For developers seeking financing for a sub-500kW project, all-in price is never the only consideration.

For developers seeking financing for a sub-500kW project, all-in price is never the only consideration.

For developers seeking financing for a sub-500kW project, all-in price is never the only consideration.

The price of a project does not matter if the financier is unable pay the developer in a timely manner, overpromises on his/her ability to raise tax equity, delays diligence items, reprices the deal, or finds another way to destabilize an otherwise viable project. When selecting financing, developers must ask themselves: How certain am I that I can close with this investor, and if so, will the investor live up to his/her end of the deal? What’s in the fine print?

Sol Systems is offering a new program to ensure our developer partners realize cash flows quickly with very few contingencies.

For projects where developers have LOIs in place (or better—executed PPAs), Sol Systems will pay a developer fee and acquire the projects and any related documents, designs, or permits.  Sol will then work with the developer to handle all remaining development tasks, including host negotiations, and bring the project to commercial operation quickly and efficiently by leveraging internal legal and engineering resources. With this program, we take on project risk so our developer partners can focus on doing what they do best: finding the next opportunity.

Below are items that make a project more valuable and will maximize the developer fee:

  • Executed site lease
  • Executed power purchase agreements
  • Complete due diligence items, such as interconnection applications, geotechnical analyses (if applicable), title reports and incentive applications.

While it may seem counterintuitive, engaging an EPC or running energy models will likely not add value given that Sol Systems prefers to create energy models in-house and identify construction firms from a list of preferred partners.

Taking a developer fee and having Sol finish the project can be particularly useful for sub-500kW projects. As we’ve written about before, projects under 500kW can quickly fall victim to seemingly minor issues or delays given transaction costs related to relatively smaller opportunities (as opposed to a one-off 10MW project, for example, which can more easily absorb these costs). Selling early for a development fee reduces execution risk for the developer, allowing Sol Systems to efficiently move the projects to the finish line.

For larger projects or portfolios of 10MW in size or more, Sol Systems can offer innovative development capital to bring projects to NTP or across the finish line to COD. Development capital is another way Sol Systems works with our developers to reduce their risk, and ensure projects get completed. Read more here about how Sol Systems can deploy development capital to ensure your project gets done.

Contact our team at 888-235-1538 x1 or finance@solsystems.com.

ABOUT SOL SYSTEMS

Sol Systems is a solar energy finance and investment firm. The company has facilitated financing for over 400MW 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, project acquisition 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.