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.
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.
Sol Systems Issues Call for Solar Projects – New Project Finance Platform Now Has $400 Million in Available Funding
Sol Systems Issues Call for Solar Projects – New Project Finance Platform Now Has $400 Million in Available Funding
Washington, DC: September 14, 2011 – Less than two weeks after launch, Sol Systems is proud to announce that its new solar finance platform, SolMarket, has increased from $350 million in available investment dollars to $400 million. In addition, reception by solar installers and developers across the country has been overwhelmingly positive. SolMarket’s network now includes over 180 companies and 300 users.
SolMarket is a financing platform that will catalyze investment in solar energy projects nationwide by transforming how solar projects are financed. SolMarket provides investors and developers with the tools they need to efficiently originate, evaluate, finance, and construct renewable energy projects. It provides a standardized origination platform, a document library, modeling software, and a standardized document suite. SolMarket will also offer developers group purchase discounts for solar modules and other equipment. There are no costs for developers to participate in SolMarket.
“We talk to hundreds of solar developers about prospective commercial and utility-scale projects, and unfortunately, many of these solar projects are never built due to an inability to efficiently locate financing,” said Yuri Horwitz, CEO of Sol Systems. “We have created SolMarket to help drive efficiencies into the solar market and connect investors and developers effectively. SolMarket will reduce the cost of financing transactions and enhance the tempo of solar project development.”
SolMarket is currently seeking projects ranging from 50 kW to multi-megawatts in size. Solar developers are encouraged to submit their projects prior to September 30th, when investors will get their first look at projects. Projects entered prior to this date increase their visibility and the likelihood of getting included in the investors’ 2011 portfolios.
Sol Systems invites interested solar developers to attend a SolMarket webinar, hosted every Tuesday, Wednesday, and Thursday during the month of September at 2 pm EST. For more information, please email firstname.lastname@example.org or visit www.solmarket.com.
About Sol Systems
SolMarket is a wholly owned subsidiary of Sol Systems. Sol Systems is a Washington D.C. based solar finance firm, and the largest solar renewable energy credit (SREC) aggregator in the nation, with over 2,300 customers and over 20 MW of solar capacity under management. Through its SREC offerings, it has promoted the development of the solar market by providing long-term financing options for SRECs, facilitating over $100 million in solar development.
Ms. Sudha Gollapudi, Director of Strategic Partnerships
Solar Renewable Energy Credit (SREC) markets are comprised almost entirely of solar photovoltaic generators. However, recent legal changes offer opportunities for solar thermal developers to participate in two of the country’s most lucrative programs.
As a background, a solar renewable energy credit is a tradable commodity like a carbon credit. However, unlike carbon credits, an SREC signifies the environmental attributes associated with 1 MWH of electricity, or its thermal equivalent, produced by a solar energy generator.
The value of an SREC is derived by a state’s Renewable Portfolio Standards (RPS). A RPS is a state-specific statute dictating that certain percentage electricity must come from renewable energy generators. Thirty-one states within the US have RPS statutes on the books. Of these thirty-one states, seven require a percentage of the renewable electricity production come from solar energy technologies (i.e. solar carve-out). These seven states also define a Solar Alternative Compliance Penalty (SACP), or the penalty a regulated utility or energy supplier must pay if they fail to acquire the dictated number of SRECs to meet the RPS. For example, energy suppliers in MD and DC must surrender $400.00 and $500.00, respectively, for each SREC they fail to acquire to meet the solar carve out defined within the RPS. The SACP functions as the price ceiling for an SREC market.
Currently, only a very small number of solar thermal generators participate in these SREC markets, because until recently solar thermal generators did not meet the definitional requirements of a solar energy generator within RPS statutes. However this is changing.
The SREC landscape for solar thermal generators is now open for system owners in MD and DC. Effective January 1, 2012, the Maryland RPS will allow solar thermal generators to earn SRECs. To earn SRECs in Maryland the following conditions must be met: (1) the system must be installed on or after June 1, 2011, (2) if the system is residentially owned, the facility must meet the Solar Rating & Certification Corporation’s (SRCC) OG-300 standards, (3) if the facility is commercially owned, the components installed must meet the SRCC’s OG-100 standards and an OIML certified meter must be installed to measure generation at the facility, and (4) the facility must be located within Maryland. To participate in the DC SREC market, (1) residentially owned systems must meet the SRCC OG-300 standards, (2) commercially owned systems must utilize components that meet the SRCC’s OG-100 standards and have an OIML meter installed to measure generation, and (3) pending new legislation, the facility must be located within the District.
In light of these recent legal changes, solar thermal developers can now participate in two lucrative SREC markets. In 2015 alone, the Maryland SREC market alone will have a ceiling value of over $100 million. Or, put another way, more than 195 MW-eq. of new compliance appetite is legislated in DC and MD over the next 3 years. To learn more about SREC options available to you, please visit www.solsystemscompany.com. As the country’s oldest and largest SREC aggregator, we can craft the solution that is right for you.
Sol Systems’ valued customer, Phil Hostetter, recently had an interesting version of show-and-tell at his home in Sterling, Virginia, with twelve 4th and 5th graders from Guilford Elementary School. Phil, who has a 4.05 kW solar photovoltaic (PV) system, gave a tour of his eco-friendly home, which also has a hybrid trombe wall and a solar hot water system . Phil and his wife Stephanie became interested in solar energy during the 1980’s and decided to build a passive solar home, with the idea that it would go solar electric as soon as possible. Although the house was completed in 1986, their initial plans to add PV panels to their home were delayed until 2009. The financial help from tax credits and the current SREC benefits he receives greatly contributed to the execution of the project.
When Phil heard about the environmental club at nearby Guilford Elementary School, he conceived the idea of the show-and-tell as a way to share his enthusiasm for solar and other green technologies and to inspire young students to take an interest in environment issues. The environmental club members had been learning about sustainable living for quite some time. Phil briefly described the process of the system to them but remarks, “The kids definitely knew a lot. They knew how it worked and could recognize many features of the system.” The club practices composting and cultivates a vegetable garden at the school. (Phil and Stephanie donated vegetable and flower seedlings from their greenhouse.) Club members also sell some of the harvest to raise money for the school and are thinking of doing some sort of solar installation in the near future.
Phil received numerous thank you notes and illustrations of his house. “We got a great response from the tour. I’m pleased they took the time to write thank you notes.” We at Sol Systems enjoyed the letters and wanted to share with our other customers. It is without a doubt important to educate the youth of the importance of sustainable living with a limited number of resources in the world. We hope this article and the letters posted below inspire our other customers to host similar events for local school children. Thank you, Phil, for sharing your story, and for continuing to spread the knowledge!
Solar Renewable Energy Credit (SREC) markets can be volatile, which can create significant concerns for a financier interested in investing in a commercial solar photovoltaic project. Exposure to price volatility can undermine the economics of solar projects, or simply prevent a project from ever taking off. As state rebate programs are depleted, and SREC values become even more critical to the financing of commercial-scale solar plants, minimizing SREC price volatility will be essential to success. For these reasons, more sophisticated SREC financing solutions will be required for commercial projects to address and mitigate price risk.
When discussing commercial scale solar projects, generally we are referring to projects that are larger than residential solar systems, but that are not large enough to negotiate an SREC contract directly with a regulated energy supplier or utility. Using this definition of commercial project, a commercial project can range anywhere between 20 KW to 2 MW, and produce approximately 24 to 2,400 SRECs annually.
In robust SREC markets, particularly the ones where state rebates and incentives are draining quickly (i.e. Ohio, New Jersey, DC), the value derived from SRECs may constitute 30 to 40% of the project’s returns over the first five years of operation. So, for example, a project in Pennsylvania may be a good investment if SREC values are stable during the first five years of the system’s production, but may be a very poor investment if SREC values drop by 20%, reducing the total yield on the investment of roughly 8%. In short, SREC price volatility can turn a relatively profitable investment into a wash for the investors backing the project.
The addition of new solar capacity, legislative changes to state Renewable Portfolio Standards (RPS), and other SREC market developments can all affect SREC values. This uncertainty poses a risk to the security of a solar investment, and addressing this risk will be essential for project developers.
Sol Systems makes it possible for project developers and system owners to address this risk by providing various SREC payment structures. For commercial projects, Sol Systems can partition portions of the SREC stream into forward contracts and/or brokerage arrangements. The forward contracts are available in 3 and 5 year terms. Sol Systems can also offer an upfront payment that pre-pays for the future rights to SREC generation. The upfront payment securitizes the SREC stream, providing the greatest insulation against SREC price volatility and regulatory risk. These options allow solar investors to hedge their exposure to SREC price volatility. Depending on the investor’s risk appetite, Sol Systems can provide SREC services that provide the right level of risk and reward to ensure that a project gets off the ground and pays investors the returns they expect.
The United States House of Representatives extended the investment tax credits grant program (ITC Grant Program) today, a huge victory for the solar industry. The ITC Grant Program provides grants in the amount of thirty percent of a project’s costs, and is one of the single most important pieces of legislation for commercial solar development currently. The ITC Grant is often combined with Sol Systems’ Sol Up-Front (which provides up-front financing based on SREC production) to help pay down much of the costs of a system within 90 days of installation.
The program was created by the American Recovery and Reinvestment Act (Section 1603) to provide commercial solar installations with a cash grant in lieu of the 30 percent solar investment tax credit (ITC). The ITC actually went into law in 2008, but the economic conditions created by the global recession, and the lack of tax appetite on the part of many institutional investors, meant that few institutional investors could utilize the ITC. The 1603 Program allows the Treasury to effectively purchase the tax credit from solar developers through the 30% grant.
So far, the ITC Grant has helped more than 1,100 solar projects in 42 states and has supported $18 billion in investment. The program has been critical in allowing the solar industry to grow by over 100 percent in 2010, create enough new solar capacity to power 200,000 homes and provide work to more than 93,000 Americans.
Standard Solar, Inc., a leader in the full-service development, installation and financing of solar electric systems for commercial, government and residential customers, today announced a partnership with Sol Systems, the nation’s largest solar renewable energy credit (SREC) aggregator. The partnership will help make alternative energy solutions more affordable for Standard Solar customers.
“This partnership will go a long way for our current and future customers,” said Standard Solar President Scott Wiater. “Not only will it help businesses and homeowners significantly cut costs of their solar energy systems, but it will help those considering solar energy to realize that alternative energy is an affordable solution.”
Solar renewable energy credits are a critical component to making solar energy an affordable option for homeowners and businesses, and can compose up to 30 percent of a solar energy system’s payback. Through Standard Solar’s partnership with Sol Systems, customers will have access to competitive SREC pricing and the resources to secure the maximum benefit from their SRECs.
Through one SREC program, Sol Upfront, customers can receive immediate financing for their systems. Sol Systems will purchase all estimated SREC production for a 10-year period, providing customers with a one-time, lump-sum payment that can be used to pay off installation costs. The Sol Annuity SREC option allows customers to lock in the current SREC rate and receive payments for each full SREC produced. This gives customers reliable, quarterly payments as solar energy is generated.
“We are excited to work with Standard Solar, an installer with one of the best reputations in the Mid-Atlantic region,” said Sol Systems CEO Yuri Horwitz. “The partnership will extend our solar financing services to hundreds of homeowners and businesses and give them easy, economical ways to invest in solar.”
Standard Solar is also participating in Sol Lease, which allows Washington DC homeowners, schools, churches, businesses and non-profits to secure solar energy with no up-front costs. By paying a fixed, monthly payment, these groups can enjoy the savings and benefits of solar energy produced from a solar energy system for a 10-year contract term.
About Standard Solar
Standard Solar, Inc. is a leader in the full-service development, construction, integration, financing and installation of solar electric systems. Dedicated to making solar solutions more accessible to consumers, businesses, institutions and governments, the company is leading the way to energy independence. Committed to offering responsible and energy cost-saving solar solutions that conform to the highest standards, Standard Solar is one of the most trusted and respected solar companies. Since 2004, Standard Solar has been the partner of choice to make solar energy financially accessible, helping customers through financing options, including Power Purchase Agreements (PPAs) and navigating expanded federal and state and local tax credits. The company’s Standard Energy Solutions (SES) division provides energy auditing and retrofitting services for energy improvement projects. Ranked the 73rd Fastest Growing Private Company in America in 2010 by Inc. magazine, and the highest-ranking renewable energy company on the list, Standard Solar is headquartered in Rockville, MD. For more information, please visit www.standardsolar.com.
About Sol Systems
Sol Systems is a Washington D.C. based solar energy finance and development firm that was built on the principle that solar energy should be an economically viable energy solution. Sol Systems enables solar developers, homeowners, and businesses to fully realize the value of their solar energy systems by providing them with a range of options for selling their SRECs. To date, Sol Systems has helped over 1,300 customers with projects ranging from 1 kW to over 1 MW realize the value of their SRECs. Sol Systems currently operates in Delaware, Indiana, Kentucky, Maryland, Massachusetts, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Virginia, Washington, D.C., and West Virginia. For more information, please visit www.solsystemscompany.com.
The mid-Atlantic region has witnessed a rapid growth in solar installations over the past few years. While the large multi-megawatt commercial projects make front-page news, it is interesting to note that there is also vibrant growth in mid-size commercial projects, ranging from 50kW-500 kW. Today, the total capacity of solar installed in the PJM region (solar projects in the mid-Atlantic region) is 262 MW, of which 83 MW comes from systems in the 50 kW-500 kW range. Moreover, the mid-size commercial project segment has shown steady growth, adding approximately 26 MW each year since 2009.
Large solar projects face significant financing hurdles because millions of dollars of capital are required, but these projects also fetch the attention of large banks, energy suppliers and tax equity investors. Mid-size commercial projects face the daunting challenge of financing their projects with less visibility, but they can be successful if they make use of all the available incentives and financing tools.
Many mid-size commercial developers and installers can help the customer through the process for applying to federal and state grants; however, monetizing the Solar Renewable Energy Credits (SRECs) is often more difficult. SREC markets are complex for two main reasons. First, SREC markets differ across various states depending on the State’s Renewable Energy Portfolio Standard (RPS) and Solar Alternative Compliance Payment (SACP), the fee paid by energy suppliers for non-compliance of RPS requirements. Second, SREC markets have been known to be fairly volatile due to legislation changes and variations in supply and demand. These challenges can be mitigated by finding a stable partner with long-term SREC contracts who can help system owners navigate the legislation, and provide security of cash flow payments which allow system owners to accurately determine their payback period.
Investing in a mid-size commercial solar project is a sizeable investment for a small business owner or homeowner, thereby making it imperative to ask some difficult questions to the SREC aggregator or financier. The most important question to ask the SREC aggregator is: “Are your customer contracts backed up with energy supplier contracts?” If an SREC aggregator has long term contracts with energy suppliers, then the SREC firm has foresight into future SREC prices and can offer a fair, guaranteed rate. On the contrary, if an SREC aggregator is speculating on price and hoping to sell the SRECs in the spot market at a future date without any security of a long term agreement, their customer is exposed to a lot more SREC market risk. System owners should also be aware of the other factors that shape the SREC markets, like regulatory changes, rapid adoption of solar, and market shifts due to large-scale solar projects.
Being the oldest and largest SREC aggregator in the country, Sol Systems has matched a majority of its long-term SREC contracts with its energy supplier contracts, thereby providing the market stability and flexibility that mid-size commercial customers seek. Today, Sol Systems works with over 200 developers and installers in financing mid-size commercial solar projects. More information can be found at www.solsystemscompany.com.
When speaking with homeowners who have recently invested in solar energy, and who are considering how to manage the sale of their Solar Renewable Energy Credits (SRECs), a common question is, “how will my solar electricity be monitored and how do I earn SRECs?”
This simple question cuts right to some of the most complex and nuanced underpinnings of how SREC markets work and begs answers to questions like:
• How is solar electricity production monitored?
• How is this production reported to a solar Attributes Tracking Program?
• How is the reported generation verified as accurate?
These questions illustrate the complexity of SREC markets — particularly because the answers to these questions vary by state. It’s understandable that homeowners can be intimidated by the solar industry and SREC markets; however, navigating these complexities is possible.
Each state determines its own regulations for monitoring solar electricity generation for SREC production. These regulations may require an inverter, a solar meter, or a remote monitoring system. Depending on the system state, and the size of the system, vastly different reporting technologies are required.
Reporting provisions refer to how the solar monitoring data is transmitted to an Attributes Tracking System (such as PJM’s Generation Attributes Tracking System “GATS”) for verification and ultimately SREC production. Solar reporting provisions are also determined on a state by state basis. For example, in Massachusetts all monitoring data must be reported to the Massachusetts Production Tracking Systems (administered by the MA Clean Energy Center). For systems above 10 KW , the monitoring data must also be reported electronically though a remote monitoring system, such as Locus Energy. However, each state differs on these provisions as well.
Verification of reported monitoring data is the final step of the compliance cycle for SREC production, and is conducted by the Attributes Tracking System. The only exception to this rule is Massachusetts, in which the Production Tracking System verifies the reporting data and then transmits it to NEPOOL GIS on the system owner’s behalf. For all solar energy systems registered with PJM GATS, GATS verifies reporting data by comparing the data with its own internal models. If and when GATS determines the reported generation falls within boundaries of the projected modeled generation, GATS then awards the system owner’s account SREC value. In the event that the reported data is not within the bounds of the projected modeled generation, GATS follows up to verify the accuracy of the reported data. In the future, some states will be implementing independent verification steps to ensure that the reported data is accurate, and markets are operating efficiently.
Certainly, it can be challenging to understand and abide by the requirements of SREC monitoring, reporting, and verification; however, the benefit of working with an aggregator like Sol Systems is that we navigate these complexities on behalf of our customers. We understand these provisions, abide by them, and work with regulators on a daily basis. This means our customers can rest assured that they receive all the credit, and solar credits, for their solar electricity production.