April 2015 Solar Project Finance Journal

15 Apr 2015

This month's Project Finance Journal details the Illinois, New York, and Massachusetts solar markets, as well as the latest PPA rates in all commercial solar markets.

This month’s Project Finance Journal details the Illinois, New York, and Massachusetts solar markets, as well as the latest PPA rates in all commercial solar markets.

Sol Systems’ Solar Project Finance Journal is a monthly email newsletter 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 April 2015 edition.  To receive future Journals, please email pr@solsystems.com.


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

Capacity: 98kW – 26MW
Average Capacity: 2.54MW

Developer all-in (asking) prices*

  • <500kW:  $1.75 – 3.30/Watt
  • 500kW–2MW:  $1.97 – 4.34/Watt
  • >2MW:  $1.89 – 3.00/Watt

*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 rates & escalators (20-year terms unless noted) **

  • CA:  8 – 17 cents/kWh with escalators between 1.5-3%
  • CT: 12 – 13.5 cents/kWh with 2% escalator
  • HI: 17 – 22 cents/kWh with 0-2% escalator
  • MA:  5.9 – 13.5 cents/kWh with 2% escalator
  • MD: 8 – 9.5 cents/kWh with 2% escalator
  • NJ: 4.5 – 12 cents/kWh with 2% escalator
  • NM: 7 – 9.5 cents/kWh with 2% escalator
  • NY: 7 – 17 cents/kWh with 2% escalator
  • VT: 13 – 13.5 cents/kWh with 2% escalator

**With the exception of California, projects rely upon additional state incentives, grants, or an SREC/ZREC contract.

Recent Feed-in Tariff Rates (20-year terms unless noted)*

  • CA: 14 cents/kWh with no escalator (LADWP)
  • GA:
    • 8-9 cents/kWh with no escalator (Georgia Power)
    • 13 cents/kWh with no escalator (Georgia Power)
  • IN: 20 cents/kWh for 15 years with no escalator (IP&L)
  • RI: 18.5 cents/kWh with no escalator (National Grid)

*Please note that these statistics are representative of projects we are reviewing for investment. This is not an all-encompassing list of all feed-in tariffs in the market, and some of these programs have since closed.


Illinois: The Illinois solar market is ready for take-off. Well, almost. The Illinois Power Agency will procure $30 million in SRECs from Illinois-sited systems this June and November, and in March 2016. In June, our team will submit bids on behalf of customers in both categories: <25kW, and 25kW – 500kW. To qualify for the Procurement, systems must be energized after January 21, 2015. Our form SREC contracts will be released in mid-May along with IPA’s. Developers seeking information on the program should contact Eric.stam@solsystems.com. You can also learn more about the structure of the Procurement in our February Journal

Massachusetts: Massachusetts developers may need an aspirin after National Grid’s public and private net metering caps have been hit. An emergency provision has temporarily lifted the private cap by a little over 16MW; however, there is a flood of projects hitting the market and the waiting list for National Grid’s private allocation is already a mere 330kW shy of the available capacity. This clog, even after the emergency relief, will slow development in the state’s most popular utility territory for solar. Massachusetts developers working in National Grid are better off mothballing their projects until legislative action resolves the issue. The net metering task force in due to issue recommendations at the end of April, but action by elected officials will take months longer. We recommend developers pursue deals in NStar territory, where net metering capacity is plentiful, but host sites are challenging to secure given the shortage of suitable sites in the Greater Boston area.

New York: When NYSERDA announced on March 26 that they were withdrawing their >200kW Megawatt Block program to significantly revise its levels and methodology, we were optimistic. Unfortunately, the revisions still fall short of expectations. Colin Murchie, Director of Project Finance at Sol Systems, explains this in another article


  • We’ve recently seen some unattractive development capital offers that demand hedge fund-like returns for projects that are fully permitted and interconnection approved. However, either take-out financiers or construction lenders can offer significantly better terms. As the old paradox goes, “banks love to lend to people who need it the least.”
  • Minnesota is seeing large portfolios go to market for financing. Yet, the interconnection process may be holding up many of these deals due to bottleneck from the massive amount of megawatts slated to come online this year and next.
  • The industry is starting to get excited for California’s storage market and the implications it may have for the rest of the country.
  • Developers looking toward structured finance transactions for the first time will have a higher likelihood of attracting a tax equity investor if their team is experienced (especially with asset management), they have a large pipeline, and the developed deals are clean…maybe even tied up with a bow.
  • North Carolina state legislators are pushing for the extension of the state tax credit. We’ve heard rumors that it is very likely to pass. 
  • Process is key to scaling the commercial and small-utility scale markets. Companies that are trying to grow too quickly without keeping their operations up-to-speed may be in danger of risking their reputation with financiers.


Sol Systems is a solar energy finance and investment firm. The company has facilitated financing for 180MW 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.


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Sara Rafalson

Sara Rafalson