The numbers are out. Greentech Media and SEIA’s latest Solar Market Insight Report showed that commercial-scale solar’s growth has been less than impressive. In fact, their research shows that 2014 commercial-scale installs were down 6% from 2013, and 3% from 2012.
We’ve discussed on multiple occasions why commercial-scale has experienced sluggish growth, and why a shortage of bankable projects has been unable to feed the supply of capital in the space. The good news is that we are already starting to see that turn around, and we are optimistic for 2015.
The commercial-scale sector is maturing, and so are the players within it. As earlier stage developers get their fourth and fifth deals under their belts, deal velocity starts to increase. With each project, developers become more efficient in their processes, allowing them to close transactions quicker and pivot to the next opportunity. Efficient processes are essential for scaling the commercial solar market, and as the saying goes, “Work smarter, not harder.” The winners are those that set rigid development deadlines, and set expectations with key counterparties and stakeholders to plan around the closing deadlines (e.g. permits should be turned in by x date, interconnection plans by y date). The ones left behind are those that react as each piece of the project development puzzle emerges. Commitment is key. To find the explosive growth that has eluded the commercial solar space, we will all have to work smarter and harder.
Sol Systems itself has seen a considerable uptick in project pipeline, and this has made us optimistic for the future of commercial-scale solar. As our financing products for commercial and small-utility solar deals have become more well-known in the industry, our developer clients are seeking opportunities in this previously neglected market sector knowing that they can get these deals financed and built through a partnership with Sol. If the market continues to react to these readily available financing products for commercial solar, will 2015 be the year that commercial solar starts to scale toward its $5 billion potential?
This is an excerpt from our Solar Project Finance Journal, a monthly electronic newsletter analyzing the solar industry’s latest trends based on our unique position in the solar financing space. To view the full Journal or subscribe, please e-mail firstname.lastname@example.org
About Sol Systems
Sol Systems is a solar energy finance and investment firm. The company has facilitated financing for 180MW 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 www.solsystems.com.