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SOURCE: The Sol Project Finance Journal, August 2016

2015-04-29-Sol-Cover-Banner2

SOURCE is a monthly solar project finance journal that our team distributes to our network of clients and solar stakeholders. Our newsletter contains solar statistics from current real-life solar projects, trends, and observations gained through monthly interviews with our solar project finance team, and it incorporates news from a variety of industry resources.

Below, we have included excerpts from the August 2016 edition. To receive future Journals, please email pr@solsystems.com.

PROJECT FINANCE STATISTICS

The following statistics represent some high-quality solar projects and portfolios that we are actively reviewing for investment.

Have a solar project in need of financing? Our team can provide a pricing quote for you here.

PPA-RATE-August


AugustPFJCombocharts

STATE MARKETS

Georgia – Look out world, 1,600 additional MW of renewable energy are coming to the Peach State. At the end of July, regulators approved Georgia Power’s plan to add 1,600MW of solar, wind, and biomass by 2021. Among the 1,600MW will be approximately 1,050MW of utility-scale, under which wind will be capped at 300MW. This provides tremendous potential opportunity for solar, though this very much depends on rates which have made Georgia developers and EPCs among the most unyielding in the nation.

The plans also include 100MW of distributed generation (DG) projects up to 3MW in size, 50MW of customer-sited DG, 200MW of Georgia Power “self-build” projects, and a new 200MW Commercial and Industrial Program, details of which are still to be determined. The 1,600MW boost may increase Georgia Power’s renewable representation from 5 to 12% of the utility’s overall capacity.

Also approved in the same filing were early site studies and permitting for several hundred megawatts of new nuclear capacity (atop the troubled Vogtle 3 & 4 reactors already underway). Indeed, Georgia’s overall carbon dioxide intensity could be significantly lower in the next 4 – 10 years.

Massachusetts – Uncertainty is rampant in Massachusetts as the Commonwealth transitions away from its reigning solar incentive and net metering programs.

SREC II —> ???

The industry is at the edge of its seat awaiting an initial proposal from the Massachusetts Department of Energy Resources (DOER) on the successor program for SREC II. In the meantime, the ever-tolerant DOER has made changes to its Emergency Regulation to provide a four-month construction deadline extension to May 8, 2017 for solar projects demonstrating that 50% of construction costs have been expended by January 8, 2017. These projects will still qualify for SREC II, but receive a lower SREC factor – which creates a tricky balancing act as DOER must try to minimize moral hazard and spur urgency in development while sparing many projects the guillotine. DOER announced draft guidelines on the 15th, and is accepting comments until the 22nd.

Net Metering —> Market Net Metering

Last month, the Department of Public Utilities released its final framework for the transition to market net metering credits – approximately 60% of retail credit. Systems will qualify under the old regime with full retail credit if:

  • They submit an Application for a Cap Allocation (ACA) before the notification date of September 26 at 2pm
  • ACAs submitted before the notification date are deemed complete by the Administrator of the System of Assurance
  • Cap allocation is obtained by January 8, 2017

And of course, residential systems are untouched.

It is critical to remember that the strongly reduced credit will apply only to net export against monthly meter reads. The window may be closing on the heavy net exporting Virtual Net Metering Credit-reselling systems, but onsite systems serving their own load will be more or less unscathed.

Uncertainty Affects the Market

As SREC II and the current net metering regime come to a close, developers are racing toward these respective deadlines. As a result of this rush, there is a shortage of electricians available for AC work as demand exceeds supply. Subsequently, the price of hiring labor for electrical work has become much more expensive. Other challenges include uncertainty over SREC factors and the new solar incentive program, which makes accurate pricing of projects currently under development – or new opportunities –  nearly impossible.

Finally, be sure to pay attention to the results of the August 23 technical session on minimum monthly reliability charges (MMRCs), which may also affect project economics.

New York – On August 1, the New York State Public Service Commission approved the Clean Energy Standard (CES), which will require 50% of the Empire State’s electricity needs to come from clean energy by 2030. Under the CES, NYSERDA will incentivize Large Scale Renewables (LSR) through centralized renewable energy credit (REC) procurements, very much like they have under the current RPS. The major difference will be the size; the annual obligations for REC purchases under the CES will be approximately twice the size of the annual RPS solicitations that occurred between 2011 and 2015. In Million Metric Tons Carbon Equivalent (MMTCE) converted against the baseline generation mix in NYISO and adjusted for inflation, that’s “a lot.”

However, under the REC procurements, solar will compete with wind, biomass, fuel cells, landfill gas, and other eligible Tier 1 sources for 20-year REC contracts. For reference, 116MW were awarded at a weighted average price of $24.57/REC in the 2015 Procurement. 2017 Procurement dates will be announced on December 1.

SOLAR CHATTER

  • Net energy metering (NEM) 2.0 is upon us in California. In June, San Diego Gas & Electric became the first to hit its NEM 1.0 cap, and Pacific Gas & Electric is expected to follow as early as October. Despite the slight hit to project economics, the new regime will also increase the size of projects eligible for net metering; previously, projects were limited to 1MW.  PG&E made interconnection applications for systems greater than 1MW available earlier this week.
  • Property taxes remain a barrier to solar project development, and also create quite the headache in diligence. Each time an investor enters a new territory, new property tax rules must be understood. The remedy? Developers may show their sophistication and transactional experience by thoroughly understanding the local tax regime, knowing their local assessor, and documenting the expected expense for their partners to underwrite.
  • Know anyone in Florida? Voters will be able to cast their vote in support of Amendment 4, a measure which will encourage solar in the Sunshine State, during the August 30th primary. Take a moment and tell five friends. Then, in November, watch out for the confusing, utility-backed “solar” amendment, Amendment 1, during the general election.
  • Our utility-scale origination team is seeing more activity in southern markets such as Florida, Alabama, Mississippi, Texas, and South Carolina. Developers are looking to these states because of their above average irradiance and relatively low cost to procure land.
  • Despite the Supreme Court “stay” on the Clean Power Plan (CPP) earlier this year, California submitted a draft of its CPP compliance plan at the beginning of August. As Mary Nichols, Chair of the California Air Resources Board tweeted: “We’re down with #CPP (yeah, you know me!)”
  • 2016 is looking to be a banner year for utility-scale solar in Virginia. Dominion is making progress toward its goal to reach 400MW of solar by 2020, much of which has been comprised of large “self build” solar farms for corporate offtakers. GTM Research estimates that Virginia will reach achieve 166MW in 2016.

ABOUT SOL SYSTEMS

Sol Systems is a leading solar energy investment and development firm with an established reputation for integrity and reliability. The company has financed approximately 450MW of solar projects, and manages over $500 million in assets on behalf of insurance companies, utilities, banks, and Fortune 500 companies.

Sol Systems works with its corporate and institutional clients to develop customized energy procurement solutions, and to architect and deploy structured investments in the solar asset class with a dedicated team of investment professionals, lawyers, accountants, engineers, and project finance analysts.

SOURCE: The Sol Project Finance Journal, July 2016

2015-04-29-Sol-Cover-Banner2

SOURCE is a monthly solar project finance journal that our team distributes to our network of clients and solar stakeholders. Our newsletter contains solar statistics from current real-life solar projects, trends, and observations gained through monthly interviews with our solar project finance team, and it incorporates news from a variety of industry resources.

Below, we have included excerpts from the July 2016 edition. To receive future Journals, please email pr@solsystems.com.

PROJECT FINANCE STATISTICS

The following statistics represent some high-quality solar projects and portfolios that we are actively reviewing for investment.

Have a solar project in need of financing? Our team can provide a pricing quote for you here.

PPA-RATE-July


JoinedRates

STATE MARKETS

District of Columbia – Washington, D.C. has become the latest “state” (statehood being a sore subject for us District residents) to pass legislation increasing its renewable portfolio standard (RPS). Under a policy crafted by D.C. Councilmember Mary Cheh, D.C. will procure 50% of its electricity needs from renewable energy by 2032, 5% of which will come from solar. The increased support to the solar renewable energy credit (SREC) market – which will have a significantly heightened price ceiling until 2023 – will facilitate financing for rooftop and carport projects as low as <200kW that are otherwise challenging to pencil in other markets.

Despite the SREC market hyper-boost, developers will still have to somehow find room for approximately 300MW in 68.34 square miles of heavily urbanized space over the next 16 years. The District’s biggest challenge remains a scarcity of available land and eligible roof space. Eligible commercial rooftops in D.C. often house bulky HVAC equipment or rooftop decks.  Solar must also compete with green roofs, which are incentivized through a rebate, or in the case of new construction, effectively required as a storm water protection measure. Developers interested in learning more about the D.C. market can e-mail our team at finance@solsystems.com for more information.

New Jersey – On June 27, the New Jersey Senate passed legislation – S2276 – to “pull forward” the state’s solar carve-out from 3.47% to 4.1% by 2021. If passed and ultimately signed into law by Vice President Governor Christie, the New Jersey solar industry would be better equipped to meet its build rate potential after the solar investment tax credit (ITC) extension; the market has softened over the past couple months as residential build has increased drastically. The General Assembly is expected to take up the bill in early September.

Meanwhile, Expressions of Interest (EOI) for new Grid Supply projects were due to the Board of Public Utilities (BPU) on July 15. The BPU will make a decision after assessing the impact on the stability of the SREC market. If the pull forward does not become law, we estimate that very few projects that submitted an EOI will be allowed to move forward.

Rhode Island – On July 7, Governor Gina Raimondo signed a package of legislation that will encourage solar development in the Ocean State. The legislation will open the RE Growth program to community solar facilities, streamline permitting, standardize property tax rules, and expand third party financing opportunities. The package also includes legislation that will increase the renewable energy standard to 38.5% by 2035. In related Rhode Island news, developers have until July 29 to submit bids into the RE Growth program’s latest enrollment. Developers in need of assistance with their bids may contact our team at finance@solsystems.com. We’d be happy to help.

What do D.C., New Jersey, and Rhode Island all have in common? They are all strengthening their renewable energy targets. Meanwhile, Ohio is considering a freeze to its moderate 12.5% renewables target, and in Maryland, Governor Hogan recently vetoed legislation that would have modestly increased its RPS.

SOLAR CHATTER

  • After about two years of waiting, the 50(d) income ruling is expected to be released soon. This guidance will be impactful for tax equity investors utilizing the inverted lease structure. In its issuance, the IRS will clarify how it recognizes the income associated with the tax credit and determine whether that income should be included in a partner’s outside basis calculations.
  • We’ve got our eyes on the Connecticut ZREC program, which announced its winning bids last week. Developers in need of financing for Connecticut projects should connect with our team via their account manager or finance@solsystems.com.
  • Never a dull moment… The next month will be a time for change in the Massachusetts market. The Massachusetts Department of Energy Resources (DOER) will announce its first draft of the next solar incentive regime within the next couple weeks, and the Department of Public Utilities (DPU) will clarify the notification date for Market Net Metering Credits at the end of the month. On August 23, the DPU will hold a technical workshop to discuss the implementation of Minimum Monthly Reliability Contributions (MMRCs). Stayed tuned.
  • Rumor has it that a certain big name tax equity provider has run out of tax efficient capital…for now. It’s a buyer’s market.
  • As new programs sprout up around the country, financing for community solar is becoming more mainstream. We predict more business models evolving to incorporate community solar and smaller project sizes, especially with the continued challenges faced by qualifying facilities (QFs).
  • The struggle is real, at least for Arizona projects. Existing rate structures are making commercial solar projects tough to pencil with obscure fixed and demand charges, as well as an assessed solar adder in certain service territories.
  • Add Vermont to the list of states who love all things “green” – including green energy – so long as it does not interfere with its green space. We’ve heard stories of greenfield development facing new permitting hurdles in the Green Mountain state. Solar development in Frederick County, Maryland is facing similar obstacles. Last week, County Executive Jan Gardner extended a moratorium on solar projects 10 acres and above until the County Council can approve new zoning regulations for ground mount solar projects.
  • Post-PPA residual value is an ongoing topic of discussion throughout the industry. Sol Systems keeps tabs on wholesale electricity projections from various third-party firms for utility-scale project post-PPA revenue estimates. The team also recently dug into precedent set by North Carolina’s oldest hydropower qualifying facility (QF) contracts. When possible, we recommend that developers secure unilateral site control extension options beyond the initial term of the PPA so a longer operating life can be considered – sometimes up to 35 or 40 years – but caution that various economic and regulatory risks must be considered.

ABOUT SOL SYSTEMS

Sol Systems is a leading solar energy investment and development firm with an established reputation for integrity and reliability. The company has financed approximately 450MW of solar projects, and manages over $500 million in assets on behalf of insurance companies, utilities, banks, and Fortune 500 companies.

Sol Systems works with its corporate and institutional clients to develop customized energy procurement solutions, and to architect and deploy structured investments in the solar asset class with a dedicated team of investment professionals, lawyers, accountants, engineers, and project finance analysts.

Meet the New Faces of the SREC Customer Service Team

Avery Sellers and Lauren Miller help manage over 7,000 customer accounts

Avery Sellers and Lauren Miller help manage over 7,000 customer accounts

Sol Systems is pleased to introduce two new members of the Solar Renewable Energy Credit (SREC) Customer Service Team: Lauren Miller and Avery Sellers.

Along with Bridget Callahan, Kate Brandus, and Jessica Cowan, Lauren and Avery are responsible for managing over 7,000 customer accounts, with tasks ranging from registration with regulatory entities to assisting with the distributing of SREC payments.

As a SREC Customer Operations Associate, Lauren works directly with customers by registering their solar energy systems and monitoring generation reports for SREC minting with the generation tracking entities PJM-GATS and NEPOOL. Avery, an SREC Operations Associate, verifies meter readings and assists the IT team in improving the customer dashboard.

Lauren and Avery both started at Sol Systems as interns in the SREC Operations and Marketing teams, respectively. Previously, Lauren worked at the White House Council on Environmental Quality in the Office of Federal Sustainability. Avery has worked at Smart Electric Power Alliance, formerly the Solar Electric Power Association.

Lauren graduated from Georgetown University with a B.S. in Science, Technology, and International Affairs, specializing in energy policy. Her passion for clean energy grew out of a commitment to sustainability that started at a young age. Lauren grew up loving hiking, and her family always emphasized the importance of environmental conservation.

Avery holds a B.A. in Political Science from George Washington University. Renewable energy has always been close to his heart, especially since his father also worked in the renewable energy sector. Avery wants do work that is globally impactful and finds the energy sector as the perfect place to make a positive change.

When they’re not at the office, Lauren and Avery both enjoy music. Lauren enjoys nature by hiking and kayaking, but is also an avid dancer, specializing in jazz and hip hop. Avery almost went to film school and now focuses on photography over filmmaking. He also enjoys spending time outdoors, whether it be kayaking, snowboarding, or cycling.

Please help us in welcoming Lauren and Avery to the team.

Working at Sol Systems

Interested in becoming a member of the Sol Systems team? We are currently seeking new employees at all three of our offices, in Washington, D.C., Philadelphia, and San Francisco. To learn more about available solar energy careers with Sol Systems, please visit our careers page.

ABOUT SOL SYSTEMS

Sol Systems is a leading solar energy investment and development firm with an established reputation for integrity and reliability. The company has financed approximately 450MW of solar projects, and manages over $500 million in assets on behalf of insurance companies, utilities, banks, and Fortune 500 companies.

Sol Systems works with its corporate and institutional clients to develop customized energy procurement solutions, and to architect and deploy structured investments in the solar asset class with a dedicated team of investment professionals, lawyers, accountants, engineers, and project finance analysts.

Our Most-Read Articles of 2015

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.

When to Go Local in Lending

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In structured finance or cash deals, regional or local lenders may have more competitive offerings than a national bank or debt provider.

In structured finance or cash deals, regional or local lenders may have more competitive offerings than a national bank or debt provider. Often their rates are cheaper by a point or more compared to the traditional debt players in the industry. Some local or regional players may also be more flexible with loan tenors – and may even offer loans for longer than the PPA term. Finally, local lenders may be more comfortable with various state and regional risks, like solar renewable energy credits (SRECs) or other incentives that larger banks may not underwrite.

Local relationships matter. Local lenders may be mission-based in such a way that benefits solar investments. Existing relationships may also make the difference for a developer/investor; for example, developers seeking affordable debt might want to take a look at existing lending relationships at the corporate level or with the host customer. A local lender is more likely to provide an attractive offering if they already understand and work with the parties in question, even if they are unfamiliar with solar generally. Developer and investors alike may be pleasantly surprised with the affordability and flexibility.

For mainstream, clean-cut projects, it is still best to work with institutional lenders capable of writing big checks and handling the complexity of other parties at the table, like tax equity investors. If you have a debt partner already, it is best to hold onto that relationship and not let them go; there is a dollar value one can put on efficiencies that arise from repeat business. But if you are working on a project that falls outside of the typical 5MW+ box, especially in a common solar state, it may be a good idea to think local.

This is an excerpt from our August 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 262MW 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.

SOURCE: The Sol Project Finance Journal, August 2015

2015-04-29-Sol-Cover-Banner2

SOURCE is a monthly solar project finance journal that our team distributes to our network of clients and solar stakeholders. Our newsletter contains solar statistics from current real-life solar projects, trends, and observations gained through monthly interviews with our solar project finance team, and it incorporates news from a variety of industry resources.

Below, we have included excerpts from the August 2015 edition.  To receive future Journals, please email pr@solsystems.com.

PROJECT FINANCE STATISTICS

The following statistics represent some high-quality solar projects and portfolios that we are actively reviewing for investment.

Combination

*Our all-in price statistics exclude projects from Ontario, Hawaii, the U.S. Virgin Islands, and Puerto Rico where all-in prices remain over $3.50/W.



PPA-RATE-Aug

STATE MARKETS

Georgia – We’ve got Georgia on our minds, and you should too. Bids for Georgia Power’s Advanced Solar Initiative Distributed Generation (ASI DG) Program, which aims for 100MW of solar, closed on August 10. Yet, one of the three bidding groups, Group C, encompassing systems under 100kW, came in undersubscribed. Developers will have until October 27 to find sites to fulfill the remaining 5.7MW. Want to succeed in this bidding group? Aggregate these projects into a 1MW+ portfolio to make them more attractive to investors.  With investment grade offtake, low build costs, and high solar irradiance, these deals should be promising. Meanwhile, third party financing is now live in the Peach State (thank you, HB 57!). Due to net metering restrictions, these projects are most attractive when behind the meter.

Massachusetts Step in line to grab your seat on the solar coaster. In July, State Senator Downing introduced legislation to raise the net metering caps until the state’s 1600MW goal is met. Then, on August 7, Governor Baker introduced his own legislation to raise the caps by 2%. National Grid estimates that Governor Baker’s cap increase would only last the solar industry until October. If you’re thinking that would bring us back to where we are right now in just a couple months, you’re right.

Even more, the Governor’s bill would transition solar from a net metering credit valued at the full retail rate to an avoided cost rate after the 1600MW goal is met. Undoubtedly, this would deliver a long-term blow to the Commonwealth’s solar industry. Massachusetts developers, why aren’t you looking at smooth, reliable, sustainable Maryland again?

New York – We have long heralded that the Megawatt Block is a beautifully designed incentive program – if only rates were high enough for projects to pencil. Since opening in May, its commercial and industrial (C&I) block for projects over 200kW has produced merely 4MW of deals in Con Edison territory, and about 17MW in the rest of the state; the overall capacity potential for the first block is 135MW. To understand how underwhelming the results have been thus far, compare it to Massachusetts, which can fill another 205MW cap increase in NGrid territory by October. Each incentive block will need to be raised by approximately 20 cents if the Empire State’s C&I market is going to take flight. Until then, it’s still stalled for takeoff.

SOLAR CHATTER

  • Hillary Clinton is calling for a 700% increase in solar production by 2020. Is this realistic without an ITC extension?.
  • Massachusetts is not the only state whose growth is threatened by a net metering cap. New Hampshire, which took over a decade to reach 2MW of solar production, is nearing its 50MW net metering cap. Unlike Massachusetts, however, legislative action appears unlikely, at least for now. Too bad; this New Hampshire heavy office was digging that C&I rebate program for projects up to 500kW.
  • Still think YieldCos are solar finance’s magic wand? TerraForm’s shares dropped 17% after its August 6 earnings call, and the debut of TerraForm Global fell short of expectations – currently selling at $10.20 per share. After going public at $21 per share, 8Point3 Energy Partners now trades just above $15.
  • The Latin American solar market continues to boom, with over 363MW of utility-scale solar coming online in Q2 2015.
  • Back from the dead? Commercial deals are starting to re-emerge in Hawaii after the Public Utilities Commission forced Hawaiian Electric Co. (HECO) to release the queue of interconnections that they froze last year. Proper diligence on the distribution circuit should still be conducted when one is applying for interconnection, and it is still important to set expectations; interconnection will still take much longer than it does in other states.
  • Changes to Pacific Gas & Electric’s A-6 tariff have been delayed until the end of 2016. The changes may still slash economics for Northern California projects in the 75kW – 500kW range by about 30%, according to Sage Renewable Energy Consulting.
  • It’s hot over there, yet the solar market is freezing. In Arizona, proposed changes to net metering would compensate facilities at wholesale rates for excess generation. Tucson Electric Power (TEP) withdrew this request but plans to pursue it once again for a 2017 rate case, and, here’s the kicker – they will request for the change to be retroactive to June 2015. Expect for this uncertainty to chill the market. Many developers that we work with are already flocking outside of Arizona in search of better opportunities.

ABOUT SOL SYSTEMS

Sol Systems is a solar energy finance and investment firm. The company has facilitated financing for 262MW 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.

Employee Spotlight: Jason Cimpl, Director of Trading

“Our team is changing the way solar is financed, and the industry is small enough where the ripples we make are felt by everyone in the water.”

“Our team is changing the way solar is financed, and the industry is small enough where the ripples we make are felt by everyone in the water.”

Over the past seven years, Sol Systems has grown from two college friends with a bright idea to an industry leader in solar project finance with offices in San Francisco, D.C., and Philadelphia and nearly 50 full-time employees. We’ve brought some of the industry’s most talented professionals along for the ride, and we want you to get to know them. Meet Jason Cimpl, Sol Systems’ Director of Trading. Jason got his MBA at the University of Wisconsin and hasn’t looked back since.

What got you interested in the solar industry?

Before I came to Sol Systems, I was doing equity research here in D.C. I was naturally a good trader, and solar appealed to me because it’s a relatively new market with only a few players. Plus, I’m a big a believer in renewables.

Now that I’ve been in the industry for a few years, I really feel like I’m on the ground floor of something special. In solar, you can have a noticeable impact on a technology that’s not only beneficial to society, but one that’s going to scale tremendously.

What do you like most about working at Sol Systems?

Figuring out ways that solar renewable energy credits – or SRECs – can finance solar projects has been fun and challenging. It’s required building a team to better understand the SREC markets, and Sol Systems gives us the ability to take smart risks. SRECs are exciting because they’re more than just a tradable commodity – they are a true incentive. Successful traders make a capital gain on the trade and finance a solar project. Equities, debt, or other commodities don’t have the same social impact, which has made learning the SREC market so exciting.

Beyond that, Sol Systems gives you the freedom to take professional risks as a person, no matter what gender or age you are. Regardless of what level of experience you have, Sol Systems says, “Hey, we’re going to treat you as equal if you have a good idea. We’re going to allow you to grow and we’re going to take your idea seriously.” You can’t really find that type of culture anywhere else. Our team is changing the way solar is financed, and the industry is small enough where the ripples we make are felt by everyone in the water.

What’s one thing about the solar industry you’d like to see change?

When I think of all of the incentive packages that exist for conventional fuel sources, I don’t see why solar shouldn’t be given similar support. Solar is a proven technology that has widely accepted economic and social benefits. As proof, many big businesses advocate for the use of and investment in solar.

What do you like to do when you’re not trading SRECs?

Anything that’s outdoors, really. Sol Systems is a pretty athletic office, so there’s always something active to do with the team. I think my ideal outdoor activity would be biking 40 miles in one direction and then taking an Uber home.

Sol Systems is currently seeking an asset manager and fall interns. To learn more about solar energy careers with Sol Systems, please visit our careers page.

ABOUT SOL SYSTEMS

Sol Systems is a solar energy finance and investment firm. The company has facilitated financing for 262MW of distributed generation 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. For more information, please visit www.solsystems.com.

Sol Systems Offers New SREC Contract. Meet Sol Combo

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Sol Systems offers four SREC monetization options: Sol Upfront, Sol Brokerage, Sol Annuity, and now, Sol Combo.

Solar Renewable Energy Credits (SRECs) are a confusing, yet critical, piece of solar finance for solar energy system owners and installers alike. To solve for this, Sol Systems offers four SREC monetization options: Sol Upfront, Sol Brokerage, Sol Annuity, and now, Sol Combo.

For many customers, deciding how to handle the solar renewable energy credits (SRECs) generated by their exciting new rooftop power plant can be tricky. Are they the kind of person who will lock in a price for the long term, saving themselves time and energy and adding greater certainty to their financial planning? If so, Sol Annuity is the best option.

Another type of customer is one who likes to play the volatile spot market and take some risks for the chance of scoring a higher short-term return. If so, Sol Brokerage is the best option.

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What Game Theory Can Tell Us about Middle Market, C&I Solar

The decisions made along the path of solar project finance and development have major implications for the growth –or stagnation—of the commercial and industrial solar market.  How does a developer choose the right financier for their project, or an investor decide to interact during contract negotiations? Together, what impacts do these decisions have on the value chain?

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Massachusetts Updates 2016 Managed Growth Allocation, Developers Still on Edge

Massachusetts solar developers breathed a sigh of relief after last week’s announcement.

Some developers of 650kW+ solar projects may get their projects built after all.

Some developers of 650kW+ solar projects may get their projects built after all.

After the initial August 26th announcement that the 2016 Managed Growth Capacity Block would be 0MW, the Massachusetts Department of Energy Resources (DOER) opened a public comment period.  As expected, solar stakeholders expressed their concern over the 2016 allocation, citing that the DOER had projected overly ambitious growth in Market Sectors A-C. In response to these comments, DOER adjusted the 2016 Managed Growth Capacity Block allocation from 0MW to 20MW .

What is Managed Growth in Massachusetts?

The Massachusetts SREC-II Program, initiated in April, creates differentiated financial incentives for each market sector (“SREC Factor”) to level the playing field. This program makes smaller solar projects more competitive compared to larger ones by ideally giving financial preference to residential and rooftop projects (a higher SREC Factor close to 1.0) and providing less support for larger projects (ground mount, landfill or brownfield projects less than 650kW.) Previously, this program allocated 26MW and 81MW for the Managed Growth sector in 2014 and 2015 respectively.  As the legislation mandates, the reconsideration and final decision of the 2016 Managed Growth Capacity Block came from the following formula:

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Summary of the Clean Power Plan & Positive Impacts on the Solar Industry

At the direction of President Obama, the U.S. Environmental Protection Agency released the Clean Power Plan, also known as 111(d) on June 2.  It is the first time the U.S. government has sought to cut carbon pollution from existing power plants.  In summary, by 2030, the EPA’s proposed steps should cut national carbon emission from the power sector by 30% – as measured against 2005 levels.

The proposal provides guidelines for states to develop plans to meet state-specific goals to reduce carbon pollution and gives them the flexibility to design their own programs. States can choose a mix of generation using diverse fuels, energy efficiency, and/or demand-side management. States can also choose to work alone to develop individual plans or with other states to develop multi-state plans.

Ultimately, as we look into our crystal ball, we see a large increase in the number of rate cases that utilities bring before their state’s Public Utility Commissions, and subsequent changes in the way utilities are regulated. We also see the following positive impacts for the solar and energy efficiency industries:

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Ohio Becomes the First State to Freeze its Renewable Portfolio Standard

The passage of Senate Bill 310 (SB310) has frozen Ohio’s Renewable Portfolio Standard until 2017, making Ohio the first state to roll back renewable energy and efficiency measures.

The passage of Senate Bill 310 (SB310) has frozen Ohio’s Renewable Portfolio Standard until 2017, making Ohio the first state to roll back renewable energy and efficiency measures.

With the signing of Senate Bill 310 (SB 310), Ohio has become the first state to “freeze” its Renewable Portfolio Standard (RPS). Ohio Governor John Kasich signed the bill into law on June 13th, effectively halting the state’s mandates for efficiency and renewables until 2017. Come 2017, these mandates will pick up where they left off when the freeze occurred, as opposed to the annual increases in renewable energy and efficiency measures that would have occurred with the RPS.

SB310 will significantly harm Ohio’s solar industry by driving SREC prices down in both the Buckeye state as well as the surrounding states such as Kentucky, Pennsylvania, West Virginia, Indiana, and Michigan that sell their SRECs into Ohio. The bill faced tremendous opposition from health and environmental coalitions, as well as a group of 70 businesses and organizations, including Honda and Whirlpool, who urged Governor Kasich not to sign the bill.

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Formal Rulemaking Process Begins for Massachusetts SREC-II Program

On January 3, 2014, the Massachusetts Department of Energy Resources (DOER) announced that they filed revisions to the Renewable Portfolio Standard (RPS) Class I regulation, thus beginning the formal rulemaking process for establishing a framework for the SREC-II program.  The official version of the draft regulation will be published in the Massachusetts Register on January 17, 2014, but in the meantime, the DOER has provided an unofficial version on their website.

Timeline for the Formal Rulemaking Process

The formal rulemaking process begins with a public comment period which includes holding a public hearing.  Written public comments will be accepted from January 3 through 5:00pm on January 29, 2014 and the public hearing will be held on January 24, 2014 from 1:00 to 3:00 pm in the Gardner Auditorium of the Massachusetts State House in Boston.  Following the public comment period, the DOER will submit this proposed final regulation to the Joint Committee on Telecommunications, Utilities and Energy and will incorporate any changes deemed prudent from the public comments.  Within the following 30 days, the Joint Committee will review and submit comments on the regulation back to the DOER.  To conclude, the DOER must consider the Joint Committee’s comments for a period of not less than 30 days, and thereafter, the final regulation will be promulgated as soon as possible.  Based on the estimated outline in the table below, the SREC-II program should become effective in April 2014.

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Everything You Need to Know about the Most Recent Updates to Massachusetts SREC II

Massachusetts Department of Energy Resources (DOER) Commissioner Mark Sylvia recently shared the DOER’s most recent developments regarding its SREC II program.

Massachusetts Department of Energy Resources (DOER) Commissioner Mark Sylvia recently shared the DOER’s most recent developments regarding its SREC II program.

Massachusetts Department of Energy Resources (DOER) Commissioner Mark Sylvia recently shared the DOER’s most recent developments regarding its SREC II program with a packed house at the recent Electricity Restructuring Roundtable on Solar in New England and California.  The official draft has not been published for the public, but is expected to be filed any day now.  Here’s what you need to know.

  1. SREC-II Policy Objectives: Unchanged

The overall policy objectives remained unchanged under this most recent draft. The DOER’s main goals are still to provide sufficient economic support, control ratepayer costs, and create competitive, robust, and progressive market conditions that will maintain and expand PV installations in Massachusetts to reach Governor Deval Patrick’s 1600 MW goal by 2020.  The most significant updates and changes to the original SREC-II draft regulations came instead in the announcement of the key design features, which will drive the structure of the SREC-II Program.

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Ohio’s Renewable Portfolio Standard under Attack… Again

The Ohio SREC market in 2013 is projected to be more than two times oversupplied with an expected 129,000 SRECs to be issued compared to a demand of only 60,000 SRECs.

The Ohio SREC market in 2013 is projected to be more than two times oversupplied with an expected 129,000 SRECs to be issued compared to a demand of only 60,000 SRECs.

As the Ohio General Assembly approaches the final few months of its 2013 legislative session, attention has been brought to the Senate Bill introduced to repeal the state’s Renewable Portfolio Standard. Ohio State Senator Kris Jordan introduced Senate Bill 34 (SB 34) which, if passed, would “repeal the alternative energy resource requirements imposed on electric distribution and electric services companies to provide, by 2025, 25% of their electric supply from alternative energy.” To put it simply, if passed, this legislation would repeal Ohio’s Renewable Portfolio Standard (RPS), and the Ohio SREC market would be dismantled.

This is not the first time that Senator Jordan has attacked the Ohio RPS; similar legislation was introduced by Senator Jordan in 2012, but those previous bills failed to gain any support.  It remains to be seen how SB 34 will move forward in this current legislative session, as it has only been assigned to the Public Utilities Committee. A hearing has yet to be scheduled.

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Sol Systems to Speak at Distributed Solar Summit 2013

Sol Systems to Speak at Distributed Solar Summit 2013

Sol Systems George Ashton and Andrew Gilligan to Speak at Distributed Solar Summit 2013

Another week, another conference.

Next week, Sol Systems will speak at the Distributed Solar Summit in San Diego, California. Sol Systems CFO, George Ashton, and Senior Associate, Andrew Gilligan, will both be featured on Monday, November 18 during the U.S Distributed Solar Markets: Outlook and Analysis portion of the conference. George will speak about policy and incentive frameworks in New Jersey’s solar market. Andrew will discuss the solar policy and incentive frameworks in New York.

Developers interested in financing options for New Jersey or New York solar projects can contact our project finance team at finance@solsystemscompany.com or (888) 235-1538 ext. 2.  Our team is happy to discuss your project with you and assess financing opportunities. Solar installers with customers in need of SREC options in New Jersey can contact our SREC services team at info@solsystemscompany.com or (888) 235-1538 ext. 1.

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Sol Systems Welcomes Bridget Callahan

Sol Systems Welcomes Bridget Callahan

Sol Systems Welcomes Bridget Callahan to help with the firm’s SREC operations and analytics.

Sol Systems is continuing to expand to accommodate its rapid business growth. This week, Sol Systems is proud to announce the arrival of our new SREC Operations Analyst, Bridget. Welcome to the team, Bridget.

Bridget Callahan joins Sol Systems after graduating from the University of Michigan. Prior to joining Sol Systems, Ms. Callahan worked with the State of Michigan, as well as with several environmental non-profit organizations. As SREC Operations Analyst, Ms. Callahan answers inquiries for Sol Systems’ 4,000 person customer network, manages customer meter readings and production monitoring, conducts policy research and analysis, and interacts with the various public utilities commissions for SREC registrations. She holds a Bachelor in Arts in Public Policy from the Gerald R. Ford School of Public Policy, with a concentration in environmental policy.

At Sol Systems, our biggest asset is our team, and we will continue to hire sharp, passionate team members. We are currently hiring for a Controller. To learn more about careers with Sol Systems, please visit our careers page.

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Massachusetts SREC-II Market Outlook – The New Market Equilibrium?

Sol Systems has put together a prospective view of the supply and demand dynamics of the SREC II market in Massachusetts, based on the DOER’s recent presentation of proposed policies for the program.  The principle takeaway for solar developers in the MA market is that the SREC Factor they bid in a competitive solicitation for projects in the ‘Managed Growth Sector’ will need to be determined at the time of bidding, as the SREC-II market dynamics will be ever-evolving.  They should do this by analyzing the market using the project and SREC data that the DOER is promising will be extensive in the SREC-II program.  This should give project owners assurance that they will not have to blindly determine a competitive SREC Factor to bid for their projects.  

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Legislation Introduced in 2013 to Increase the Pennsylvania Solar Carve-Out

On February 25, 2013, Representative Greg Vitali introduced House Bill (HB) 100 to the Pennsylvania House of Representatives, legislation that would amend the Pennsylvania Alternative Energy Portfolio Standards. HB 100 was later referred to the House Environmental Resources and Energy Committee, and hearing has not yet been scheduled. If passed, HB 100 would take steps to revive the suffering PA SREC market. Similar legislation (HB 1580 and SB 1350) was introduced to the PA legislature in 2012; however, neither of these bills made significant progress in the General Assembly.

The original Pennsylvania Alternative Energy Portfolio Standards Act currently requires Pennsylvania’s electric utilities to obtain eight percent of their power from renewable sources by 2021, and of that eight percent, 0.5 percent of their power must be generated by solar energy systems.

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PUCO Releases New Generation Start Date Eligibility

The Public Utilities Commission of Ohio (PUCO) recently ruled on changing the generation start date for all eligible renewable energy resource generating facilities submitted for approval to the PUCO in 2013.

The Public Utilities Commission of Ohio (PUCO) recently ruled on changing the generation start date for all eligible renewable energy resource generating facilities submitted for approval to the PUCO in 2013.

The Public Utilities Commission of Ohio (PUCO) recently ruled on changing the generation start date for all eligible renewable energy resource generating facilities submitted for approval to the PUCO in 2013.  For all applications received after December 31, 2012, all facilities submitted to the PUCO for approval will have a generation start date of the date the application was filed with the PUCO.

Credit will not be given for generation that occurred before the date of the facility’s application for certification as an eligible Ohio renewable energy resource generating facility. Facility owner’s will be able to report generation from the date of application for Ohio’s purposes, unless the facility is not yet online, in which case the facility owner can begin reporting from the in-service date.

Previously, solar facilities submitted to the PUCO for approval would receive a generation start date beginning on the date the application for the system was approved by the PUCO (which is 61 days after the date filed), or a facility could receive retroactive credit back to the date the facility began reporting so long as there was supporting documentation from a remote monitoring system.  Solar facilities will no longer be able to submit remote monitoring information or documentation to the PUCO for retroactive credit.

This generation start date change will only affect facilities located in OH and adjacent states. Sol Systems has reviewed these generation start date changes and is making the necessary changes to our registration service to allow for timely registration of solar facilities to the PUCO.  Please continue to follow our blog for any further updates to the registrations process.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry.  Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes.  Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.