How We Work
Solaris focuses on a section of the market which we see as currently underserved – the small to mid scale commercial market – with an added focus on schools, non-profits, and municipalities. While no project is too large for us to tackle, we also finance systems that most other developers find too small or too complicated to take on. These projects tend to see the same average investment returns as larger projects but do not have the same market competition. Our goal is to open this large and growing share of the solar market to the same financial vehicles available to larger commercial and utility projects. We also pride ourselves on developing solar projects with a personal, hands-on approach that minimizes hassle for all parties.
Our custom in-house financing includes a mix of debt and equity investment which is unique for each solar project. Investors typically fall into three groups: tax investors, equity investors and debt providers. Tax investors take advantage of federal tax credits and depreciation that lower their tax burden and they can be invested in a project for as little as six years. Equity investors are typically in for the long-term and derive their returns from the consistent cash flow generated from the sale of electricity and renewable energy credits created by the system. Debt providers benefit from a fixed interest rate on the funds they provide. Typically, each solar project built requires the client (the energy buyer) to sign a Power Purchase Agreement which specifies the rate per kilowatt hour produced by the system that the client will pay every month for a term of 20-30 years. This creates a guaranteed and consistent cash flow from the project to pay back loans and investors.
A majority of our current investors are long-term equity investors who are also able to take advantage of federal tax credits that increase the value of their investment. Since each solar project is a separate legal entity, investors can capitalize just one project or an entire portfolio if desired. Depending on the type of investment, investors can invest for a medium to long term. Tax equity investors hold their investment for at least six years after which they can sell their interest and exit while equity investors tend to invest for 20 years or more in order to take advantage of the consistent cash flow returns.