Posts Tagged ‘MD SREC’

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.

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.

Anna Noucas

Maryland General Assembly Passes Solar RPS Acceleration Bill

In an effort to take a firmer commitment towards a clean energy future, the Maryland Senate passed legislation (37-9) that will accelerate the requirement of 2% solar energy generation in Maryland by two years. As mentioned in a previous blog by Sol systems, SB791/HB1187 were drafted to address potential SREC market volatility caused by the design of the former Renewable Portfolio Standard. Termed by supporters as the Solar Jobs Bill, Maryland can expect over $3 billion in investments to the state, as well as the creation of over 10,000 jobs- volumes significantly higher than those of the previous RPS.

Sol Systems currently offers three types of SREC agreements for Maryland solar systems (both photovoltaic and solar thermal): Sol Brokerage, Sol Upfront, and Sol Annuity. Please email info@solsystemscompany.com or contact your solar installer for more specific pricing.

About Sol Systems
Sol Systems is a solar energy finance and development firm that was built on the principle that solar energy should be an economically viable energy solution. With thousands of customers and hundreds of partners throughout the United States, Sol Systems is the largest and oldest SREC aggregator. We provide homeowners, businesses, solar installers, and developers with sophisticated financing solutions that help make solar energy more affordable. Sol Systems also helps energy suppliers and utilities manage and meet their solar RPS requirements efficiently by providing them with access to diverse portfolios of SRECs. For more information, please visit http://www.solsystemscompany.com.

Anna Noucas

Maryland General Assembly on Track to Pass Legislation to Accelerate the State’s Solar RPS Requirement

Due to sun-setting Federal incentive programs for solar energy and the current structure of Maryland’s Renewable Portfolio Standard (RPS), Del. Sally Jameson (D-28) and Sen. Rob Garagiola (D-15) proposed legislation that attempts to address this concern. House Bill 1187 will accelerate the solar carve-out expecting utilities in Maryland to achieve the 2% solar energy generation requirement by 2020, instead of the current requirement of 2% by 2022.  The belief is that the current standard will create a glut, or oversupply, of SRECs due to a higher annual increase in solar energy after 2016. This could distort supply and demand of SRECs, thus making the market volatile and less predictable.  HB 1187 aims to provide stability to a potentially volatile market by “smoothing” out the growth of solar in Maryland.

HB 1187 does not increase the overall solar requirement for Maryland; rather it accelerates the achievement of 2% solar by two years (see chart below for comparison). Moreover, although from 2013-2020 there will be yearly increases in demand, as compared to the current requirements, the end goal and requirements for solar will not be affected.

Energy Year Current Requirements Proposed Requirements
2012 0.10% 0.10%
2013 0.20% 0.25%
2014 0.30% 0.35%
2015 0.40% 0.50%
2016 0.50% 0.70%
2017 0.55% 0.95%
2018 0.90% 1.40%
2019 1.20% 1.75%
2020 1.50% 2.00%
2021 1.85% 2.00%
2022 2.00% 2.00%

The estimated benefits of this acceleration could not only create a more stable market with a steadier roadmap of SREC prices, but will also extend into the Maryland economy as a whole. Based upon industry information, HB 1187 could create over 10,000 jobs across the Maryland economy by 2018. Industry predictions state that the legislation could incentivize over $3 billion in investment and $144 million in revenue for the State as a result of job creation.

What does this mean for the ratepayer? The legislation was designed with a 1% price impact on the customer. HB 1187 anticipates a residential compliance cost of $0.19 per month and an average commercial electrical bill increase of 0.11%.  However, the proposed RPS will actually create savings for the ratepayer when compared to the costs incurred from the current RPS schedule.

HB 1187 passed the House with unanimous support on March 21, 2012 and is currently proceeding through the Senate. After having initially failed the Senate Finance committee, SB 791 managed to pass through the committee 8-2 upon reconsideration during a vote late March 29, 2012. After a final lobbying effort by stakeholders and advocacy groups, SB 791 passed upon second reading in the Senate on April 2nd and will undergo its third reading tonight, April 4th, when it is likely to become law. Sol Systems will post an update as soon as more information is released on the status of the bill.

Sol Systems currently offers three types of SREC agreements for Maryland solar systems (both photovoltaic and solar thermal): Sol Brokerage, Sol Upfront, and Sol Annuity. Please email info@solsystemscompany.com or contact your solar installer for more specific pricing.

About Sol Systems
Sol Systems is a solar energy finance and development firm that was built on the principle that solar energy should be an economically viable energy solution. With thousands of customers and hundreds of partners throughout the United States, Sol Systems is the largest and oldest SREC aggregator. We provide homeowners, businesses, solar installers, and developers with sophisticated financing solutions that help make solar energy more affordable. Sol Systems also helps energy suppliers and utilities manage and meet their solar RPS requirements efficiently by providing them with access to diverse portfolios of SRECs. For more information, please visit http://www.solsystemscompany.com.