A Look Back at 2017: Illinois, Tax Equity Investors, and a Shifting Federal Landscape

20 Dec 2017

This is an excerpt from the December 2017 edition of The SOL SOURCE, a monthly electronic newsletter analyzing the latest trends in renewable energy based on our unique position in the solar financing space. To receive future editions of the journal, please subscribe.

Since 2012, The Sol SOURCE has been providing readers like you with real-life trends in the world of solar energy development, tax equity investing, policy, and customer trends. As we close out another year and another 12 issues of the Sol SOURCE, we reflect on our most-read articles of 2017, and what these trends say about the shifting tides in the industry at large.

  1. Get Ready – The Illinois Solar Market is Coming

Following the release of September’s Draft Illinois Long-Term Renewable Resources Procurement Plan, we sifted through the 169-page regulatory document, which detailed the solar programs to be created under the Future Energy Jobs Act (FEJA). While FEJA passed over a year ago, rulemaking surrounding the ambitious law ongoing, preparing most programs for [hopefully] a summer 2018 launch. FEJA will create new programs for rooftop solar, community solar, and utility-scale projects (defined as 2MW+ in size).

Our article on the Illinois draft plan was our most-read article of 2017, and we are not surprised; Illinois is poised to be the hottest new market of 2018. Stay tuned to the SOURCE for developments on this new program. Conveniently, you’ll find updates on the plan filed by the Illinois Power Agency (IPA) earlier this month in this month’s SOURCE.

  1. Tax Equity in 2017 – Capital Demand Shift

Much can change in a year. In early 2016, we discussed how the federal investment tax credit (ITC) extension at the end of 2015 would require more expensive tax equity to stimulate market growth. We expected to see, as usual, an oversupply of projects compared to the limited supply of tax equity investors.

However, in 2017, we saw quite the opposite. This year, there has not been enough large, investment-grade projects to fill the demand of tax equity investors for third-party structured finance deals. The culprits? Crowded utility interconnection queues in new and incumbent markets, changes to PURPA, the Suniva trade case, and regulatory uncertainty in established markets such as North Carolina, Massachusetts, and Maryland. Additionally, despite the threat of tax reform, solar’s maturation as an asset class has brought new investors to the space, increasing competition for the “top of the line” projects.

What’s in store for the tax equity market in 2018? Keep your eye on tax reform to tell.

  1. The Shifting Solar Incentive Landscape

When President Trump was elected, many said not to worry, as most renewable energy development is driven at the state level, and energy trends are changing in our favor (remember the “Trump Can’t Stop the Clean Energy Revolution” piece in Bloomberg?). With the ITC extended in December of 2015, what more could we need at the federal level? While this is fundamentally true, one cannot deny that the solar industry has seen some headwinds under the new administration. The U.S. has exited the Paris Climate Accord, the Suniva trade case has driven up pricing of solar modules, tax reform is looming, the Department of Energy wants to bail out coal and nuclear, and there are murmurs of PURPA reform at the federal level. Given these federal trends, unsurprising, our articles about tax reform and the trade case hit the top of the charts.

Despite these headwinds, however, one trend sticks out: solar continues to win. At the beginning of 2017, The Solar Foundation reported that solar now employs 260,000 Americans, and given the growth of utility-scale solar in rural areas, many of these jobs are in red districts. The Energy Information Agency shows that PV output in 2017 has grown 47% over the same period in 2016. And, while the latest Solar Market Insight report estimates that 2017 installations will be down 17% from record-breaking 2016, total installed solar PV is expected to triple over the next five years.

Can’t stop won’t stop; watch out, 2018.

That’s a wrap on 2017. For fun, and to reflect on how much has changed in a year (for better or worse), check out our top articles of 2016 and 2015.


Sol Systems, a national solar finance and development firm, delivers sophisticated, customized services for institutional, corporate, and municipal customers. Sol is employee-owned, and has been profitable since inception in 2008. Sol is backed by Sempra Energy, a $25+ billion energy company.

Over the last eight years, Sol Systems has delivered 650MW of solar projects for Fortune 100 companies, municipalities, universities, churches, and small businesses. Sol now manages over $650 million in solar energy assets for utilities, banks, and Fortune 500 companies.

Inc. 5000 recognized Sol Systems in its annual list of the nation’s fastest-growing private companies for four consecutive years. For more information, please visit www.solsystems.com.

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Sara Rafalson

Sara Rafalson