SOURCE: The Sol Project Finance Journal, July 2015

14 Jul 2015


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 July 2015 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.

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*Our all-in price statistics exclude projects from Ontario, Hawaii, the U.S. Virgin Islands, and Puerto Rico where all-in prices remain over $3.50/W.



Illinois: Survey says? Illinois released the results from its inaugural SREC auction in late June. Pricing for projects under 25kW averaged $165.58/MWh, and projects in the 25kW – 500kW range were at $101.09. This puts Illinois SREC pricing closer to one of our favorite (and most underrated) solar markets, Maryland. With low electricity prices, the SREC pricing from this round makes commercial deals a bit too tight to pencil (unless a developer has extremely low build rates). We are more optimistic about the November solicitation, which will allow bids for projects up to 2MW. Contact for more info on bidding into the fall procurement. We are actively working in this market and would be interested in hearing what you are doing.

Massachusetts: In light of the net metering cap issue, certain types of projects that do not need a net metering allocation to interconnect are emerging in the Commonwealth:

a)    Strictly behind-the-meter deals (200-400kW) in National Grid territory where all production is consumed on-site

b)    Rooftop projects in municipal utility territories; they go by their own rules

c)    Rooftop deals in WMECO territory where electricity is cheaper, but deals can still pencil if developers accept a tighter margin

Meanwhile, the Massachusetts SREC I and SREC II markets are strong and stable. The Solar Credit Clearinghouse Auction for Compliance Year 2014 will take place on July 28 for the SREC I program.  Due to undersupply and spot market rates ($358/SREC) that exceed the auction price, the SREC II auction will not take place this year.

North Carolina: Efforts remain active to halt the solar boom in the Tar Heel state, which skyrocketed to #2 in terms of installed capacity for 2014, and #11 in solar jobs per capita. The State House has already passed House Bill 332 that would: 1) halt North Carolina’s renewable portfolio standard (RPS) at six percent, scaling its original commitment back by more than half; and 2) reduce the current threshold for Qualifying Facilities eligible for the standard-offer PPA program from 5MW down to 100kW. The fate of the North Carolina solar economy is now in the hands of the Senate Finance Committee. If you are interested in becoming active on this issue, we recommend plugging into the work that the NC Sustainable Energy Association (NCSEA) is doing.


  • Markets with standard offer PPAs – or Qualifying Facilities (QF) markets – aren’t just buzz; real development is happening in these states. In some cases (e.g. markets like Indiana and North Carolina), developers are electing to negotiate bi-lateral contracts with the utility at a rate lower than the standard offer PPA, but for larger systems than a QF contract would allow. But, be careful – these contracts often include less favorable terms than the standard offer QF contract.
  • D.C. is pushing for legislation to fix its flawed community solar program, which originally passed in 2013. The D.C. SREC market remains the strongest in the country, at $485/MWh.
  • Peering into the crystal ball: In a recent UBS interview, Keith Martin of Chadbourne offered his prediction that the ITC will be “extended” in late 2016 for commercially-owned systems via commence construction language, consistent with the approach adopted for the wind’s production tax credit (PTC).
  • An idea worth floating? Floating rate PPAs continue to increase in popularity, despite their drawbacks. While they may be easy to get customers to sign, they are challenging to finance at rates that a developer would find attractive. We have seen them most prevalent in New England.
  • Connecticut utilities announced winning bids from the latest ZREC solicitation three weeks ahead of schedule. We expect pricing to inch closer to Tier I REC pricing, a similar product except that ZRECs are much more secure and attractive with a 15-year locked in rate.
  • For those of you wondering why Puerto Rico’s solar market doesn’t shine, even with electricity at 22 cents/kWh, here’s you answer.
  • It’s goin’ down. Pennsylvania and Ohio SREC pricing has dipped below Tier I REC pricing – down to $10/SREC from $25/SREC in June – due to large North Carolina systems that have flooded the PA market.
  • Turns out that the Energy Information Administration (EIA) has been undercounting solar production by as much as 50%. Frightening thought when you consider how many policy decisions are made based on this data.
  • The New York market has its flaws, but the best projects that we have seen as of late come from large municipal RFPs. Margins are still tight, but with the strong oftentimes investment grade offtake and lower build costs, we can make these deals pencil.


Sol Systems is a solar energy finance and investment firm. The company has facilitated financing for 262MW 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

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Sara Rafalson

Sara Rafalson