systems

Ahead of MDV SEIA’s conference “Solar Energy Focus 2012: Developing and Financing Solar on the East Coast,” Sol Systems asked a sampling of conference speakers for previews of their thoughts and remarks. Among other topics, speakers discussed tax equity investment and the challenges it presents, the advantages of distributed generation, and solar energy moving out of the “alternative” category and into the mainstream energy mix. Below are highlights from conversations with two conference speakers.

The U.S. solar industry has made important advancements in recent years, entering new regional markets and vastly improving its competitiveness with conventional power. Richard Moore, the Head of Strategy and Business Development at Washington Gas, believes it’s time to make those advancements part of the industry’s public image. “The solar industry needs to avoid painting itself into a ‘green’ corner,” he explains. “Solar needs to be just ‘another’ energy source, not an ‘alternative’ energy source,” he says. The challenge, Moore states, is showing the public that solar can compete with other energy sources on production levels, durability, and maintenance costs. Moore believes that, in the end, it all comes down to price. In his view, a potential solar customer is simply “a person who wants reliable energy at a reasonable price.” Which is great news for the industry because, as Moore points out, “that describes most of the population.”

To help shift solar into the mainstream energy conversation, Moore thinks the industry needs to more quickly eliminate its reliance on government subsidies. In his view, there is no way to predict or hedge against the constantly changing political trends that could lead to sudden changes in policies that support the industry. That said, solar needs to be proactive in shaping energy legislation, says Moore. He speculates progress can be made on this front by stepping up direct lobbying efforts, but believes that grassroots endeavors would be the most effective. “In our world of electronic communication and social media,” he says, “there are so many ways for citizens to directly influence policy.”

When it comes to the nuts and bolts of expanding the solar industry in the U.S., Moore is a believer in distributed generation in the residential sector. He sees the location of energy generation close to points of consumption as ideal. “Residential distributed generation offers predictable, often lower pricing; enhanced reliability; more control over generation units; and environmental benefits,” he explains. “By bringing all of these benefits together, distributed generation meets the requirements of our consumers,” he continues. “And those requirements need to be met, first and foremost, in order to meet the needs of investors, installers or other participants in the market.”

Turning to the subject of financing for solar projects, Moore offers his take on tax equity investing, which has taken on enhanced significance in the solar industry following the expiration of the federal 1603 grant program. He suggests making it easier for investors outside the renewable energy space to put their tax equity into solar projects by allowing them to invest without learning all of the financial and technical details associated with solar deals. More importantly, Moore believes that the industry should be devoting resources to making tax equity investing a part of the equation rather than the driving force. “If you need to choose between spending time and effort on achieving grid parity and spending time on developing new ways to structure tax equity and incentive funding, it makes a lot of sense to focus on grid parity,” he argues. “Ultimately, this is where the future of the industry resides.”

In the estimation of Zach Axelrod, CEO of solar thermal company Skyline Innovations, tax equity investing is shaping the future of the industry. “There are only 15 to 20 tax equity players,” he says, “not nearly enough to match the number of solar developers in the U.S. Because of this supply/demand imbalance, the investors hold the power. I think this will lead to consolidation in the industry—the number of developers will shrink to get closer to the number of tax equity investors,” he predicts.

Like Mr. Moore, Axelrod sees promise for expansion of solar in the residential sector, though for different reasons. Axelrod enjoys the accessibility to decision-makers afforded by residential projects. “In commercial and utility projects, the decision-maker is known, but often difficult to reach, and competition for his or her time and interest tends to be stiff,” he explains. But Axelrod sees pros and cons of solar projects in all three sectors: residential, commercial, and utility, calling none of them the “perfect target” for solar developers.

Overall, Alexrod takes an optimistic view of today’s U.S. solar industry. He acknowledges that the industry must still overcome significant obstacles, most importantly achieving and/or maintaining profitability while it grows. In his view, solar is here to stay. “You couldn’t say that five or ten years ago,” he elaborates. “Right now, even if all solar incentives were to disappear tomorrow, projects would continue to be planned and built. Market participants will come and go, but solar will not disappear. This is a relatively new development, and one that’s good for the world.”

About the Solar Energy Focus 2012 Conference

Sol Systems is proud to be sponsoring the Solar Energy Focus 2012 conference which will host 50+ speakers, 12 breakout sessions, 350+ business leaders, investors, legal experts, developers and policy-makers. The conference will take place on November 28, 2012 at the Marriott at Metro Center in Washington, DC.  To register for the conference, please visit www.solarenergyfocusconference.com.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com or www.solmarket.com

Solar Opportunities in Maryland, D.C., and Virginia

By Josh Garrett for Sol Systems

In preparation for the MDV-SEIA Conference in Washington DC on November 28, we will be previewing some issues and trends to be addressed at the conference. This blog is a brief examination of the solar market conditions in Maryland, Virginia, and Washington, D.C.

In today’s highly fragmented U.S. solar market, regional solar energy incentives run the gamut from highly supportive to non-existent. In the mid-Atlantic region, we have seen fairly strong support for growth, but the level of support certainly varies from state to state. Both DC and Maryland have encouraged the solar renewable energy credit (SREC) market by increasing the SREC requirements. DC has also introduced new pieces of legislation that would provide additional incentives to push DC residents towards solar. Meanwhile, Virginia is creating new incentive programs.  Below, we  provide an overview of policy and SREC market conditions in Maryland, Virginia, and Washington D.C. as a way to explore the overall prospects of each state’s solar industry.

Maryland

Over the last year, the Maryland legislature has proven its support of solar. It remains to be seen the impact the Maryland legislature will have on solar in 2013; however, previous legislation encourages a promising outlook.

Policy: The Maryland legislature showed continued support for solar in 2012, when Governor Martin O’Malley signed the Renewable Energy Portfolio Standard for Solar Energy and Solar Water Heating Systems Bill (SB 791 and HB 1187) into law. This legislation amended Maryland’s existing renewable portfolio standard (RPS) for solar generation, requiring 2% of the state’s power to come from solar by 2020 instead of 2022. To meet the accelerated schedule, Maryland’s Renewable Portfolio Standard will increase beginning in compliance year 2013 and continue through 2020. The period of greatest demand growth from the RPS is anticipated to be 2016 through 2020. While the new law will have a significant impact on the Maryland solar market over the next eight years, the Maryland legislature has not introduced any further legislation to incentivize the solar market.

SREC Market: Considering the lack of introduced legislation and the oversupply that existed in the 2012 MD SREC market, prices for vintage 2012 SRECs in Maryland have declined year-to-date by 2%, with bids at approximately $160 per SREC and offers at about $185.  However, the volume of trading in SRECs at these price levels is limited. Trading of 2013 SRECs is taking place at higher prices, around $215 per credit, most likely as a result of the boost to the solar RPS requirement in May 2012.  This legislation will truly begin to show its impact starting in 2013.  Sol Systems’ analysis and modeling shows that 2012 will see an oversupply of SRECs, but that 2013-2015 will shift toward undersupply.

Virginia

For a state without its own SREC market, Virginia has begun to show more support for solar over this past year; however, it is important to note that Virginia is reliant on the SREC market in Pennsylvania, thus legislation in Pennsylvania will continue to have an impact on the Virginia solar market.

Policy (in the state of Virginia): Currently, most Virginia utilities meet their RPS mandates by purchasing RECs from existing facilities, leaving little to no room for creating new solar jobs and expanding solar capacity in the state. However, the State Corporation Commission of Virginia is currently considering two solar energy programs proposed by Dominion Virginia Power that seek to expand solar capacity within the state. The first program would allow the utility to directly finance new solar installations totaling 30 MW of capacity on large rooftops inside the Commonwealth. The second program is a residential solar purchasing plan capped at 3 MW of capacity, which has been dubbed a “demonstration program.” These programs will look to expand solar outside of the mandated RPS requirements to create an additional incentive for VA system owners to go solar.

Policy (in the state of Pennsylvania): Many Virginia solar energy systems that are eligible to produce SRECs must sell into the Pennsylvania SREC market, as DC and Maryland recently closed their borders to out-of-state systems. These Virginia system owners could be affected by Pennsylvania’s Senate Solar Bill (SB 1350), a three-part bill that was introduced in the state legislature but has not yet reached committee consideration. The Solar Bill would increase the solar carve-out requirements in Pennsylvania’s Alternative Energy Portfolio Standard (AEPS) during compliance years 2013 through 2015, hold them steady from 2016 to 2019, and reduce the requirements in 2020 while extending the overall AEPS through 2025.  The bill would also raise the price of Alternative Compliance Payments (ACPs) to $285 per SREC during compliance years 2013 through 2019 before reducing solar ACPs by 2% per year thereafter. Finally, the Solar Bill would enable solar thermal facilities to qualify for SREC production. If carried forward into next year, the bill could combine with its counterpart introduced in the state House of Representatives in 2011 to promote changes to the AEPS and solar carve-out, which would in turn increase SREC prices in Pennsylvania.

Pennsylvania SREC Market: Considering that most SRECs from Virginia can only be sold into Pennsylvania, it is important to note for Virginia system owners that SREC prices are in the midst of a steady decline in the Commonwealth of Pennsylvania, with bids currently at $23 per credit. Offers for SRECs in Pennsylvania are at approximately $27 per credit, with most volume trading around $26 per credit.  Expectations are that the market will be four times oversupplied (though that estimate does not take into account SRECs that will be retired in neighboring states). Unlike DC and Maryland, the Pennsylvania SREC market may continue to decrease if legislative action is not taken.

Washington, D.C.

With the passage of legislation in late 2011 to increase the RPS and solar requirement, DC set a high bar for solar growth.

Policy: To support solar growth, the DC Council introduced two new solar bills in 2012. The DC Council is currently considering the Community Renewable Energy Act of 2012 (B19-715), which was introduced in March 2012. The bill expands the accessibility of solar energy for D.C. residents by establishing Community Generation Facilities and enabling virtual net metering protocols. If passed, residents could invest in a solar facility in their community and reap the energy savings in proportion to their investment through virtual net metering performed by their electric utility.

In addition, the Council approved the Energy Innovation and Savings Amendment Act (B19-0749), known as the Property Tax Exemption bill, in a first vote on November 1, 2012. If enacted, the new law would exempt solar energy systems from the District’s personal property tax, reducing the tax burden on solar energy systems and further incentivizing the construction of solar energy projects. The bill will potentially require one or two additional approvals from the Council before proceeding to the Mayor for final approval. As we look into the start of 2013, it seems DC will remain a strong market for solar.

SREC Market: The positive effects of the 2011 legislation to increase the solar requirement began to ring true in 2012. With energy suppliers focusing on meeting compliance targets at the end of 2012, prices for SRECs started to climb at a steady rate of 5% per month. As of this month, 2012 SREC bids were consistently above $300 per SREC. The Legislation passed in 2011 will take effect starting in 2013 by increasing the District’s RPS while disallowing SRECs from out-of-district systems (those that were not approved before 2012). We expect those changes to drive 2013 SREC prices even higher with the anticipation of a significant oversupply of SRECs in 2013-2014.

The policy frameworks and market opportunities in Maryland, Washington, D.C., and Virginia present an accurate analogy for state and regional markets across the U.S.: on one hand, there are states that offer strong incentives which are expected to endure for several years; on the other, there are places that offer little to no incentives for solar power and are not home to any SREC markets. An in-depth discussion on the Maryland, Virginia, and Washington DC solar markets will occur at next week’s MDV SEIA conference when the region’s largest solar players come together to discuss the specific challenges and opportunities that the region offers.

About Solar Energy Focus 2012

Sol Systems is proud to be sponsoring the Solar Energy Focus 2012 conference which will host 50+ speakers, 12 breakout sessions, 350+ business leaders, investors, legal experts, developers and policy-makers. The conference will take place on November 28, 2012 at the Marriott at Metro Center in Washington, DC.  To register for the conference, please visit www.solarenergyfocusconference.com.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com or www.solmarket.com.

Solar Industry Leaders to Speak on Solar Evangelism, Lower Costs, & Industry Consolidation

By Josh Garrett on behalf of Sol Systems


Ahead of MDV SEIA’s conference “Solar Energy Focus 2012: Developing and Financing Solar on the East Coast,” Sol Systems asked a sampling of conference speakers for previews of their thoughts and remarks. Topics of discussion ranged from the state of tax equity investing to the implications of a second Obama term. Below are highlights from discussions with three of the conference speakers.

Jigar Shah is calling for all-out solar evangelism. “The people working in the U.S. solar industry, from installers to financiers, need to educate their friends and family members,” he says. “Remember that cartoon character Hank Hill?  He sold propane, and loved talking about propane with anyone who would listen. The solar industry needs more Hank Hills.”

It’s a good bet that Shah’s exhortation to spread the gospel of solar will come up in his remarks at the conference. Jigar Shah’s impressive resume in the solar industry stretches back to his founding SunEdison in 2003 when Shah pioneered the use of power purchase agreements (PPAs) to cut up-front costs of solar energy systems to zero. He is currently a partner at clean energy investment fund Inerjys, CEO of Jigar Shah Consulting, and a board member at Richard Branson’s Carbon War Room.

According to Shah, the single largest barrier to the solar industry’s success in the next five years is a lack of awareness. He believes that the American public just doesn’t know enough about the rapid expansion of the solar industry and all the benefits it can bring to local communities, from job creation to lowering residential utility bills. “Until the 115,000 people in the solar industry and their spouses start evangelizing solar on social media and at dinner parties, we won’t lose the negative publicity that we saw during the presidential campaign,” he declares.

Despite his emphasis on a need for more aggressive outreach and promotion from the grassroots of the American solar industry, Shah is quick to tout its successes in recent years. He points out that solar is the only generation source that offers locked-in prices over the long term, and that solar power is now cost-competitive with conventional power in over half of the country.

Looking forward, Shah says that he sees PPA-supported commercial projects having the highest potential for growth and profit over the next few years, considering the tough competition for utility-scale projects and high soft costs associated with residential installations.

But for Shah, it all comes back to spreading the good word. “After Hurricane Sandy and the damage it did to power grids, there were calls for more local energy sources. People need to know that the solar industry is bringing local energy to communities around the country right now.” With the conviction of a true believer, Shah lays down his bottom line: “We’re no longer emerging. We’re here.”

Stefan Linder, a Clean Energy Analyst at Bloomberg New Energy Finance, agrees that the U.S. solar industry needs to get its message out. But Linder believes that the message should be focused on cost savings for consumers. “A solar lease or PPA payment 15% or more below retail electricity rates is what entices people to go solar,” he says. “And solar can offer those prices in many parts of the country.” According to Linder, that’s the message solar retailers need to send to potential customers.  But what about all the bad press the solar industry received during election season? “Now that it’s over, no one will waste money advertising against solar,” he predicts. “By the time the next election comes around, most people will have completely forgotten about Solyndra.”

Linder expects growth in each segment of the industry. For utility-scale projects, “falling system costs make large-scale solar an increasingly attractive option for utilities to meet renewable mandates.” Residential deals benefit from standardized contracts, he says, and when bundled, these leases or PPAs may be able to attract lower-cost financing. The leases and PPAs associated with commercial projects require more customization, making it difficult to bundle and fund projects.

But there is another, bigger trend that Linder sees on the horizon of the U.S. solar industry: consolidation. Tax equity is fast becoming a necessity in the solar market, he posits, and the market is currently shifting to favor large players capable of raising money from tax equity investors. Linder acknowledges that the expected uptick in mergers and acquisitions won’t benefit everyone in the industry, but, he adds, “Consolidation makes for a more efficient market.”

For Andrew Krulewitz, Solar Analyst at GTM Research and editor of PVNews, the trend to watch is third party ownership of solar assets. “In the first quarter of 2009, third party ownership was part of about 10 percent of residential projects in California,” Krulewitz says. “Today, that share has jumped to 75 percent, and in some other markets it’s more than 90 percent,” he explains. What does the swing toward third-party projects mean for the future of the industry? That’s a question that deserves serious attention and discussion at the MDV-SEIA conference, he says. “Are third party entities just competition for direct installers,” he asks, “or is this a new market segment that will help expand the solar market?”

More broadly, Krulewitz sees a robust and diverse American solar industry. He notes that there is a healthy mix of different business models, ranging from the vertically integrated Solar City to Vivint Solar’s tapping into its existing base of home security and home technology customers. According to Krulewitz, innovative business models combined with the support of the federal investor tax credit (ITC) leave no doubt that the solar industry in the U.S. will continue to grow through 2017. “Equipment prices are falling, efficiency is increasing, and service companies have streamlined processes,” Krulewitz says. “That’s made for solar competing with conventional electric rates in some states.” Here Krulewitz seems to be posing the same rhetorical question put forth by Mr. Linder: who can say “no” to cheaper electricity?

 

About the Solar Energy Focus 2012 Conference

Sol Systems is proud to be sponsoring the Solar Energy Focus 2012 conference which will host 50+ speakers, 12 breakout sessions, 350+ business leaders, investors, legal experts, developers and policy-makers. The conference will take place on November 28, 2012 at the Marriott at Metro Center in Washington, DC.  To register for the conference, please visit www.solarenergyfocusconference.com.

About Sol Systems
Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com or www.solmarket.com
.

Victoria Ngare

President & CEO of Sol Systems Yuri Horwitz speaks at the Fourth Annual MIT Energy Finance Forum

MIT Energy Finance Forum 2012

This past Friday, November 16, President and CEO of Sol Systems, Yuri Horwitz participated in the Financing Solar Energy panel at the Fourth Annual MIT Energy Finance Forum. Other panelists included, Tim Dee (Managing Director, Bank of America), Nikhil Garg (Vice President, Coral Capital), Ken Standlin (President, Kenergy Solar), and moderator Mark Kaplin (Partner – Regulatory and Government Affairs, WilmerHale). As the principal energy conference of the MIT Sloan School of Management, this annual event brings together key renewable energy executives to discuss the paramount issues the industry faces. This year’s theme was, New Realities, New Opportunities: the recent evolution of the energy and power sector, with a specific focus on the impact that natural gas prices have had on the energy landscape.

The Financing Solar Energy panel focused on the evolution of the energy industry with respect to decreased costs in manufacturing and increases in technological efficiency. Most importantly, the panelists discussed the implications of these developments on acquiring solar financing for new technology. Conversations such as these continue to be extremely valuable as solar project financing mechanisms increase in variety and complexity. For more information about how Sol Systems can help you navigate the solar project finance landscape, please visit www.SolMarket.com.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Victoria Ngare

Sol Systems’ CEO Yuri Horwitz speaks on Tax Equity Opportunities at the Novogradac Financing Renewable Energy Conference

Sol Systems' CEO Yuri Horwitz and fellow panelists at the Novogradac Financing Renewable Energy Conference

Sol Systems co-sponsored and spoke at Novogradac’s Financing Renewable Energy Conference this week in Washington, DC.

On Thursday, Sol Systems’ CEO Yuri Horwitz joined  other renewable energy finance experts on the Tax Equity Opportunities panel. Moderated by Eli Katz (Chadbourne & Park LLP), the panel also featured Mit Buchanan (JP Morgan Capital Corporation), Ann Hardy (De Lage Landen Financial Services) and Darren Von’t Hof (US Bank). With the expiration of 1603, tax equity will become increasingly important to the solar industry, and the panelists focused on the size, nature and current state of the tax equity market for renewables. In addition to co-sponsoring and speaking at the Novogradac conference, Sol Systems has recently published several articles on tax equity and solar project finance in the Novogaradac Journal of Tax Credits.

As the dynamic arena of renewable energy finance continues to evolve, the Financing Renewable Energy Conference promises to be insightful. Tax equity will only grow in importance as a vehicle for bringing solar projects from conception to completion. Any investors or developers with questions on tax equity can call the SolMarket team at 888-235-1538 x2 or info@solmarket.com.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com or www.solmarket.com
.

Anna Noucas

Pennsylvania Senate Introduces Solar Bill to Affect Change in Declining SREC Market

In August 2012, Senator Dave Argall (R-29), of the Pennsylvania State Senate, introduced legislation to spur change to the state’s declining solar renewable energy credit (“SREC“) market. This bill has been introduced in response to the lack of movement on a similar House Solar Bill introduced in 2011. The House Solar Bill (HB 1580) has remained stalled in Committee for the last 10 months with no signs of further action. With the latest introduction of the Senate Solar Bill (SB 1350), the hope is that SB 1350 will provide a countering force to the stalled HB 1580. If further considered, both of these bills would provide further momentum and leverage toward adjusting Pennsylvania’s Alternative Energy Portfolio Standard (“AEPS“) and solar carve-out.

In the meantime, the Pennsylvania SREC market continues to steadily decline as the supply increases at a faster rate than the demand. The market remains four times oversupplied with a current supply of 295,228 SRECs and a current demand of only 75,544 SRECs. This oversupply has driven down SREC prices to levels around $25 – $28/SREC. The legislation introduced to the Senate Consumer Protection & Professional Licensure Committee aims to increase the demand such that SREC prices begin to stabilize with a limited to no cost to the ratepayer over time. Stabilization in the SREC market will have a positive influence on the Pennsylvania solar industry by spurring installations, while also ensuring the security of clean energy jobs in the state.

To create a positive impact, SB 1350 includes the following changes and/or provisions to the original PA AEPS:

  • Increase the AEPS solar carve-out requirements starting with compliance year 2013 through 2015, keep the AEPS solar carve-out requirements the same from 2016 through 2019, and then decrease the AEPS solar carve-out requirements in 2020 and extend the AEPS through 2025. (See Table 1 for reference)
  • Change the alternative compliance payment (“ACP“) to $285/SREC for compliance year 2013 through 2019, then reduce the ACP by 2% each subsequent reporting period.
  • Allow for solar thermal facilities to qualify.

Table 1. Current vs. Proposed Requirement for the PA AEPS Solar Carve-Out

SB 1350 provides for an increase in the solar carve-out from 2013 - 2015, followed by a decrease in the solar carve-out in 2020. This proposed change aims to stabilize the market with a limited to no cost to the ratepayer.

Previous versions of the Senate Bill included language to close the market to out-of-state systems. Closing the borders to out-of-state systems, as recently done in DC and Maryland, would potentially have the greatest impact on the oversupply currently in Pennsylvania. Unfortunately, this language also received some of the most significant opposition when HB 1580 was first introduced. Subsequently, despite the positive effects that this could have on an oversupplied market, SB 1350 does not include any provisions to close the borders to out-of-state systems.

As stated above, SB 1350 was introduced to the Pennsylvania State Senate on August 14, 2012 and then referred to the Senate Consumer Protection & Professional Licensure Committee. No further action has been made a Committee Hearing has not been scheduled. Sol Systems will continue to track the progress of both pieces of legislation. Please visit our blog for further updates.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

Solar Gets Down to Business at Solar Energy Focus 2012

MDV-SEIA’s Solar Energy Focus 2012 Conference, Developing and Financing Solar on the East Coast, is returning to Washington, D.C. This year, like last, will bring together hundreds of business leaders, investors, developers, legal experts and key policy makers together in D.C. to discuss and resolve the key issues for the solar industry at the Marriott at Metro Center November 27 and 28.

“More than ever, our Solar Energy Focus 2012 conference will serve industry players and newcomers to better understand today’s opportunities and threats affecting their businesses and constituencies,” said MDV-SEIA Executive Director Mary Ellen Curto.

MDV SEIA 6th Annual Solar Energy Focus Conference "Developing & Financing Solar on the East Coast" November 27 & 28, 2012

This year’s conference promises to be the most comprehensive and expansive event to date and features a packed schedule, filled with notable speakers and break out discussion sessions. Keynote speakers include former CIA Director and founder of the U.S. Energy Security Council R. James Woolsey, solar visionary and champion, Jigar Shah and former Virginia Governor Tim Kaine (invited).

Solar Energy Focus 2012 will cover opportunities in the Mid-Atlantic, creative financing solutions for SRECs, tax equity, leasing, post-election market scenarios, solar heating and cooling, new technology and industry trends and much more.

“After tremendous growth in the last four years, our industry continues to experience substantial change, particularly in the Mid-Atlantic. With the backdrop of a national election, this is a critical time to stay informed and make connections,” said MDV-SEIA President Rick Peters.

Register now for Solar Energy Focus 2012 at www.solarenergyfocusconference.com

Follow MDV-SEIA on Twitter @MDVSEIA #SEF2012

Like MDV-SEIA at facebook.com/mdv-seia

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com or www.solmarket.com.

Victoria Ngare

Sol Systems Welcomes New Hires

Sol Systems is proud to welcome Senior Associate Matthew Chou and two new Solar Analysts interns, Sahiba Chopra and Victoria Ngare to the Sol Systems team.

Matthew Chou – Senior Associate

Matthew Chou joins Sol Systems with over five years of experience in the energy and finance sectors. Most recently, he served as a senior financial consultant to the U.S. Department of Energy’s Loan Guarantee Program, where he helped secure loan financing for renewable energy projects with a combined transaction value of over $2 billion. Mr. Chou started his career in investment banking with Macquarie Capital in their utilities M&A team. Additionally, he spent a year working for a non-profit foundation as part of the ProInspire Fellowship Program. At Sol Systems, Mr. Chou works on developer outreach and project financing initiatives for SolMarket, Sol Systems’ project financing arm for commercial and utility-scale solar projects.

Mr. Chou graduated from the University of Pennsylvania in 2006 with a Bachelors of Science in Economics from the Wharton School and a Bachelor of Applied Science from the Engineering School.

Sahiba Chopra – Solar Analyst Intern

Sahiba Chopra joins Sol Systems after having worked at Solar Intech, a solar energy system provider, in India. At Solar Intech, Sahiba successfully managed the company’s first international export to South Africa. Before that, Ms. Chopra worked on a research project regarding the increasing vulnerability of farmers in South India as a result of global climate change. Prior to interning at Sol Systems, Sahiba was an intern at the Washington, DC chapter of the Sierra Club where she focused on energy efficiency. Ms. Chopra continues her work on the Sierra Club DC chapter’s Energy Committee as a  volunteer. At Sol Systems, Sahiba focuses on the company’s SREC operations. Through this internship, Sahiba looks forward to learning about the SREC market and solar project finance.

Ms. Chopra graduated in 2011 from the University of Maryland, College Park where she received a Bachelor of Arts in Economics and Mandarin Chinese.

Victoria Ngare – Solar Analyst Intern

Victoria Ngare joins Sol Systems during her senior year at Georgetown University School of Foreign Service. As a student in the Science Technology and International Affairs program, Victoria has an educational background in environmental science and policy. Victoria’s involvement on-campus includes work with Professor Timothy Beach on Ancient Maya agriculture, helping to coordinate the GU Famers’ Market and the GU Community Garden, as well as  writing for The Hoya, Georgetown University’s oldest student run newspaper. Off-campus she works at Patagonia, an outdoor clothing company that seeks to educate its customers on environmental issues and organizations. Driven by intellectual curiosity, Victoria’s main focus will be gaining knowledge about the solar industry, especially the dynamic area of renewable energy financing.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com or www.solmarket.com.