Sol Systems, a longtime supporter of MDV-SEIA’s efforts and an active solar stakeholder in the Mid-Atlantic, is proud to be a Platinum Sponsor for the 7th annual Solar Focus Conference. Read our recent interview with the MDV-SEIA conference staff.
MDV-SEIA: Tell us a little bit about Sol Systems.
Sol Systems: As a boutique investment firm and leader in financial innovation within the renewable energy industry, Sol Systems raises and places capital for commercial and utility-scale solar projects by simplifying the origination, diligence, and financing processes for investor and developer partners. In 2008, Yuri Horwitz, our CEO, and George Ashton, our CFO, decided to start this firm after recognizing a lack of awareness regarding government incentives for renewable energy and wanted to find a way to encourage the development of solar energy. Our firm was built on the principle that solar energy should be an economically viable solution and this is a model that still guides us today.
Sol Systems began as a solar renewable energy credit (SREC) aggregator, with a major focus on making SREC markets more liquid and allowing small scale solar project owners to efficiently participate. We revolutionized SREC markets by aggregating SRECs from thousands of small solar energy system owners and then selling large volumes into contracts with energy suppliers, who needed to purchase a quota of SRECs to meet their renewable portfolio standard (RPS) compliance needs. Small solar project owners that could not previously access long term SREC contracts were able to by utilizing our services.
More recently, we have raised capital, including tax equity, to deploy into mid-sized commercial projects, typically an underserved portion of the market. Sol Systems offers today the most optimal path to project financing, reducing the cost of capital for both developers and investors, and promoting standardization to ultimately ensure that more projects are successfully financed and built. To date, we have arranged financing for thousands of projects ranging in size from 1 kW to several megawatts in size and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices, and individuals.
MDV-SEIA: What markets do you operate in?
Sol Systems: For SREC financing, we operate in every SREC market that exists, 13 markets at the moment located along the East Coast and Midwest. For our takeout and tax equity financial services for commercial and utility-scale projects, we operate in all 50 states across the U.S. In the last several months, we have facilitated financing for commercial projects ranging from 227 kW to 1.2 MW in states such as California, Hawaii, D.C., Maryland, New Mexico, North Carolina, and Indiana.
MDV-SEIA: What opportunities do you see for distributed solar on the East Coast?
Sol Systems: Distributed generation is challenging the traditional centralized power model, and the general public and utilities are starting to take note. Solar panel costs have dropped by 90 percent, allowing the technology to become economically viable for those with the capital and tax appetite to monetize the various incentives.
It is clear that solar has tremendous potential. As we see it, the commercial sector is the distributed solar’s greatest opportunity, but we know that commercial solar needs capital and this is where our biggest opportunity lies. By necessity, the future energy landscape will have a lot more clean distributed energy capacity and the infrastructure to support it, and we will play a key role in financing these projects. We are excited to see the future of DG on the East Coast in markets like Massachusetts, Connecticut, Rhode Island, and beyond.
MDV-SEIA: What challenges do you see?
Sol Systems: High transaction costs in the origination, diligence, and financing of renewable energy projects is significantly slowing the evolution and development of the renewable energy industry. Fundamentally, we believe that these renewable energy projects are an asset class, and that to create efficiencies in financing them we must drive standardization practices through the industry. That is why through our project financing services, we are bringing this level of uniformity to project origination and due diligence, ultimately increasing the tempo of project development.
One of the other greatest challenges for the industry is tax equity. We are tackling this by finding additional sources of tax equity, which is critical because a shortage of tax equity often inhibits solar project development. We are committed to expanding the pool of tax equity, and we work closely with first-time solar investors to help them become comfortable with solar as an asset class, and then work to originate and structure transactions that reduce their tax liability.
MDV-SEIA: Whether East Coast or West Coast, which state/utility level programs or policies do you see as being a good model for others to follow?
Sol Systems: It depends. In the last 10-15 years, each state/region has taken its own path in crafting new strategies and structures to fit their local markets, with California leading the way. We have been really impressed with some recent programs that we have seen across the country. SREC markets in DC, MA, MD, and NJ have been extremely successful in driving growth in the solar industry in these states. Outside of the typical SREC markets, many of our investors have been interested in projects within Rhode Island’s feed-in tariff program, Connecticut’s ZREC program, and New York’s NYSERDA program. We have also seen some investor interest in Vermont.
MDV-SEIA: Thank you so much for taking some time to speak with us and sharing your insight on the solar sector. We look forward to having Yuri and George speak on tax equity and SRECs at Solar Focus 2013.
Sol Systems: Absolutely, it is our pleasure and we look forward to attending the conference in November.
About Solar Focus 2013
MDV-SEIA’s Solar Focus Conference is the East Coast’s premier solar energy conference. This year marks the 7th anniversary of the event and to celebrate the milestone, we are planning our largest gathering to date of solar energy leaders and stakeholders. Our 2013 theme, The Sun Rises in the East: The Growth of East Coast Distributed Solar, will provide a unique platform to highlight the unprecedented, exponential growth the solar sector is experiencing in markets such as Massachusetts, Rhode Island, Connecticut, New York, Maryland, D.C., North Carolina, and Georgia.
The event, which will be held on November 11th and 12th in Washington D.C., will draw 400 solar leaders and stakeholders. For full conference details and registration, please visit www.mdvseia.org/solarfocus2013.
About Sol Systems
Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated renewable energy project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has facilitated financing for thousands of projects and hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.
For more information, please visit www.solsystemscompany.com.
Founded in 1984, MDV-SEIA represents the interests of photovoltaic and solar thermal developers, financiers, equipment manufacturers, installers, distributors and component suppliers serving Maryland, the District of Columbia, and Virginia. Our members design, sell, integrate, install, maintain and finance solar energy equipment for residential, commercial and institutional customers throughout the region.
MDV-SEIA delivers on policy formation and advocacy, market representation, networking, education, and additional benefits to our 100+ members representing more than 2,000 direct jobs in our region. In the last few years, MDV-SEIA’s leadership has resulted in increased state requirements as well as increased penalties for non-compliance, creation of a solar thermal market, improvements to net metering, and game changing gains in the deployment of solar.
For more information, please visit www.mdvseia.org.