The Sol SOURCE is a monthly journal that our team distributes to our network of clients and solar stakeholders. Our newsletter contains 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 2018 edition. To receive future Journals, please subscribe or email SOURCE@solsystems.com.

STATE MARKETS

Massachusetts - The long-awaited opening of Massachusetts’ SMART incentive program commenced on November 26, and as expected, the Commonwealth’s Department of Energy Resources (DOER) saw a massive volume of applications hit their desks. Given the long-delayed nature of the program’s opening, the line of applications were growing, with 2,500 application received in the first week.

The 1600 MW program is divided among the five utility territories of the Commonwealth, each with a small and large project size group; large projects are defined as >25kW. To no one’s surprise, the large project groups for Eversource MA West (formerly WMECO) and Unitil have reached capacity based on the pending applications submitted and a waitlist is already starting to form. Not too far behind that is National Grid, with the largest service area, at over 400 MW of capacity pending in its large project group and is already on the seventh of eight blocks. Following the trend of the net metering cap allocations, Eversource MA East (formerly NSTAR) trails with only 39 MW of pending capacity in its large project group which means this utility remains in Block 1.

Given how quickly the program is filling up due to the pent-up demand as the DOER worked tirelessly to restructure its solar program, many stakeholders are already looking ahead at what will come next, either in the form of an extension or successor. When SMART’s predecessor opened, we saw similar congestion in the initial opening, which led to the need for a successor fairly quickly. SMART, however, took so long to open in large part to the complete restructuring of the incentive program. As the need for a next step in Massachusetts grows as queues continue to fill, the approach the DOER takes will be closely watched.

Washington DC - On Tuesday, December 18, the DC Council unanimously passed the CleanEnergy DC Omnibus Amendment Act of 2018. The bill, which includes provisions for an 100 percent renewable portfolio standard (RPS) by 2032 and 10 percent solar carve-out by 2041, will become one of the most aggressive clean energy laws in the world upon its expected signing by Mayor Muriel Bowser.

The 10 percent solar carve out is the highest set in the country and will provide significant employment and economic investment benefits to the district, helping it retain capital in the local economy. The bill also represents the Districts defense of its deregulated energy market. In public hearings on the bill, the DC Public Service Commission (PSC) lauded its deregulated market, which they say has enabled consumer choice and increased renewable energy penetration. Sol Systems hopes that this bill can serve as an example and model for other jurisdictions that are looking to increase their RPSs.

New Jersey - The end of the year is fast approaching, and the New Jersey Board of Public Utilities (BPU) is as graceful as ever under pressure. The BPU and their staff worked quickly to implement key provisions of the Clean Energy Act of 2018 before the year ends.

On Tuesday, December 18, the BPU covered an extensive agenda to provide necessary information and rulemaking to renewable stakeholders. Among the many items covered was the establishment that the existing solar renewable energy certificate (SREC) market will be closed once the 5.1 percent attainment goal is reached. This decision is a crucial first step towards developing the future New Jersey solar policy landscape. As the state’s next step becomes clearer, stakeholders can begin to plan for development under a new status quo.

At the meeting, BPU President Fiordaliso lauded the solar industry for the over 7,000 jobs it has fostered in New Jersey, and made a commitment to ensuring its continued progress, claiming solar is “an important part of the economic fabric in the state of New Jersey”.

Solar Chatter

• Colorado’s largest utility, Xcel Energy, announced its decision to go 100 percent renewable by 2050. The utility, which serves eight states, has recently invested heavily in renewables, while in parallel, planning to shut down many of its fossil fuel resources in the coming years.
• Oregon utility-scale solar continues to prove tough to finance given PPA structures for Qualifying Facilities (QF’s), which consist of very low rates in the first 3-5 years, before heavily escalating for the remainder of the contract. Even though long-term IRR is attractive, low returns in the first few years require both a creative lender and aggressive merchant pricing, which may prove risky in a market that is highly saturated with Hydro projects.
• Facebook announced a 200 MW solar deal in Georgia with an energy cooperative, the largest such deal of its kind. As corporations, particularly those with data centers, increasingly set ambitious sustainability goals, we continue to see larger deals being struck by major players.
• On December 3, all Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs) were required to complete their compliance filings for the Federal Energy Regulatory Commission’s (FERC) Order 841, a February rule that required wholesale grid operators to enact market rules for energy storage to participate in the market. The filings will next go through a review and comment period at FERC, and rules are expected to be in place by December 2019. The needle moves forward for the energy market in the United States.

ABOUT SOL SYSTEMS

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 ten years, Sol Systems has delivered 800 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 www.solsystems.com