Below are soundbites from panel discussions at Solar Power International on September 25 and 26 in Anaheim, California. Overall the conference was well-attended and the panelists and audience seemed optimistic regarding current and future opportunities.
The soundbites are organized by topic, rather than presented chronologically. The soundbites were prepared without the benefit of a recording or a transcript and have been edited for clarity.
Topics covered include tax equity, the solar start of construction rules, the investment tax credit (“ITC”) and tax basis risk after the Federal Circuit’s opinion in Alta Wind, the inverted lease structure, back-leverage debt, storage, community solar and merchant projects.
Macroeconomic Factors for Solar and Tax Equity
“Rising corporate profits have caused more tax equity to enter the market. That has shifted the negotiating leverage to the sponsors.” Managing Director, Money Center Bank
“Tax equity always needs to fund around 40 percent of the capital stack in order to use the tax benefits efficiently.” Managing Director, Money Center Bank “Equipment costs continue to come down. Module prices are back to where they were before the tariffs at 30 to 40 cents a Watt.” President, Diversified Solar Services Company
“There are greater economies of scale for utility scale solar than for residential or C&I. As module prices drop faster than that customer acquisition costs, utility scale will become a larger portion of the market.” President, Diversified Solar Services Company
“I am very bullish on next year. This has been the best year ever from a volume perspective, not from an income perspective, because the market is causing us to charge less.” Managing Director, Regional Bank
“Falling electricity prices aren’t leading to sponsors raising less capital, because sponsors have been beating down lenders and service providers.” Managing Director, Regional Bank
“Capital providers are taking more risk for less return.” Managing Director, Regional Bank
“Residential solar debt has become an accepted asset class.” Managing Director, Regional Bank
“Soft costs, such as marketing, legal, accounting and tax advice, are five to seven percent of a solar project’s cost in Europe and Asia; they are 35 percent of solar project’s cost here; we need to attack that.” President, Solar Developer