2015 Top Trends

As we close out 2015, we reflect on some of the most popular trends in solar energy finance and development this year.

Since 2012, SOURCE: The Sol Project Finance Journal, has been providing you with real-life trends in solar finance and development. All articles in SOURCE are written after close consultation with our origination and investment teams on what they are seeing in the market. Additionally, we work to identify issues the industry should address to achieve efficiency and scale.

As we close out another year, here are our most-read industry trends of 2015.

1)    State Markets

Without a doubt, one of the most common questions that we receive from developers and investors alike is: “In which markets should I be operating?” Our partners are constantly checking in with us on various levels of political and regulatory risks (e.g. net metering caps) and how they affect their businesses, or which new incentive programs are popping up. And, after one market becomes volatile (e.g. Massachusetts), they’re asking us where they should next focus their efforts.

Our state market updates and trends in aggregate are our most popular articles. Based on our most-read articles this year, SOURCE readers were most interested in:

  • New York – After much hype, the commercial and industrial (C&I) Megawatt Block program failed to take-off, mostly because initial incentive levels were set too low for projects to pencil. There is momentum stirring to change this, which our SOURCE readers been following closely.
  • “Almost there” markets – New state markets have emerged after the authorization of third party financing or other incentive programs. While they may be too tight to pencil now, further cost declines will make the growth of these markets possible…if Congress chooses to extend the ITC.
  • Comeback kids – Many of you were surprised to read that ground mount projects in Pennsylvania are now able to pencil, even with SRECs. And, let’s also not forget New Jersey, with SREC prices in the $260 – $270 range on the spot markets.

2)    Cheap-O Solar: How Low Can You Go?

The cost of solar has come down by 50% in the last five years. With these cost declines, solar is becoming possible in new markets at record rates.

We covered the Austin Energy RFP with bids coming in below 4 cents/kWh. But remember: RFPs can often be a race to the bottom, and projects bid in that low are not always able to be completed.

3)    The YieldCo Bubble

All that glitters isn’t gold. As many YieldCos suffered in the last few months of 2015, developers that had previously been selling their projects more or less exclusively to YieldCos have reconsidered tax efficient capital as a means to finance their deals. After we wrote about this in October, Bloomberg came out with a similar article this month – and they agree with us.

Did you previously sell your projects to YieldCos? Give us a call. We can take a look at any stranded assets and discuss options for purchase.

This is an excerpt from our December edition of SOURCE: the Sol 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 pr@solsystems.com.

ABOUT SOL SYSTEMS

Sol Systems is a solar energy finance and investment firm. The company has facilitated financing for 410MW of solar projects on behalf of Fortune 100 corporations, insurance companies, utilities, banks, family offices, and individuals. 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. Inc. Magazine named Sol Systems on its annual Inc. 500 list of the nation’s fastest-growing private companies for a second consecutive year, ranking it No. 6 in the nation’s top solar companies in 2014. For more information, please visit www.solsystems.com.