Every month, Sol Systems distributes a newsletter, the Sol Systems Project Finance Journal, to our community of solar developers and
investors. The journal features solar finance statistics, trends, industry news, and SREC market information. We gather this information from our relationships and experience aggregating SRECs and financing commercial and utility scale solar projects.
We have included excerpts from our May Project Finance Journal below. If you have any questions about this information, wish to receive our monthly newsletter via email, or have a solar project in need of financing, please contact our team at firstname.lastname@example.org. We would love to hear from you.
Project Finance Statistics
Characteristics of “Hot Projects”
Capacity: 300 KW – 3.6 MW
Average Capacity: 1,423 kW
Competitive all-in (asking) prices* currently include:
- <500 kW: $3.00-3.25/Watt
- 500 kW – 2 MW: $2.57-$3.00/Watt
- >2 MW:$2.00-$2.62/Watt
*Price ranges do not include Hawaii projects where competitive costs are currently ~ $4.26/Watt
Average PPA rates:
- CA: 11.7 cents/ kwh with 0% escalator
- CT: 9.0 cents/ kwh with 2% escalator
- DE: 10.1 cents/ kwh with 2% escalator
- HI: 16 cents/ kwh with 2.5% escalator
- MA: 9.9 cents/ kwh with 2% escalator
- NC: 8.3 cents/ kwh with 0% escalator
- NM: 7.5 cents/ kwh with 1% escalator
- OH: 7.5 cents/ kwh with 0% escalator
Average Feed-in Tariff Rates
- NY: 22 cents/ kwh
- RI: 28.4 cents/ kwh
Trends and Observations
2013 Project Crunch Time
It is that time of year when investors can estimate their annual tax appetite, and developers and investors are fixated on the projects that can truly be closed by year’s end, especially with the anticipated expiration of bonus depreciation in 2013. Likewise, Sol Systems’ project finance team is focused on assisting our developer clients in strategically structuring and securing financing for their project portfolios, as well as helping investor clients execute on high-quality project opportunities. In the last month, we have secured term sheets for projects in California, Hawaii, Indiana, New Mexico, New York, Maryland, Massachusetts, and Rhode Island, and we are working diligently to bring 11 transactions, totaling 7.8 MW, to financial close. Please reach out to us if you are either looking for competitive financial solutions or strategic advice to maximize the value of your solar project portfolio, or if you are looking to buy projects.
Markets: What’s Hot
In the last month, we have seen noteworthy project activity in the following markets:
- California: Thanks to high electricity rates, a mature solar industry, and strong legislative support, California continues to be a national leader (Spread the word…the state now boasts more solar workers than actors). Our investors are actively seeking projects in the California market. We have seen some projects that do not even require local incentives.
- Delaware: Delaware’s Procurement Program results were announced, and winning SREC prices were lower than anticipated (average weighted price was below $100/SREC). These SREC prices will make it more important than ever for developers to hold down EPC costs and consider a variety of financing options.
- Hawaii: The Hawaii solar market has been picked over, but it is still thriving. The best new opportunities have unique challenges (most often host credit and interconnection), but our team has been able to work through these factors and is pushing several projects forward.
- Georgia: In general, project margins are thin for projects that won the Georgia Power incentive, but there is competition for these projects nonetheless. In one case, we saw an above-market premium offered for a Georgia project — of course, we are curious to see if the project will be successfully financed.
- New York: As NYSERDA’s deadline looms to demonstrate financing commitments, there has been lots of activity in New York. Projects in the southern part of the state seem to be the most promising.
- North Carolina: A large inventory of projects remains in North Carolina due to the shortage of state tax appetite, but this inventory is leading some to get more creative with financing. In particular, some are trying to utilize financing structures that increase the federal ITC basis and do not rely on immediate utilization of the state tax credit.
A Call for Cali Projects
Sol Systems is actively seeking two types of projects in California on behalf of our investor clients. Please contact us if you have California projects that meet the following criteria.
1. 10-20 MW project (or portfolio) seeking tax equity
- Size: We prefer a single 10-20 MW project, but will consider portfolios that are comprised of projects larger than 1 MW.
- Financing: We are seeking projects that exclusively require tax equity and for which the sponsor equity is already secured.
- Timing: Projects should be in late-stage development and will be placed in service in 2013 or early 2014.
2. Mid-size commercial projects seeking take-out financing
- Size: Each project should be at least 100 kW, but preferably larger.
- Financing: We are seeking projects that require take-out financing. Hosts do not need to be “investment grade” but they will need to provide 3 years of audited financials.
- Timing: Projects would ideally be in placed in service in 2013.
Please reach out to us at 888-235-1538 x2 or email@example.com if you have projects that meet these criteria.
In May, Sol Systems has once again significantly increased pricing for 3 and 5-year fixed price strips in Washington, D.C. Pricing in all the other states remains unchanged this month.
The Sol Systems team offers 3 SREC monetization options: Sol Annuity, Sol Upfront, and Sol Brokerage. Sol Annuity and Sol Upfront options depend on system size and location, while Sol Brokerage is offered to 12 states and can be offered to developers with projects of all sizes.
To learn about our SREC services, please contact us at firstname.lastname@example.org or 888-235-1538 x 1.