Invest In Solar

The Solar Asset Class

The solar project asset class provides rich ground for investors seeking compelling risk-adjusted returns. With respect to real estate and other infrastructure, solar project investments compare favorably from both a risk and returns perspective. As a result, in the past 5 years, institutional investors seeking above-market returns, without sacrificing on the quality of the asset, have invested tens of billions in these assets.

Hyper Growth

Solar installations comprise a small but growing proportion of the electricity generation capacity in America. By the end of 2016, solar is expected to provide 2.8% of all energy in the United States. However, the rate of solar installations increased twentyfold from 2011 to 2015.  In 2015, solar projects accounted for a full quarter of all electricity generation capacity placed into service in the U.S. (U.S. Energy Information Administration). In 2014 alone, the industry financed over $17.8 billion of solar projects. In the first quarter of 2016, 64% all new U.S. electric generating capacity came from solar (SEIA / GTM 2016 Q2 Solar Market Insight). Given this growth, many market observers expect solar to play an increasingly core role in the country’s energy portfolio.

The headroom for growth for solar continues to expand as the costs of developing solar projects decline, lowering the levelized cost of energy (the LCOE) from solar. The LCOE of solar now competes with conventional sources of electricity like natural gas and coal in several state markets.

Risks

The risks of solar project investing can be allocated into three broad categories: credit risk (i.e. electricity purchaser fails to pay), technical risk (i.e. the solar technology fails to produce expected amounts of electricity), and resource variability (i.e. there are fewer sunny days, or less solar resource, than expected). Each of these risks can be material if not sufficiently underwritten.

Investment Strategies to Mitigate Risk

Today, there are several investment strategies designed to provide balances between risk and return specifically for this asset class.

Depending on the investor’s risk and return thresholds, investors considering developing a portfolio strategy can participate across the capital structure as debt, equity, or structured tax equity. Each portion of the capital structure has a unique risk and return profile.

Partner With Experts in the Solar Asset Class

  • Sol Systems has eight years of experience focusing 100% of our time and resources on distributed solar – we do only solar all of the time.
  • We have a team of engineers, lawyers, and asset managers we apply in underwriting and managing each solar project
  • Our experience in the market and relationships translate to the best opportunities for our clients.
  • Aggregate portfolios across multiple states, utility territories, and/or offtakers to diversify risk

 

Contact Us to Access Informational Resources

Learn more about the asset class, or take a brief introductory call to explore how this asset class can fulfill your objectives: info@solsystems.com

Invest In Solar
  • Helios Infrastructure
  • The Solar Asset Class
  • Tax Equity
  • Equity Investments and Ownership
  • Diligent Asset Management

    • Tax Equity

    Congress has set the Investment Tax Credit (“ITC”) for eligible solar projects at 30%. Investment returns (inclusive of tax benefits) are often better than other tax-advantaged investments such as LIHTC. And, distributed utility investments diversify portfolio risk while mitigating project and creditor risks for institutional tax equity investors.

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    Solar Equity Investments and Ownership

    Sol Systems works to acquire projects on behalf of cash equity investors such as utilities and proprietary funds. To date, Sol Systems has delivered over $250 Million of solar projects with Power Purchase Agreements (PPAs) to strategic investment partners.

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    Asset Management

    Sol Systems’ asset management services began in 2008 when the firm started providing SREC monetization services to hundreds of solar installer partners. As the company grew its tax equity and project finance services, our asset management role has matured to provide investors with required third-party support to manage and monitor their assets, and ensure that financial and operational performance meet expectations.

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