Sol Systems’ new profit share contract offers solar renewable energy credit (SREC) customers the option to maximize value while making a positive impact on the community.
SREC owners often face the challenge of choosing between the high risk and potential reward of selling their SRECs on the volatile open market versus locking into a long-term, fixed-rate contract that promises a predictable cashflow over a specific term. Sol Profit Share, Sol’s newest SREC offering, takes the risk out of the higher market value option while allowing customers the added benefit of reinvesting in communities that need it most.
Sol Profit Share is still, at its heart, a fixed price annuity contract set over a fixed term. What makes Sol Profit Share unique is that while the fixed price shields customers from potential downswings in the market, it also allows customers to make additional profit during the upswings. In addition to a guaranteed fixed rate price, the contract identifies a “strike” price that acts as a threshold number for determining profit share bonuses. In the event that Sol is able to sell SRECs above the strike price identified in the Sol Profit Share contract, the customer and Sol will share in any additional profit above the strike at a percentage. The specific percentage share will be identified in the customer contract. And Sol Systems will donate 5% of its Sol Profit Share net profits to non-profit organizations working to supporting renewable energy access and sustainability.
Let’s see how this contract would work in a few different selling scenarios:
- Fixed price: $100
- Strike price: $110
- Percentage Share: 50/50
Sale Price: $95 – Customer receives $100
Sale Price: $100 – Customer receives $100
Sale Price: $110 – Customer receives $100
Sale Price: $120 – Customer receives $105
Sale Price: $140 – Customer receives $115