The SOL SOURCE, December 2016

15 Dec 2016

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

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


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


Joined Charts


Illinois – On December 8, Governor Bruce Rauner signed the Future Energy Jobs Bill, sweeping energy legislation that will support all sectors of the solar energy market: distributed generation, community solar, brownfields, and utility-scale solar. The legislation also creates a stable funding stream to pay for multi-year renewable energy credit (REC) contracts to help Illinois meet its 25% by 2025 renewable portfolio standard (RPS). The funding certainty is a key provision, as the instability in the state budget had previously stunted the growth of the solar market. The funding will now be held in the Renewable Energy Resources Fund (RERF).

Solar was a big winner in this legislation, as was nuclear. As part of the legislation, struggling nuclear plants will be subsidized using zero emission credits (ZECs), similar to the mechanism used in New York’s 50% Clean Energy Standard. Are we seeing a new trend in state-level energy policy?

New Jersey – S-2276, legislation to “pull forward” the renewable portfolio standard (RPS) to 4.1% by 2021 is on hold until after the New Year. If passed by the General Assembly and ultimately signed by Governor Chris Christie early next year, near-term demand for solar would be increased. Given the oversupply of solar renewable energy credits (SRECs) in the market, however, longer-term follow-on legislation would be needed in the coming years to provide true market stability. New Jersey’s gubernatorial election will take place in 2017.

Already, the price difference between vintage 2017 and vintage 2021 is clear evidence that traders see little long-term value in the NJ SREC market under the existing RPS target. Vintage 2017 recently traded for $235 while 2021 is fetching a mere $80 by comparison.

Given its SREC trading business, Sol Systems is still actively financing rooftop and carport projects in New Jersey, and also sees the Garden State as an ideal market for merchant assets. We are specifically interested in late stage Sub-Section Q, S & T projects.

Ohio – While states across the country are considering legislation to increase their respective renewable portfolio standards, the Ohio state legislature narrowly passed another “freeze” to the state’s modest 12.5% RPS earlier this month. Theatrics ensued in Columbus over the last several weeks of hearings, including one state senator claiming that “kale mandates” were sure to come next if the RPS was allowed to resume (he clearly had not seen this Sunrun commercial).

The Senate passed the freeze bill 18-13, and the House vote was 56-41, with many Republican legislators voting against the freeze. This bi-partisan support for renewable energy is critical, as freeze proponents were unable to gather enough votes for a possible veto override. Businesses interested in signing a letter asking for Governor Kasich to veto another freeze to the RPS can email If a veto occurs, the RPS, which was put on pause in 2015 and 2016, will resume on January 1.


  • Can’t stop, won’t stop. On Tuesday, GTM Research and SEIA released their latest Solar Market Insight report. 4,143MW were installed in Q3 2016, the biggest quarter ever for the U.S. solar industry. In other words, a megawatt of solar is installed every 32 minutes. Fourth quarter 2016 is poised to be even bigger.
  • How could corporate tax reform affect solar under the new administration? While a decrease in the available tax burden would reduce ITC-driven investments in solar from corporations, conventional wisdom states that overarching reform would take years, and potentially would not take effect until the already built-in stepdown of the tax credit. But in an administration where nothing seems conventional, industry groups are encouraging solar supporters not to become complacent.
  • South Carolina is open for solar business in 2017. While a wrinkle in the state’s property tax regime stalled some projects in 2016, falling costs and the additional time to negotiate fee in lieu of taxes (FILOT) agreements means the spigot is back open for next year.
  • Fourth quarter is always the time of the year when developers and EPCs rush to complete year-end deadlines. For solar installers and developers in Massachusetts, this is especially true, as developers race to meet January 8th SREC II deadlines before reduced incentive levels kick in. While the residential solar market will continue under reduced rates, the commercial market is at a standstill. Will emergency regulations create a bridge from SREC II to the new incentive regime? As program design for the SREC II successor program is ongoing, uncertainty regarding the new incentive structure and pricing has halted the ability to lock down new commercial customers.
  • Hope springs eternal for developers using niche non-Tier I equipment in an attempt to decrease hard costs. Our advice to these developers? Stick to proven Tier 1, UL-listed manufacturers with demonstrable performance data, at least five years of production experience, and more than a gigawatt of capacity. Module costs are at an all-time low, so there’s no need to sacrifice quality for cost or get locked into purchase orders too early. Sol Systems works closely with project partners to optimize design and equipment selection.


Sol Systems, a national solar finance and development firm, delivers sophisticated, customized services for institutional, corporate, and municipal customers. Sol is employee-owned, and has been profitable since inception in 2008. Sol is backed by Sempra Energy, a $25+ billion energy company.

Over the last eight years, Sol Systems has delivered more than 500 MW of solar projects for Fortune 100 companies, municipalities, universities, churches, and small businesses. Sol now manages over $650 million in solar energy assets for utilities, banks, and Fortune 500 companies.

Inc. 5000 recognized Sol Systems in its annual list of the nation’s fastest-growing private companies for four consecutive years. For more information, please visit

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Sara Rafalson

Sara Rafalson