SOURCE: The Sol Project Finance Journal, January 2016

20 Jan 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 January 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 – Prior to the holiday break, the California Public Utilities Commission issued the proposed decision to net energy metering (NEM) 2.0. The solar industry celebrated; with ITC extension, the Paris climate agreement, and full retail credit in California, how many times did you hear your industry colleagues say “Christmas came early?”

But, hold on. Non-bypassable charges (NBCs) technically mean solar consumers will not receive full retail credit. NBCs would be imposed on solar consumers to cover a utility’s costs of programs; they are not charged to solar consumers under NEM 1.0. Since NBCs would be charged to solar customers on every kWh drawn from the grid, effectively, an additional ~2-5 cents/kWh will be discounted from solar exported to the grid.

With this change, look for the market to move more toward smaller systems and self-consumption. This will also encourage the growth of storage, especially with the lucrative Self-Generation Incentive Program (SGIP) rebate. The final decision is scheduled for January 28, though a surprise public meeting last week has advocates thinking that the path to approval will not be so simple.

In related news, follow CALSEIA for the discussion over Time of Use (TOU) rates, which will have a major impact on project development in 2018 and beyond.

Florida – PPA authorization in the Sunshine State hit a snag after Floridians for Solar Choice, a solar advocate-backed organization, failed to gather enough votes to qualify for a November ballot initiative. Instead, Consumers for Smart Solar (CSS), a utility-funded political action committee, may have their own constitutional amendment make the ballot – pending Supreme Court review. The existence of the conflicting organizations – and their similar-sounding names – has been confusing for consumers. Alas, hope is not lost. Vote Solar, SEIA, and partners are working on another campaign to finally bring more solar to the Sunshine State. Companies interested in getting involved should contact

Massachusetts – The Massachusetts Department of Energy Resources (DOER) sent notification that 567.7MW of solar energy systems have been qualified or accepted into the SREC II program, or about 60% of the program capacity cap. DOER will set aside about 120MW for smaller scale projects under 25kW. That leaves about 250MW for SREC II, whose cap may be hit as soon as Q3 of this year. Meanwhile, all eyes are still on the Commonwealth’s net metering standstill. Most project development we’re seeing is in NSTAR and WMECO territory – or with municipalities. We are seeing little development within National Grid – even for behind the meter projects. At press time, 85.2MW remain on National Grid’s net metering allocation waiting list.


  • The December 18 omnibus bill reinstated bonus depreciation, providing for 50% bonus depreciation through 2017, declining to 40% in 2018 and 30% thereafter. While this is positive news – remember that bonus depreciation is, as the name suggests, only a bonus. Adding bonus depreciation back into the mix will not significantly alter pricing for a given deal, and some investors do not even value it at all.
  • Pricing for the latest Connecticut small ZREC solicitation (<100kW) came in around ~$80/ZREC. If the schedule for medium and large solicitations is to follow years past, bids for medium and large ZRECs will be due in June and announced in July. Meanwhile, several projects that won ZREC projects last summer remain stranded until the state’s municipal virtual net metering cap is lifted.
  • At the end of last year, developers were rushing to lock in equipment orders to avoid 2017 shortages. Will the ITC extension trigger a 2016 oversupply? No way, say analysts.
  • Vermont could become a hot utility-scale market for solar. A new transmission line from Canada – slated to be complete in 2019 – may also mean that the Green Mountain State will get more of its electricity from hydro and wind.
  • Move over, California. Oregon may be the next state to incorporate a 50% renewable portfolio standard. If passed, legislation would also create a community solar program


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 and project acquisition, to debt financing 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

Print Page


Sara Rafalson

Sara Rafalson