SOURCE: The Sol Project Finance Journal, February 2016

17 Feb 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 February 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.




California – At the end of January, the California Public Utilities Commission voted to uphold retail rates and defined parameters for net energy metering (NEM) 2.0, which will go into effect when each utility territory meets its respective cap. San Diego Gas & Electric will likely be the first. Major updates since the Proposed Decision include the Commission’s exclusion of transmission charges from non-bypassable charges (NBCs), effectively lowering NBCs to ~2-3 cents/kWh. A detailed analysis of NEM 2.0 can be found in Utility Dive. We expect PPA rates to be lower for California projects under the new regime. Looking forward, CALSEIA’s got their eyes on time-of-use rates.

Meanwhile, the Self-Generation Incentive Program (SGIP) will open to applicants on February 23. SGIP is meant to encourage self-consumption by incentivizing behind-the-meter applications, such as energy storage.

NEM 2.0 combined with incentives for storage will further push the California market toward self-consumption.

Maryland – SREC prices in Maryland have recently dipped from $160/SREC to $120/SREC. Price declines will likely continue, as the extension of the solar investment tax credit (ITC) has made it possible to build utility-scale projects in the state, which will affect the supply demand balance. One such project is Great Bay, a 75MW project expected to hit the market in the next 12 months. In addition to the added supply of solar capacity in the state, the solar requirement within the Renewable Portfolio Standard (RPS) is stagnant at 2% beginning in 2020 as the SREC market effectively begins to merge with the Tier 1 REC market. Depending on what percentage of PJM pipeline you view as likely to go online, and what the effect on residential uptake will be as REC prices decline, this combination could result in ample supply until 2020 and oversupply thereafter. Given the utility-scale projects expected to come online over the next several years, these trends are likely to continue even with the pending RPS changes.

​Meanwhile, legislation mandating utilities to provide permission to operate within 20 days is sailing through Annapolis.

Massachusetts – Well, that was fast. On February 5, the Massachusetts Department of Energy Resources (DOER) announced that the SREC II program for projects over 25kW has filled up (25kW still has under 100MW left). Sound familiar? If so, that’s because the first iteration of the SREC program – cleverly named SREC I – reached its cap fewer than 2 years ago. While 450MW of projects over 25kW have applied for SREC II in the last month, based on our analysis, expect some major churn.

We expect that many of the projects in the queue are unbaked or missing an interconnection agreement, meaning they will be deprioritized in the queue. Developers with projects close to start of construction and/or with an interconnection agreement still have some hope for receiving a coveted SREC II certification (Read our thorough analysis for more details on the Massachusetts SREC II crunch). Unlike the transition from SREC I to SREC II in 2014, neither an emergency regulation nor an “SREC III” are currently being considered.

On top of this, Massachusetts still has that whole net metering thing to worry about; 107,296MW remain on the waiting list in National Grid territory. Long-term, sustainable solar policy, anyone?


  • After a valiant effort by the Maryland-D.C.-Virginia Solar Energy Industries Association (MDV-SEIA), a collection of pro-solar legislation was tabled in Richmond after a heavy showing from opposition at the last minute. Legislation – including a bill to authorize third party financing – is expected to be reconsidered in a summer subcommittee.
  • No soup for you! And by soup, we mean PPAs. In early February, the Kansas Department of Revenue (DOR) confirmed that only a utility can sell power to a customer.
  • According to the latest Solar Jobs Census, the solar industry now employs 208,859 workers. 75,598 of those jobs are in California, and Washington, D.C. ranks sixth nationally in solar jobs per capita. P.S. We’re hiring!
  • Grow your business with the RE Growth Program. Rhode Island Renewable Energy Growth Program should be coming back in 2016; look for the first enrollment of 2016 to be announced in late spring. Don’t cross this “bonus” market off your list. Though the program is relatively small compared to adjacent markets, pricing is high.
  • One bad apple spoils the whole darn bunch! Despite the bad reputation that YieldCos have garnered over the past several months, several YieldCos are still fundamentally strong. If only Wall Street could tell the difference…
  • After some challenges early on (whatever you do, don’t mention co-location), Minnesota’s community solar gardens are nearly home free. Projects are already on the market and will be built and/or come online soon.


Sol Systems is a solar energy finance and investment firm. The company has facilitated financing for over 400MW of solar projects on behalf of Fortune 100 corporations, insurance companies, utilities, banks, family offices, and individuals. Sol Systems provides secure, sustainable investment opportunities to investor clients, and sophisticated project financing solutions to developers. The company’s tailored financial services range from tax structured investments, project acquisition and SREC portfolio management. Inc. Magazine named Sol Systems on its annual Inc. 500 list of the nation’s fastest-growing private companies for a second consecutive year, ranking it No. 6 in the nation’s top solar companies in 2014. For more information, please visit

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Sara Rafalson

Sara Rafalson