Sol Systems launched a new $100 million fund to support commercial and large-scale solar projects. Under the new fund Sol Systems will support projects between 750 kilowatts and 20 megawatts in size.
Sol Systems said it already is conducting diligence on projects to fill the fund. It is looking for solar developers with projects that need construction and term debt financing. The company is looking for projects with investment-grade off-take contracts in place. The company will also consider other projects with strong non-investment grade credit particularly if a developer has a large project pipeline or if the projects promise exemplary returns.
The company, a boutique financial services company specializing in renewable energy, is launching the fund in an attempt to help fill the void for commercial funding. In former years—mostly prior to 2009 when solar was more expensive, the commercial solar market was much larger than the residential solar market in the U.S. However, commercial project funding has fallen as the residential sector and utility-sector have picked up.
“The absence of project level debt for distributed solar is a constraining factor in lowering the overall cost of capital in commercial solar projects,” said George Ashton, CFO of Sol Systems. “Sol Systems is proud to offer this product to the market as a tool to use in making commercial solar investing more efficient and available.”
The fund, according to Sol will finance both construction and term loans. The company said it also has lower minimum requirements and more flexible terms than other loan products designed to meet the needs of the commercial solar power sector.
“Loans may be as small as $1 million and sometimes smaller, depending on the opportunity, with tenors as long as 18 years on term loans,” Sol said. Such services could help reinvigorate the flailing solar sector.
Sol Systems helps connect investors with solar projects to offer a number of services to both sides. The company said it counts among its investors Fortune 500 companies, private-equity funds and independent power producers. The company works with both small solar installers and larger project developers to help them get the right type of financing to support projects, including providing SREC (solar renewable energy credit) financing services for homeowners.Tweet