The following is an excerpt from our Solar Project Finance Journal, a monthly electronic newsletter analyzing the solar industry’s latest trends based on our unique position in the solar financing space. To view the full Journal or subscribe, please e-mail firstname.lastname@example.org.
As we reported on last year, sponsor equity is in abundance as new players flock to the solar industry in seek of the secure, stable returns that solar assets can provide (for more, read Want to Invest in Solar? Join the Club). This trend has continued into 2014, as more utilities, YieldCo’s, and developers vie to own solar projects – and even more players pretend to fit into one of these investor categories.
This abundance of capital and new entrants to the solar industry creates confusion for developers trying to make sense of an increasingly saturated marketplace. When vetting a financing partner, developers should first ask themselves – or better, their potential investor – if the investor has the capital readily available to finance the project. The second question should be if the investor has a way to monetize the necessary tax benefits.
One of the best ways to separate the real investors from the opportunists is to ask them to put their money where their mouth is. At Sol Systems, we demonstrate credibility by putting our developer partners’ viable project opportunities under exclusivity in term sheet stage. In exchange for their exclusivity, we provide the developers with a $10,000 payment should we fail to finance the deal in an appropriate time period (assuming that all project information relayed to us by the developer turns out to be accurate). We call this our Sol Guarantee, and we hope this becomes standard in the industry.
About Sol Systems
Sol Systems is a solar energy finance and investment firm. The company has facilitated financing for 165MW and over $600 million of distributed generation solar projects on behalf of Fortune 100 corporations, insurance companies, utilities, banks, family offices, and individuals. It has over $300 million in assets under management as of September 2014. Sol Systems provides secure, sustainable investment opportunities to investor clients, and sophisticated project financing solutions to developers. The company’s tailored financial services range from tax structured investments and project acquisition, to debt financing and SREC portfolio management. For more information, please visit www.solsystemscompany.com.