Economic Modeling Basics for A Solar Project

Happening on the  Solar Executive MBA Discussion Board…
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Construction Debt/Loans, SRECs & Purchasing vs. Leasing a Site
Student 1:

1. What is the difference between project debt and the construction loan?
2. What is SREC and Single SREC?
3. If the site is purchased and not leased, would one discount the purchase price with the same hurdle rate as the Customer NPV […]

Jigar Shah’s Call to Arms For Small Solar Companies Everywhere

This week I flew to Chicago for the Illinois Solar Energy Association fund raiser.  Jigar Shah delivered the keynote to 70 registrants, packed into Emmett’s Place in Palatine.  I left at 9:30pm with an excited sense that Solar PV in Illinois is going to take off.

This was my second Jigar Shah presentation, (here is my […]

The Battle to Reduce Solar’s “Soft Costs” is Starting and How it Can Increase Your Solar Company’s Profits

The solar industry is going through massive change. Module and balance and systems prices are dropping quickly, there has been an influx of new products, financing is becoming commoditized and the solar supply chain is shifting rapidly.

The results of these trends are two-fold: 1) bringing down the hard installation costs and 2) removing the financial bottlenecks in the system. Lower costs and easier financing equals more projects and faster industry growth. However, with the room to squeeze hard costs getting tougher, companies are now looking at other ways to decrease their costs in order to increase profits. One of the areas has been streamlining incentives and permitting paperwork.

Many reports have detailed ways the solar industry is drowning in huge amounts of paperwork.

The battle to reduce soft costs is being fought on many fronts. First, local governments, in Vermont for example, are working on creating more streamlined incentives and interconnection processes. The DOE has also launched a project to decrease solar’s soft costs.  Several companies are looking to address this issue with software. OnGrid Solar, Clean Power Finance, Eagle Eye and SolarNEXUS all seem to be addressing the issue from many angles.

I reached out to SolarNEXUS to get their thoughts on how companies can reduce soft costs to increase their profitability. Read past the break to read the full story and watch the interview.  Join HeatSpring’s facebook community to stay up to date with future updates.

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How do SRECs Work?

In Massachusetts, New Jersey, Pennsylvania and most of the east-coast and Mid-Atlantic solar markets, the main incentives driving the solar market are SRECs, which stands for Solar Renewable Energy Credits. If you’re looking to get into the industry or expand your current business, you need to know how they work, how to communicate their use to customers and where you can find more information if you really want to dig deep.

We’ve had a lot of people asking about them, and though the large developers have them figured out, we want to make sure the small guys are getting in on the action, too.
What are SRECs?
An SREC is a solar renewable energy credit. One is created for every megawatt hour (MWh) of electricity produced by a solar generator. Keep in mind that SRECs are sold separately from the electricity they produce. This means a customer with a solar array on their roof can use the electricity on-site and then sell the SRECs off to another buyer. The buyers are the utilities.

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