December Solar Project Finance Statistics

17 Dec 2012

Every month, Sol Systems distributes a newsletter, the SolMarket Project Finance Journal, to our community of solar developers and investors. The journal features solar finance statistics, trends, industry news, and information about SREC markets that we garner from our relationships and experience aggregating SRECs and financing commercial and utility scale solar projects via SolMarket.

We have included excerpts from our December SolMarket 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 for which you are seeking financing, please contact the SolMarket team at We would love to hear from you.

Project Finance Statistics

Characteristics of “Hot Projects” on SolMarket

Capacity: 149 kW – 3 MW

Average capacity: 1,275 kW

Competitive EPC Costs: We have seen a continued fall in EPC costs.  Where costs used to be at $2.75-$3.00, we are now seeing costs of $2.25 to $2.50 – or even as low as $2.10. These decreases will be increasingly necessary as local incentive programs and SREC prices continue to fall.
PPA rates:

  • DE:  9.9 cents/ kWh (20 year term; 2% escalator)
  • MA: 8.6 cents/ kWh (20 year term; 1.5% escalator)

Feed-in Tariff rates:

  • FL: 29 cents/ kWh (20 year term; no escalator)
  • NY: 22 cents/ kWh (20 year term; no escalator)
  • RI: 32.2 cents/ kWh (15 year term;  no escalator)

Characteristics of Recently Funded Projects

Capacity: 1,000 kW – 12,000 kW
Average capacity:  1,159 kW
Average cost (all-in): $3.27/ Watt
Locations:  AZ, CA, CO, DE, GA, MA, MD, NJ, NC, OH, PA, TN, TX

Trends and Observations

New SolMarket Investor with Interest in Projects in 50 kW – 500 kW Range

Sol Systems is working with an investor who is evaluating projects in the 50 kW – 500 kW size range, particularly projects in DC, MA, and MD.  This investor has tax appetite, experience investing in solar, and is comfortable with the underwriting and acquisition process.  As always, a given project will be more attractive to this investor if it can be grouped with similar projects into a 1 MW+ portfolio.  For example, a given project would ideally be grouped with projects that have the same incentive regime, energy offtaker, set of legal documents, or host.

The Limiting Factor in Solar Development: Tax Appetite

Through our daily communications with solar developers and investors, we are constantly reminded that tax appetite is the limiting factor for solar project development.  This challenge has become more pronounced with time given the expiration of the Section 1603 Grant in lieu of investment tax credit in December 2011.  While there are corporations with significant federal tax liability, there are two main limitations on getting these entities to invest in solar: lack of familiarity with solar as an asset class and a lack of familiarity with tax investment structures.  Additionally, there is a risk that a corporation’s federal tax appetite itself will contract if we hit the fiscal cliff and face another economic recession in 2013.  Our SolMarket team is bringing on new (non-banking) corporate investors who have not invested in large scale solar in the past, and we are educating these investors on risks, helping them address them, and working in concert with them to build portfolios of high quality projects.

SolMarket Investors Seeking Projects in Connecticut & Vermont

Projects in the Vermont SPEED program are starting to get attention from our investor clientele.  In particular, projects that have received their Certificate of Public Good (CPG) are generating interest.  The CPG indicates that a project is fully permitted, has a conditional interconnection agreement, and has received a notice to proceed.

There are also three categories of Connecticut projects that may be attractive to our investor network:

  • Connecticut projects that are under 100 kW that have an offtake agreement with a municipal or investment grade host
  • Connecticut projects above 100 kW that were awarded ZRECS in 2012
  • A 100 kW+ site in Connecticut that you plan to submit into the competitive CT ZREC process in April 2013

Please reach out to the SolMarket team if you have Vermont or Connecticut projects that meet these criteria. If you have an LOI or lease/PPA with a credit worthy host, we would be happy to help you set an ZREC bid price and help you identify prospective investors.

North Carolina and Tennessee Valley Authority Solar Markets Proving Tight

We continue to see several stranded projects in North Carolina, where the number of good projects outweighs the number of investors with NC state tax appetite.  Until we are able to bring on an investor with significant state tax appetite, North Carolina will be a challenging market for large scale solar.

We have also seen some portfolios of 2+ MW projects within the Tennessee Valley Authority region; however, the local incentives are not very rich, and the individual project limit of 50 kW makes it difficult to create portfolios with desirable returns.  With falling incentive levels in 2013 and a total program limit of 10 MW, the market will likely become even more difficult in the coming months.

SREC Roundup

SREC pricing did not change for any Sol Annuity and Sol Upfront solutions for the month of December.  If you are interested in our Sol Brokerage clear prices and price movements on the spot market, please view our Q3 SREC clear prices, which were updated at the end of November.

The SolMarket community also has the opportunity to view historic SREC marks and model future marks using their own market assumptions.  To utilize our SREC supply and demand model, please visit

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit

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Sara Rafalson

Sara Rafalson