Recent changes to the Rhode Island FIT program will require projects under 500 kW to submit competitive bids for the rate at which National Grid will purchase electricity and environmental attributes. Developers with projects in the Rhode Island FIT program should contact Sol Systems to discuss financing options.

Developers with projects in the Rhode Island FIT program should contact Sol Systems to discuss financing options.

On August 7th, National Grid changed the rules for small solar systems in the bidding process for Rhode Island’s feed-in tariff program. The changes came in response to the Rhode Island legislature’s amendment to the Standard Contracts Act, which established the state’s feed-in tariff program early in 2013. The amendment mandated several changes to the state’s feed-in tariff program administered by National Grid. The program, referred to as Distributed Generation Standard Contracts, originally set forth a schedule of tariffs for various projects based on size and energy type. The changes will affect applicants for small DG projects (under 500 kW for solar), which will now have to submit competitive bids for the rate at which National Grid will purchase electricity and environmental attributes.

The recent changes will only affect some of the applicants for the second round and all applicants for the upcoming September round—any contracts awarded at the ceiling rate will remain in place. Once the adjustment is approved by the Rhode Island Public Utilities Commission (PUC), applicants from the second round will be allowed to update their applications with competitive bids for the rate. Applicants for the September round will have to submit their applications with competitive bids already included. National Grid will then select projects by multiple criteria, including the rate and the project’s progress. However, applications with the lowest bids will be the most likely to receive contracts.

The changes may be discouraging to developers who were counting on the program’s high rate of $0.28 per kWh for their small projects’ economics. However, the adjustment could encourage more coordination between investors and developers on small projects in Rhode Island. Since developers will now have to compete on rates, they may look to investors to submit rates that make projects bankable while remaining competitive within the application process, instead of gambling on financing the project once it receives a contract.

Early coordination between solar investors and developers could put projects in a better place for both the application process and final completion. Sol Systems will continue tracking this program for our investor and developer clients in order to better advise on the application process and to enhance communication between investors and developers as projects pursue contracts. If you have a project that has been submitted into the program or awarded a contract, and is in need of financing, please contact our team at finance@solsystemscompany.com or (888) 235-1538×2.  Our team is 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.