Sol Systems successfully placed $15 million in tax equity into two 2.5 MW North Carolina projects on behalf of a Fortune 100 company. The financing arrangement marks the Fortune 100 company’s first investment in solar and provides the solar industry with a new source of tax equity.
The US solar industry is supported by a 30% investment tax credit that generally requires outside investors with profitable businesses to invest in projects, typically known as tax equity. Tax equity is currently the most critical limiting factor in solar project development, and has the potential to limit the growth of the industry in the coming years.
Similarly, although North Carolina has strong solar incentives, including a 35% state tax credit, it remains challenging for developers because state tax investors are difficult to secure. Solar investment tax credits compete directly with state tax credits for several other industries, and much of the 2012 and 2013 appetite has been consumed.
Sol Systems was able to arrange both the state and federal tax credit investor for these projects. “This investment from a non-traditional solar investor demonstrates that the solar asset class is now commanding the attention it deserves as an impactful, profitable, and stable investment,” noted Yuri Horwitz, CEO of Sol Systems. “If our industry is to continue the growth we have all worked so hard to achieve, we must continue to build and diversify the pool of investors.”
FLS Energy, a solar integrator and developer, built the two solar energy systems, which are located in Eastern North Carolina. Sol Systems provided project origination, third party underwriting and investment structuring and facilitated the entire financing arrangement, from project origination to financial close, in just three months. Sol Systems will also assist with post-construction asset management services.