The first round of the Vermont Sustainably Priced Energy Enterprise Development (SPEED) program in its new competitive form will close on May 1st of this year. In March, the Vermont Public Service Board altered the structure of the standard offer program in Vermont, reducing the avoided-cost ceiling rate for solar projects and changing the mechanism used to determine which projects receive the offers. The ceiling rate for solar PV systems dropped to $0.257/kWh down from $0.271/kWh. This new rate is based upon a renewed analysis of the costs of solar production. Some fear that this price is based too extensively on the expected decrease in solar costs, as efficiency in the industry grows; however, this rate remains strong in comparison to other states. All avoided-costs for other energy sources have not been altered.
The Public Service Board in its deliberations on the changes found a market-mechanism approach to be legal according to federal standards, and subsequently established a request for proposal (RFP) system in order to award contracts. Developers will submit a bid for the electricity rate they desire for their project, with a maximum rate determined by the avoided-cost structure for each energy source. As previously mentioned, in Vermont this ceiling has dropped from $.271/kWh to $.257/kWh. The new structure benefits larger projects and well-established developers, and will result in tighter margins and increased competition to the Vermont market. The size limit for individual systems is 2.2MW AC, and the entire 2013 SPEED program has a cap of 5MW. If more than 5MW of projects apply to the standard offer, the cumulative program will still pay for the excess energy, rolling over the capacity into the next year. Developers have until May 1st to submit their proposals for the rest of the 2013 program, which has about 4.5 Megawatts left to be filled. The request for proposal is outlined here.
Sol Systems actively evaluates and finances solar projects in Vermont and has seen first-hand the success of the Vermont SPEED program. Sol Systems will continue tracking these changes as they develop. To speak to a member of the Sol Systems team regarding project opportunities in Vermont or elsewhere, please contact email@example.com or 888-235-1538 ext. 2.
About Sol Systems
Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.
For more information, please visit www.solsystemscompany.com.