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.
Whichever way a customer leans, installers must be prepared to help a customer balance their financing needs and their appetite for risk. With this in mind, Sol Systems recently introduced a new product, the Sol Combo SREC contract, which combines some of the benefits of the shorter term returns with more security.
Sol Combo, like our existing Sol Annuity contracts, offers the certainty of fixed quarterly payments for all of the SRECs generated by a customer’s system. However, instead of a single fixed price for the entire contract, the Sol Combo offers a fixed payment with two price levels. Pricing is higher in the first three years of the contract, which provides system owners with larger, faster returns than they could generate with traditional long-term contracts.
For example, with our current December pricing, a customer choosing Sol Combo in the MA II market would receive $266 per SREC for the first three years and $165 per SREC for the remaining seven years (a ten-year contract in total). This type of contract is especially beneficial in the Massachusetts market because Sol’s Annuity generates SREC payments quarterly, while the Massachusetts Department of Energy Resources (DOER) Clearinghouse auction occurs only once per year.
The Sol Combo contract benefits SREC owners who want to lock in a long term price but may hesitate to miss strong current pricing in the spot market. Additionally, Sol Combo decreases the customer’s payback period, or time it takes to recoup their investment. This is especially helpful to installers selling cash systems and looking for ways to improve that metric for the customer.
Sol Systems continues to look for innovative ways to make solar economical and easy. Providing creative, profitable SREC solutions is just one of those ways and we’d love to hear how else we can help make SRECs easy for your customers.
About Sol Systems
Sol Systems is a solar energy finance and investment firm. The company has facilitated financing for 171MW distributed generation solar projects on behalf of Fortune 100 corporations, insurance companies, utilities, banks, family offices, and individuals. It has over $550 million in assets under management as of September 2014. 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.solsystemscompany.com.