SOURCE: The Sol Project Finance Journal, August 2016

17 Aug 2016


SOURCE is a monthly solar project finance journal that our team distributes to our network of clients and solar stakeholders. Our newsletter contains solar statistics from current real-life solar projects, trends, and observations gained through monthly interviews with our solar project finance team, and it incorporates news from a variety of industry resources.

Below, we have included excerpts from the August 2016 edition. To receive future Journals, please email


The following statistics represent some high-quality solar projects and portfolios that we are actively reviewing for investment.

Have a solar project in need of financing? Our team can provide a pricing quote for you here.




Georgia – Look out world, 1,600 additional MW of renewable energy are coming to the Peach State. At the end of July, regulators approved Georgia Power’s plan to add 1,600MW of solar, wind, and biomass by 2021. Among the 1,600MW will be approximately 1,050MW of utility-scale, under which wind will be capped at 300MW. This provides tremendous potential opportunity for solar, though this very much depends on rates which have made Georgia developers and EPCs among the most unyielding in the nation.

The plans also include 100MW of distributed generation (DG) projects up to 3MW in size, 50MW of customer-sited DG, 200MW of Georgia Power “self-build” projects, and a new 200MW Commercial and Industrial Program, details of which are still to be determined. The 1,600MW boost may increase Georgia Power’s renewable representation from 5 to 12% of the utility’s overall capacity.

Also approved in the same filing were early site studies and permitting for several hundred megawatts of new nuclear capacity (atop the troubled Vogtle 3 & 4 reactors already underway). Indeed, Georgia’s overall carbon dioxide intensity could be significantly lower in the next 4 – 10 years.

Massachusetts – Uncertainty is rampant in Massachusetts as the Commonwealth transitions away from its reigning solar incentive and net metering programs.

SREC II —> ???

The industry is at the edge of its seat awaiting an initial proposal from the Massachusetts Department of Energy Resources (DOER) on the successor program for SREC II. In the meantime, the ever-tolerant DOER has made changes to its Emergency Regulation to provide a four-month construction deadline extension to May 8, 2017 for solar projects demonstrating that 50% of construction costs have been expended by January 8, 2017. These projects will still qualify for SREC II, but receive a lower SREC factor – which creates a tricky balancing act as DOER must try to minimize moral hazard and spur urgency in development while sparing many projects the guillotine. DOER announced draft guidelines on the 15th, and is accepting comments until the 22nd.

Net Metering —> Market Net Metering

Last month, the Department of Public Utilities released its final framework for the transition to market net metering credits – approximately 60% of retail credit. Systems will qualify under the old regime with full retail credit if:

  • They submit an Application for a Cap Allocation (ACA) before the notification date of September 26 at 2pm
  • ACAs submitted before the notification date are deemed complete by the Administrator of the System of Assurance
  • Cap allocation is obtained by January 8, 2017

And of course, residential systems are untouched.

It is critical to remember that the strongly reduced credit will apply only to net export against monthly meter reads. The window may be closing on the heavy net exporting Virtual Net Metering Credit-reselling systems, but onsite systems serving their own load will be more or less unscathed.

Uncertainty Affects the Market

As SREC II and the current net metering regime come to a close, developers are racing toward these respective deadlines. As a result of this rush, there is a shortage of electricians available for AC work as demand exceeds supply. Subsequently, the price of hiring labor for electrical work has become much more expensive. Other challenges include uncertainty over SREC factors and the new solar incentive program, which makes accurate pricing of projects currently under development – or new opportunities –  nearly impossible.

Finally, be sure to pay attention to the results of the August 23 technical session on minimum monthly reliability charges (MMRCs), which may also affect project economics.

New York – On August 1, the New York State Public Service Commission approved the Clean Energy Standard (CES), which will require 50% of the Empire State’s electricity needs to come from clean energy by 2030. Under the CES, NYSERDA will incentivize Large Scale Renewables (LSR) through centralized renewable energy credit (REC) procurements, very much like they have under the current RPS. The major difference will be the size; the annual obligations for REC purchases under the CES will be approximately twice the size of the annual RPS solicitations that occurred between 2011 and 2015. In Million Metric Tons Carbon Equivalent (MMTCE) converted against the baseline generation mix in NYISO and adjusted for inflation, that’s “a lot.”

However, under the REC procurements, solar will compete with wind, biomass, fuel cells, landfill gas, and other eligible Tier 1 sources for 20-year REC contracts. For reference, 116MW were awarded at a weighted average price of $24.57/REC in the 2015 Procurement. 2017 Procurement dates will be announced on December 1.


  • Net energy metering (NEM) 2.0 is upon us in California. In June, San Diego Gas & Electric became the first to hit its NEM 1.0 cap, and Pacific Gas & Electric is expected to follow as early as October. Despite the slight hit to project economics, the new regime will also increase the size of projects eligible for net metering; previously, projects were limited to 1MW.  PG&E made interconnection applications for systems greater than 1MW available earlier this week.
  • Property taxes remain a barrier to solar project development, and also create quite the headache in diligence. Each time an investor enters a new territory, new property tax rules must be understood. The remedy? Developers may show their sophistication and transactional experience by thoroughly understanding the local tax regime, knowing their local assessor, and documenting the expected expense for their partners to underwrite.
  • Know anyone in Florida? Voters will be able to cast their vote in support of Amendment 4, a measure which will encourage solar in the Sunshine State, during the August 30th primary. Take a moment and tell five friends. Then, in November, watch out for the confusing, utility-backed “solar” amendment, Amendment 1, during the general election.
  • Our utility-scale origination team is seeing more activity in southern markets such as Florida, Alabama, Mississippi, Texas, and South Carolina. Developers are looking to these states because of their above average irradiance and relatively low cost to procure land.
  • Despite the Supreme Court “stay” on the Clean Power Plan (CPP) earlier this year, California submitted a draft of its CPP compliance plan at the beginning of August. As Mary Nichols, Chair of the California Air Resources Board tweeted: “We’re down with #CPP (yeah, you know me!)”
  • 2016 is looking to be a banner year for utility-scale solar in Virginia. Dominion is making progress toward its goal to reach 400MW of solar by 2020, much of which has been comprised of large “self build” solar farms for corporate offtakers. GTM Research estimates that Virginia will reach achieve 166MW in 2016.


Sol Systems is a leading solar energy investment and development firm with an established reputation for integrity and reliability. The company has financed approximately 450MW of solar projects, and manages over $500 million in assets on behalf of insurance companies, utilities, banks, and Fortune 500 companies.

Sol Systems works with its corporate and institutional clients to develop customized energy procurement solutions, and to architect and deploy structured investments in the solar asset class with a dedicated team of investment professionals, lawyers, accountants, engineers, and project finance analysts.

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Sara Rafalson

Sara Rafalson