The Sol SOURCE: March 2018

Posted on March 21, 2018January 25, 2023 by Sara Rafalson

The Sol SOURCE: March 2018

2018 | 21 Mar 2018

By Sara Rafalson

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 March 2018 edition. To receive future Journals, please subscribe or email SOURCE@solsystems.com.

STATE MARKETS

Massachusetts – Massachusetts, is the number six state for solar development according to the most recent GTM and SEIA report. However, the state continues to experience unique challenges for a few reasons. First, interconnection remains a challenge for most developers because the SMART program will have so many standalone systems that will interconnect in front of the meter. This is largely because net energy metering (NEM) caps have not been raised, making behind-the-meter incentives less impactful. And, although highly variable depending on each project, the grid will need significant upgrades to make room for this solar. Pre-applications for interconnection already demonstrate the need for costly upgrades, both in price and in time, which in turn hurt project economics, even with a robust solar incentive program. In addition, competition is fierce among developers and many potential solar customers are familiar with the very attractive economics of the SREC I and SREC II program. With SMART tariffs nearly finalized, we expect the market to catch up in terms of its expectations, and of course, despite these challenges, Massachusetts remains one of the brightest solar markets in the country.

New York – Earlier this month, NYSERDA announced that 22 utility-scale solar projects – across 646MW – had been awarded contracts under the state’s latest Clean Energy Standard solicitation. This is no small feat. Why?

In past solicitations, solar was awarded *one* contract, or more commonly, no contracts. Therefore, until very recently, utility-scale solar in New York was almost non-existent. This is because the Clean Energy Standard procurement process – formerly the Main Tier Solicitation under the RPS – required for solar to compete with other technologies mainly on price and other “squishy” economic development criteria. This is why solar had a hard time competing with hydro, wind, and even fuel cells and anaerobic digesters in years past.

What made this year different? After the initial implementation plan for the Clean Energy Standard, the national Solar Energy Industries Association worked closely with NYSERDA to push for the procurement process to have a better diversity of fuel sources. Under REV, they argued, grid benefits and distribution systems’ needs, not just price, should play a role in the evaluation of projects. As a result, renewable energy projects could score points with new “project viability” criteria (which were awarded to projects that were more or less ready to go and developed by companies with an established track record to bring projects to completion). Other changes included new points for operational flexibility and peak coincidence to account for grid benefits, as well as economic development benefits.

Big props to the state affairs team at SEIA for their leadership, and for showing us once again that advocacy works. Thanks to their advocacy, coupled with increasing cost declines in the solar space, utility-scale solar won big in this year’s solicitation. And, with the CES results and Megawatt Block reforms underway, solar progress is happening in the Empire State.

For a refresher on the Clean Energy Standard, check out this earlier issue of SOURCE, or a summary on our blog.

Developers in New York holding a CES award but in need of PPA offtake can contact colin.murchie@solsystems.com. We are also interested in New York CES or NYPA projects for our Helios fund; developers can contact Jessica.robbins@solsystems.com for more info.

Virginia – At the beginning of March, Governor Northam signed legislation that deemed over 5.5 GW of utility solar and wind “in the public interest” in early March, with up to another 500MW of rooftop solar. Although this provision was part of controversial omnibus legislation (check Ivy Main’s Power to the People blog for a full summary), this is a still a hard-earned victory for Virginia solar advocates, namely MDV-SEIA and its Rubin Group process, which involved solar companies, utilities, coops, and the environmental community. And, with only 619.53MW installed to date, 5GW+ is nothing to bat an eye at. However, we’d note that there’s a lot of hard implementation work to come – including determining how much of that 5.5 GW is developed at all, and how much is solar.

Nevertheless, with over 7GW in the interconnection queue, the subsequent procurements will provide a critical relief valve to this oversupply of projects. Stay tuned for implementation, and get involved by contacting MDV-SEIA.

SOLAR CHATTER

The much-hyped domestic module manufacturing “revitalization” after the Section 201 tariffs is already losing steam. As one example, Jinko revised their investment commitment to 1/8 of what was planned, and jobs estimate to 1/4 of what was planned. In other modules news, more manufacturers are moving in the direction of high efficiency modules, and interest in bifacial modules continues to grow. For a refresher on bifacial modules, refresh with an earlier edition of SOURCE.
After 20+ years of federal support, DSIRE, the free, go-to database for solar policies incentives, has had its funding discontinued. The North Carolina Clean Energy Technology Center is asking for tax-deductible donations to keep this critical source of information free to the public. Learn more at go.ncsu.edu/givencclean.
It’s been almost two years since community solar legislation passed in Oregon, and after a lengthy regulatory process to implement the law, the program has yet to open. Notably, the bill credit rate for community solar projects has still not been determined. We’re hopeful that this will be wrapped up by the end of the spring, but in the meantime, the Oregon program is another example that illustrates that with community solar, the devil is in the details.
We are spending an increasing amount of time talking to prospective solar customers about solar carports given their economic viability in several key markets. We’ve had some customers focus more on building something with attractive aesthetics, even a greenery, as a primary consideration for the solar carport structure rather than maximizing their lease payment or electricity savings. What are some other considerations for carports? We dove deep in February’s SOURCE

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 eight years, Sol Systems has delivered 650MW 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.

The Sol SOURCE: February 2018

Posted on February 28, 2018January 25, 2023 by Sara Rafalson

Blog

The Sol SOURCE: February 2018

2018 | 28 Feb 2018

By Sara Rafalson

Below, we have included excerpts from the February 2018 edition. To receive future Journals, please subscribe or email SOURCE@solsystems.com.

STATE MARKETS

Illinois – While implementation on the rooftop, commercial & industrial, and community solar programs is still underway, the latest utility-scale (defined as projects above 2MW) solar renewable energy credits (RECs) procurement has been announced. The Illinois Power Agency is seeking 800,000 annual RECS. Part 1 proposals were due on the 16^th and results will be announced at the end of March. Despite the progress on the regulatory side to implement the ambitious Future Energy Jobs Act legislation, new hurdles could come as the agricultural community looks to preemptively create more onerous permitting requirements in the form of an Agricultural Impact Mitigation Act.

There are numerous new solar programs under the Future Energy Jobs Act, and our conversation with potential customers shows us there’s still room for more education and awareness in this nascent market. Interested in learning how your organization can benefit from new solar programs to be released this summer? Contact us at taylor.leyden@solsystems.com.

Massachusetts – Unlike Illinois, where many solar customers are being approached for the first time, landowners and potential solar customers are accustomed to cold calls and emails from solar developers in Massachusetts. The only difference now is managing expectations under SMART, a less-rich (but still very attractive) solar incentive, versus the more generous rates that customers were used to seeing under the SREC I and II programs.

Hopefully, this readjustment period won’t take long. There’s currently urgency to get projects into the interconnection queue to secure a position in the earlier blocks, because the longer a customer waits, the lower the incentive value the project will receive. This leaves the customer with a less lucrative deal, as the SMART incentive value declines as each block’s megawatt threshold is reached. This rush is especially true, as always, in National Grid territory.

Customers interested in learning more about solar leasing opportunities under the new Massachusetts SMART program can contact us at anna.noucas@solsystems.com.

New York – For years, the solar industry has been vocal about the need for reform to the Megawatt Block commercial and industrial (C&I) program (OK – a lot of that was us). Then, this fall, NYSERDA began a stakeholder process to redesign the Megawatt Block program. Notable revisions include:

Increasing the size of projects that qualify. Small commercial projects can now go up to 750kW, and commercial and industrial projects can now qualify up to 7.5MW.
Incorporating Massachusetts-style “adders” for projects that incorporate New York specific policy goals, such as storage, brownfield development, and projects developed in strategic locations.
Changing the incentive structure from the previously flawed volumetric/monetary performance-based incentive to a new dollar per Watt performance-based incentive.
Strengthening the requirements to reserve a block allocation, which together with a huge amount of work NYSERDA and NYSEIA have been doing to clean up interconnection, should go a long way toward preventing “queue clogging.” This practice previously allowed less viable projects to reserve space in higher incentive blocks and artificially pushed all other pipeline to lower incentive levels ahead of schedule.

We applaud NYSERDA for its reforms. Still, we would like to see more active participation from the solar industry, and specifically more thoughts around the incentive calculations; they look a little thin upstate to us, and NYSERDA still hasn’t published the model they’re using to determine them. Rigorous policing of the 85%+ of applications that are a year or more old and are not yet operational might help. While the stakeholder process is nearly over, we still encourage all solar industry participants to check out the NYSERDA proposal and let NYSEIA know how it would work for you.

Last, we are interested in speaking to developers in need of offtake with awards from the Tier 1 REC solicitation. Contact colin.murchie@solsystems.com.

SOLAR CHATTER

Will Michigan become one of the hottest new markets for solar? It’s looking that way. The Michigan Public Service Commission (MPSC) is pushing forward on its implementation of PURPA. While there has been utility pushback (they wasted no time making capacity payments variable), the MPSC will allow the first 150MW of solar projects to proceed at the avoided cost rates that they established for Consumers Energy until a decision on capacity needs can be made.
As solar’s growth continues in PJM, interconnection queues are jammed in several states. Notably, we are finding that utilities in PJM have a backlog of interconnection studies to public, sometimes leading to several month-long delays in project development.
With headwinds at the federal level, states will have to lead on renewable energy deployment now more than ever. Shout out to Rhode Island’s Distributed Generation Board (DG Board) and Office of Energy Resources (OER) for commissioning a consultant report analyzing the effects of tax reform and the Section 201 tariffs on Rhode Island’s renewable energy programs. The result was a recommendation to increase ceiling prices under the state’s RE Growth program from 3-12%, depending on the technology. We hope that other states will follow in this forward-thinking approach. Thank you, Rhode Island, for your leadership. Customers interested in learning more about what this means for them in the 2018 procurements should contact noucas@solsystems.com.
Given solar industry volatility over these last several years, customers are becoming more concerned about never seeing their project come to fruition, even after a PPA is signed. How can you tell if a solar company has staying power? in any RFP or similar, we suggest buyers request a summary of any and all PPAs that did not proceed to commercial operation.

ABOUT SOL SYSTEMS

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.

The Sol SOURCE: January 2018

Posted on January 31, 2018January 25, 2023 by Sara Rafalson

Blog

The Sol SOURCE: January 2018

2018 | 31 Jan 2018

By Sara Rafalson

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

STATE MARKETS

Massachusetts – It’s been nearly two years since we began discussing the end to the SREC II program. Multiple SREC II extensions, countless stakeholder meetings, and dozens of rumors and speculation later, there is finally certainty in the Massachusetts solar program. The Massachusetts Department of Energy Resources has released pricing for its SMART program. Even with new tariffs and high interconnection costs, pricing is looking strong in most utility territories. Only WMECO’s rates are lower, potentially because electricity pricing is not as high or because a plethora of projects were submitted on vacant land. Despite this, projects can still be built in WMECO territory, especially with adders, and when conscious of size. Site owners in this territory will have to accept a lease rate that is lower than what their neighbors in National Grid cities and towns will be receiving.

Interested in pursuing solar and want to understand how you’d fare under the new SMART pricing? Email anna.noucas@solsystems.com.

New Jersey – Legislation to increase the demand for solar in New Jersey passed the Senate in early January, only to be pocket vetoed by Governor Christie on his way out the door. With a new, pro-solar administration now in place, solar’s odds just got better. Governor Phil Murphy campaigned on a 100% renewable portfolio standard, and only a couple days ago, we were wondering if he would support standalone solar legislation or wait for more comprehensive legislation that encompasses solar, wind, other renewable energy sources, and some sort of subsidy for nuclear. A lot can happen in only a couple days. Solar legislation has now been included in the zero emission credit (ZEC) nuclear bill and amended as S-877. We're watching to see if the legislature passes this energy bill soon and sends it to Governor Murphy for his signature.

Regardless of the legislative vehicle, we are optimistic about the future of solar under Governor Murphy. We know the market well and are proud to have developed the largest rooftop solar project in the state.

Virginia – Each year, a flood of pro-solar bills is introduced to the Virginia legislature. Given the sheer numbers of bills (which often lack of coordination with other powerful stakeholders), the majority of solar bills die an early death. (We recall fondly a time we trekked to Richmond for an MDV-SEIA lobby day, only to find out that all of the solar bills had died just right before our arrival. We have also lost track of how many times someone has tried to introduce a mandatory renewable portfolio standard or third-party financing bill, which are always a long shot, even after the November 2017 blue wave.

Enter the Rubin Group, a stakeholder group comprised of the environmental community, solar, investor-owned utilities, and coops. The goal of the Rubin Group is to build consensus around pro-solar policies, craft the bills, and get them passed. The most notable Rubin Group legislation this year is SB 284 / HB 1215, which deems 4GW of utility-scale solar to be in the “public interest” by 2024, just in line with the federal investment tax credit. If passed and future utility RFPs are issued, this could provide an important relief valve to the pent-up utility-scale solar pipeline; there are currently 7GW - of varying viability - in the interconnection queue (and that is only what’s public).

Meanwhile, Virginia has made it to Amazon’s HQ2 shortlist. Does any of that have to do with the ease and low cost by which corporates may buy offsite solar to power their operations? People think of Amazon as a Seattle company, but they do have a few billion dollars of assets in data center towns just outside Dulles airport, and Bezos does own a house behind our old office. It could happen!

SOLAR CHATTER

On January 22, the Trump administration issued tariffs on foreign-made solar modules and cells, putting 23,000 jobs at risk in one of the fastest growing sectors of the American economy. While the tariffs were largely expected and much of the market had assumed a 30% tariff in its pricing since the International Trade Commission (refresh with the December and November issues of SOURCE for more information), the near-term impacts are undeniable. GTM Research expects California, Texas, Florida, Georgia, & South Carolina to be the hardest hit markets by megawatts installed. A 30% tariff is a far cry from the 78 cents/Watt price floor initially requested, and we are grateful for the advocacy of the national Solar Energy Industries Association (SEIA) in mitigating this impact.
The “bomb cyclone” had a material impact on wholesale power prices along the East Coast. PJM average prices were ~$200/MWh the first week of January, which was approximately six times higher than the average price in 2017.
Soiling is often a concern, as dirty panels could reduce productivity of solar modules. To combat this – and protect investments – there is at least one major player making glass with anti-soiling coatings that could reduce the daily soiling rate by up to 50%. It will be interesting to see how much uptake this product gets with module manufacturers in the next few product cycles. In other non-tariff related module trends, it appears that module manufacturers are starting to compete on warranty terms, extending product warranties and decreasing warranted degradation rates. This is a sign of increasing confidence in the stability of modules over time, or manufacturers trying to differentiate their product with quantifiable measures of quality rather than just reputation or a "Tier 1" rating.
After several failed attempts, the Ohio legislature is trying yet again to repeal their modest renewable portfolio standard. A similar attempt failed last year, and the year prior, legislation passed but was met with a veto by Republican Governor John Kasich. If passed again without a veto-proof majority, Kasich could veto again, but what about 2019? 2018 is an election year, and the change in administration could impact Ohio’s renewable energy future to come.

ABOUT SOL SYSTEMS

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.

The Sol SOURCE: December 2017

Posted on December 20, 2017January 25, 2023 by Sara Rafalson

Blog

The Sol SOURCE: December 2017

2017 | 20 Dec 2017

By Sara Rafalson

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 2017 edition. To receive future Journals, please subscribe or email pr@solsystems.com.

PROJECT FINANCE STATISTICS

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

STATE MARKETS

Illinois –The Future Energy Jobs Act (FEJA) turned one this month. To celebrate, the Illinois Power Agency (IPA) released the latest iteration of its Long-Term Renewable Resources Procurement Plan (for a refresher on the first draft, check out the October issue of SOURCE). The Plan details the Land of Lincoln’s emerging community solar, rooftop solar (commercial customers up to 2MW are eligible), utility-scale solar, and low income solar and workforce training programs.

With the Long-Term Renewables Resources Procurement Plan, the Illinois Power Agency demonstrates how smart incentive design should be done. IPA used a transparent, public pro forma, soliciting public input for each key project variable. We think a key variable or two were missed in the latest draft (we’ve missed a MWdc / MWac conversion once ourselves, no judgment), but we are confident that these minor tweaks will be resolved prior to program launch, creating a top 2018 market.

The plan, filed with the Commission on December 4, and final objections are due on December 18^th. After that, the Commission has an April 3, 2018 deadline for issuing an Order confirming or modifying the plan. With a few months necessary after Commission approval to It is still feasible to accept a late summer 2018 launch.

Illinois solar customers, get ready!

Massachusetts – More public agencies have caught onto the opportunity to lease unused land for the upcoming SMART program. Sol Systems expects that this program will be less focused on PPAs and behind-the-meter solar projects, and more focused onsite leases that are less complicated for customers. In this way, a customer will earn contracted revenue instead of using a PPA, which is focused on modeling projected savings. Additionally, the Commonwealth’s social goals have the industry moving solar projects from unused greenfield land to the built environment. Increased incentives make carports especially attractive under SMART. Property owners with large parking lots for solar canopies can contact us at anna.noucas@solsystems.com for more information about opportunities under this program.

Massachusetts has issued their RFP for the first competitive solicitation under SMART, which will set pricing for the program; bids were due on December 5. Results should be announced in mid-January, at which point customers will benefit from more pricing certainty.

New York – As we predicted, the New York State Energy Research and Development Authority (NYSERDA) is in early stages to reform its Megawatt Block program for commercial and industrial (C&I) solar. As a first step, they hosted a webinar in which they recognized that they are aware that rooftop C&I is not happening in the state, but that they would like it to. While the will may be there to revamp the program, one specific problem will be that projects that have already applied to the incumbent regime will not be able to reapply. Even with a “fixed” program, this could lead to a sluggish start for a revamped Megawatt Block.

This will be a critical development to watch in the coming months, and industry participation will be critical. The political will has certainly been there under the leadership of Governor Cuomo, but execution has been challenging, specifically as it relates to C&I rooftop solar with complex regulatory schemes such as the value of distributed energy resources (VDER) and some initial flaws with the Megawatt Block program.

We’re optimistic about this critical first step that NYSERDA is taken, and hopeful that New York may soon live up to its potential as a national clean energy leader.

SOLAR CHATTER

The non-residential solar market (which we typically refer to as the “commercial” market in SOURCE) experienced strong growth this last quarter, according to the U.S. Solar Market Insight Report of Q4 2017. According to GTM Research and the Solar Energy Industries Association (SEIA), non-residential grew 22 percent year-over-year, largely due to a rush to finish projects by certain policy deadlines. Which policy deadlines? We’d say the Value of Distributed Energy Resources (VDER) in New York, the SREC II to SMART transition in Massachusetts, and changes to TOU rates and peak hours in California, to name a few.
Rumor has it that a certain bankrupt module manufacturer that has caused quite a stir this year (to say the least) is trying to get itself sold to a more reputable company. Stay tuned; the rumor mill is buzzing.
Climate change has had an unexpected effect on solar development this last quarter, at least from a delivery perspective. Hurricanes Harvey and Irma resulted in a shortage of electrical infrastructure equipment (such as components for switchgear), which has required some scrambling to secure project equipment.
Passivated emitter rear contact (PERC) cells continue to dominate new model releases in the solar module market, and appears that they will for the next several years. At the same time, mainstream module manufacturers are also taking up more aggressive module architectures to improve efficiency, such as half-cut cells, bifacial modules, and wired busbars instead of ribbons. These are all helping to push efficiency, but as always, new technology can bring along new risks that must be assessed for investors.
Will New Jersey soon follow Illinois and New York and become the latest state to offer zero emissions credits (ZEC) for nuclear power? Given the lack of public evidence that nuclear facilities are indeed failing in New Jersey, this legislation has been controversial; similar legislation earlier in the year failed to move. Nonetheless, this could be important to watch before Governor Christie leaves office. Regardless of what happens in the rest of 2017, one thing is for certain: 2018 is shaping up to be an interesting year in energy for the state of New Jersey. With the election of Governor Phil Murphy and plans to kick off a new Energy Master Plan, New Jersey can regain its place as a top East Coast solar market for years to come.

ABOUT SOL SYSTEMS

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.

A Look Back at 2017: Illinois, Tax Equity Investors, and a Shifting Federal Landscape

Posted on December 20, 2017January 25, 2023 by Sara Rafalson

Blog

A Look Back at 2017: Illinois, Tax Equity Investors, and a Shifting Federal Landscape

2017 | 20 Dec 2017

By Sara Rafalson

This is an excerpt from the December 2017 edition of The SOL SOURCE, a monthly electronic newsletter analyzing the latest trends in renewable energy based on our unique position in the solar financing space. To receive future editions of the journal, please subscribe.

Since 2012, The Sol SOURCE has been providing readers like you with real-life trends in the world of solar energy development, tax equity investing, policy, and customer trends. As we close out another year and another 12 issues of the Sol SOURCE, we reflect on our most-read articles of 2017, and what these trends say about the shifting tides in the industry at large.

Get Ready - The Illinois Solar Market is Coming

Following the release of September’s Draft Illinois Long-Term Renewable Resources Procurement Plan, we sifted through the 169-page regulatory document, which detailed the solar programs to be created under the Future Energy Jobs Act (FEJA). While FEJA passed over a year ago, rulemaking surrounding the ambitious law ongoing, preparing most programs for [hopefully] a summer 2018 launch. FEJA will create new programs for rooftop solar, community solar, and utility-scale projects (defined as 2MW+ in size).

Our article on the Illinois draft plan was our most-read article of 2017, and we are not surprised; Illinois is poised to be the hottest new market of 2018. Stay tuned to the SOURCE for developments on this new program. Conveniently, you’ll find updates on the plan filed by the Illinois Power Agency (IPA) earlier this month in this month’s SOURCE.

Tax Equity in 2017 - Capital Demand Shift

Much can change in a year. In early 2016, we discussed how the federal investment tax credit (ITC) extension at the end of 2015 would require more expensive tax equity to stimulate market growth. We expected to see, as usual, an oversupply of projects compared to the limited supply of tax equity investors.

However, in 2017, we saw quite the opposite. This year, there has not been enough large, investment-grade projects to fill the demand of tax equity investors for third-party structured finance deals. The culprits? Crowded utility interconnection queues in new and incumbent markets, changes to PURPA, the Suniva trade case, and regulatory uncertainty in established markets such as North Carolina, Massachusetts, and Maryland. Additionally, despite the threat of tax reform, solar’s maturation as an asset class has brought new investors to the space, increasing competition for the “top of the line” projects.

What’s in store for the tax equity market in 2018? Keep your eye on tax reform to tell.

The Shifting Solar Incentive Landscape

When President Trump was elected, many said not to worry, as most renewable energy development is driven at the state level, and energy trends are changing in our favor (remember the “Trump Can’t Stop the Clean Energy Revolution” piece in Bloomberg?). With the ITC extended in December of 2015, what more could we need at the federal level? While this is fundamentally true, one cannot deny that the solar industry has seen some headwinds under the new administration. The U.S. has exited the Paris Climate Accord, the Suniva trade case has driven up pricing of solar modules, tax reform is looming, the Department of Energy wants to bail out coal and nuclear, and there are murmurs of PURPA reform at the federal level. Given these federal trends, unsurprising, our articles about tax reform and the trade case hit the top of the charts.

Despite these headwinds, however, one trend sticks out: solar continues to win. At the beginning of 2017, The Solar Foundation reported that solar now employs 260,000 Americans, and given the growth of utility-scale solar in rural areas, many of these jobs are in red districts. The Energy Information Agency shows that PV output in 2017 has grown 47% over the same period in 2016. And, while the latest Solar Market Insight report estimates that 2017 installations will be down 17% from record-breaking 2016, total installed solar PV is expected to triple over the next five years.

Can’t stop won’t stop; watch out, 2018.

That’s a wrap on 2017. For fun, and to reflect on how much has changed in a year (for better or worse), check out our top articles of 2016 and 2015.

ABOUT SOL SYSTEMS

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.

The Sol SOURCE: November 2017

Posted on November 20, 2017January 25, 2023 by Sara Rafalson

Blog

The Sol SOURCE: November 2017

2017 | 20 Nov 2017

By Sara Rafalson

Below, we have included excerpts from the November 2017 edition. To receive future Journals, please subscribe or email pr@solsystems.com.

PROJECT FINANCE STATISTICS

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

STATE MARKETS

New Jersey – As expected, Democratic gubernatorial candidate Phil Murphy won the Governor’s race in New Jersey this month. The vote was no surprise given his predecessor’s how-low-can-you-go approval ratings, but what will an administration change mean for the solar industry? Efforts to “pull forward” New Jersey’s solar carve-out from 4.1% by 2028 to 4.1% by 2021 were stalled last year, largely due to uncertainty that Governor Christie would sign the legislation. Since then, even more aggressive RPS legislation has been substituted for the pull forward, proposing an ambitious 5.3% solar carve-out by energy year 2021 ] Given that Phil Murphy will become Governor early next year, the odds for a more ambitious RPS package and net metering cap lift are all the more likely [if not early next year, then after an Energy Master Plan is crafted]. Murphy campaigned on a 100% RPS, something that would benefit all renewables, and not just solar.

New York – There is a growing sentiment that New York not only needs to, but will, revise its commercial and industrial (C&I) Megawatt Block program for rooftop solar. There are no details to be had yet, but one thing that is important is that people with a project reservation that will not go forward should facilitate the market by pulling their reservation out of the queue. This will help program administrators to realistically gauge the success of the program, and also better understand the budget available to provide a fix. Meanwhile, the value of distributed energy resources (VDER) continues to confuse not only developers, but proves increasingly challenging to message to customers.

Pennsylvania – It’s official. After years of advocacy from Pennsylvania SEIA and its allies, Pennsylvania has officially closed its borders to out of state solar renewable energy credits (SRECs). What does that mean?

As context, Pennsylvania was the only remaining SREC state that allowed generators from anywhere in the PJM region to sell into its market. As a result, solar projects built in PJM in utility-scale markets such as Virginia or North Carolina, or even rooftop homeowners in Ohio, could sell every 1000 kilowatt hours – which is one SREC–into the state’s solar carve-out program as allowed previously by PA’s Alternative Energy Portfolio Standard (AEPS). This abundance of RECs meant that complying with the state’s very modest .5% by 2021 (yes, one half of one percent, as compared to the 5.3% being discussed in New Jersey) solar carve-out has been easy, and the market has been perpetually oversupplied. As of November 1, RECs in Pennsylvania were valued at $4/SREC. Low SREC prices have led to very little in-state build; SEIA estimates that only 38.8MW of solar were installed in 2016. For comparison, SRECs in neighboring New Jersey are valued at $196/REC, and last year, New Jersey installed nearly ten times the solar as PA at a whopping 361.4MW. New Jersey is also home to over 6,000 solar jobs, while PA employs only half that amount.

Does this mean that the solar market will rebound? Not necessarily, largely due to the already abundant oversupply combined with a modest renewables target. The legislation also grandfathers certifications (as it should to avoid lawsuits) granted by the effective date of the law, October 30^th, as well as solar generators already under contract. The latter language is especially murky, and as compliance entities typically contract under a REC volume, not an individual system, which may create challenges with enforcement. As a result, the law’s actual effects are to be determined, and the contracts language in particular will be subject to Public Utilities Commission interpretation.

In sum, the PA closed borders bill is a great, first step, and even more importantly, it shows that solar has bipartisan support in the PA legislature. With other states looking at 25%, 40%, or even 50% renewable energy targets, an AEPS increase in the coming years would be even better for stimulating development in PA – and seems possible after solar gained new allies with this bill.

SOLAR CHATTER

Community solar in Illinois is this season’s “it” market, and at Solar Power Midwest, it was clear that developers with pipeline in New York, Minnesota, and even Massachusetts are now shifting their focus to Illinois. Need a refresher on the Land of Lincoln’s emerging solar market? We’ve got you covered.
Updates to Michigan’s PURPA rules, something that we have been following for quite some time, could become a reality by as soon of the end of this month (pending Michigan Public Service Commission final orders). By updating its avoided cost methodology, creating 20-year contract terms, and standardizing avoided cost rates for small qualifying facilities (QFs) sized under 2MW, Michigan could become a new hot market for small utility-scale development. For more information, check out this summary from our friends at the Environmental Law & Policy Center.
With the Suniva trade case looming, it has been an interesting year on the solar coaster for many in this industry. In our opinion, operations and maintenance (O&M) companies are some of the most resilient in the solar industry right now due to the recurring nature of their revenue streams and a quickly growing market for their services.
We were expecting the initial procurement for SMART, the new Massachusetts solar program, to take place the last week of October. Unfortunately, the procurement was delayed, and as a result, pricing uncertainty remains. This is because the initial SMART procurement will set prices for subsequent blocks. The Massachusetts Department of Energy Resources has now updated the schedule, and November 27 will be the opening date for bid applications, with mid-January as the date to release the results. Meanwhile, hearings took place last month to increase the state’s net metering cap, a constant legislative issue in Massachusetts.
JEA, located in Jacksonville, Florida, has announced plans to procure nearly 300MW of solar. As we get closer to a federal investment tax credit (ITC) stepdown, expect more similar announcements from municipal utilities, coops, and investor owned utilities in 2018.
An additional 1.2 gigawatts of solar projects were added to the PJM interconnection queue in Virginia, likely in response to Dominion's RFP announcement to procure 300MW (probably for Facebook).
Our engineering team has been researching the wild, wild world of weather file selection, which is an important input for modeling the expected energy production of a solar project. There are a number of different public and private sources for this data, and the difference in solar radiation between different weather file sources for a single site can be up to 5%, no small margin. There are many factors to consider when choosing a weather file, and more nuanced research into the most appropriate weather file for a specific site may improve the value of projects.

ABOUT SOL SYSTEMS

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.

Author: Sara Rafalson