The U.S. solar industry has flourished over the past decade, with annual project installations growing exponentially since 2010. One well-known reason for this growth has been the rapid drop in solar equipment costs. However, solar growth has not only been a result of supply-side factors. Since 2015, a powerful source of solar demand has emerged – the direct purchase of solar power by companies with significant electricity needs. 
 
Why are companies interested in solar energy? 
Thousands of companies across the globe are making clean energy commitments to reinforce their relationships and brand value with their own customers. Because U.S. electric utilities have generally moved towards decarbonization too slowly for many companies to meet their internal goals, these companies have taken the initiative to sign direct contracts with clean energy projects. Figure 2 below shows the rapid growth of this market, which has primarily come from large-scale solar and wind projects. 
 
 
 







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Source: Renewable Energy Buyers Alliance
Figure 2 - Annual Utility-Scale Solar and Wind Projects Supported by Corporate Contracts
https://rebuyers.org/deal-tracker/ 
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How are the solar contractual agreements with corporate clients structured? 
As new corporate customers entered the solar industry, the solar industry transformed to serve a new set of needs. From 2010 to 2015, most large-scale projects pursued fixed price Power Purchase Agreements (PPAs) with electric utilities. In a fixed price PPA, a project sells its output to the buyer for 20 or 25 years at a set price and the PPA itself is signed prior to construction. 

A long-term fixed price contract can deliver benefits for both project and buyer. A solar project needs price certainty to be attractive for its own investors, and an energy buyer can lock in costs at an advantageous rate for the long term. A homeowner who has considered a 30-year fixed-rate mortgage versus a 5-year adjustable-rate mortgage can relate to the benefits of locking in long-term costs. 

Because the general corporate market has different needs than electric utilities, solar projects had to innovate within their business model to appeal to these customers. Investor and accounting pressures on large companies (especially publicly traded companies) make it much more difficult for these entities to sign long-term PPAs compared to utilities, even if those contracts would provide savings to current and expected energy costs. However, this creates a conflict with the project’s requirements for price certainty on a long-term capital investment. 
The solution to this problem was a hybrid contract: an upfront fixed price contract period that is shorter than a classic fixed price PPA with a “tail” period subject to market price fluctuations. Solar projects use the shortened fixed price period to achieve a minimal level of investor payback and then manage to fund their projects using variable cash flow projections. Figure 3 illustrates the distinction between fixed price PPAs and hybrid contracts. 

Fixed Price PPAs vs. Contracts with a Variable Price Component ($/MWh) 
Innovative business models expected in the solar industry 
Ultimately, the hybrid contracts shifted some risk to the solar project. However, because this new risk came paired with a large new marketplace, solar developers and investors figured out how to make the deals work. 
Considering the bright future of solar energy adoption, there will be a need for evolving business models and innovative debt and equity financing schemes. Active cooperation with utilities and local authorities will continue to add value to the financial feasibility of solar projects.  
If the U.S. power grid is to make further progress on decarbonization, Distributed Sun expects to see and help create further business model innovations in the solar markets. Only through reaching as many customers as possible will the solar industry be able to claim its rightful place on the U.S. power grid. ​

Written by Paul Holshouser 

This post puts the spotlight on another valuable member of the Distributed Sun team: Paul Holshouser!
 
Paul is the Senior Director of Project Finance here at Distributed Sun. He is a part of Distributed Sun’s key decision making team for deal valuation, review of legal documentation, and retention of partner relationships.
 
University of North Carolina at Chapel Hill is where Paul decided to earn both his undergraduate BS in Business Administration and his MBA a few years later.
 
In between his time in Chapel Hill, Paul spent six years as a Risk Officer at Wachovia Corporation in Charlotte, North Carolina. It was Wachovia that introduced Paul to renewable energy when his team began making tax equity investments into large-scale wind farms. This experience opened his eyes to emerging business opportunities in clean energy and he decided to redirect his career to focus on renewables.
 
After graduate school, Paul served the wind industry at the American Wind Energy Association for five years, providing market analysis to the wind finance industry and working to convert market data into effective tax policy.
 
Since joining the Distributed Sun team, Paul has closed financing for projects commencing operation, supported the sale of operating assets several years into operation, and managed sale negotiations for development assets. Paul supported the full development cycle for Distributed Sun’s SUN8 portfolio – a 110 MW portfolio of solar projects that is now fully constructed and generates enough energy to power over 20,000 homes.
 
As Paul excitingly states: “Distributed Sun’s role as a policy innovator in New York helped us to deliver much of that portfolio to “shovel-ready” status within months of rulemaking. Our speed to market helped the state prove the viability of the community solar model”.
 
During his years working in the solar energy industry, Paul has witnessed how community solar in New York enhances the potential of solar projects to create win-win situations across many parties. The essence of community solar is to reach customers that are unable to install solar directly (roof conditions, home ownership, etc). Moreover, landowners and local counties benefit from significant lease and property tax revenues, while neighbors can sleep comfortably knowing that their local energy supply will not impair their water supplies or air quality. These wins are also reflected at a macro scale, where the local utility is able to decarbonize their grid in a highly cost-effective way.
 
However, to effectively coordinate all these actors and make deals happen in a dynamic environment is not a trivial task. This is why Paul believes that de-risking projects and expertise in amplifying the winning synergies across so many parties are among what distinguishes Distributed Sun in successfully bringing solar projects to operation.
 

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We are excited to highlight another member of our team here at Distributed Sun - Chet!
 
Chet joined Distributed Sun in 2014 and brings a great amount of engineering experience to our company. He began as an Operations Manager but took on the role of Director of Engineering in 2017.
 
Chet attended the University of Maryland where he earned his bachelor’s degree in Civil and Environmental Engineering. He then went on to complete his graduate degree at the Imperial College London - one of the top technology schools in the world and at the time one of the few schools, along with MIT and Stanford, to have a renewable energy graduate program.
 
Chet had the opportunity to work under Professor Jenny Nelson, a leading figure in organic solar cells and the author of Physics of Solar Cells, and was inspired to write his thesis on the deployment of thin-film photovoltaics in rural Africa. His key finding was that solar home systems in rural areas are an effective way to provide electricity to households that otherwise cannot access it. As an interesting parallel in 2013, energy storage costs were still one of the larger barriers to adoption of renewable technologies in these areas.
 
Prior to his work at Distributed Sun, Chet spent six years working with Bechtel Corporation taking a number of roles from hydraulic engineer to field geotechnical engineer to hydrologist. Chet had the opportunity to work in the domestic power sector and on international mining projects. Chet was excited to see the Southern Vogtle plant come online after running calculations on water systems almost 15 years prior. He also worked at the electric generating facility in the Mojave Desert and this is where he got an introduction to the large-scale world of renewable energy.
 
Once joining Distributed Sun, Chet helped the team deliver Cornell University on their first MW-scale solar array at Snyder Road. This project was the second MW-scale project to be installed in Upstate NY - a huge achievement for the company and the state of New York as a whole. Since then, Chet has continued to help Cornell with the execution of almost 40 MW for their renewable energy portfolio.
 
His experience with Distributed Sun has been varied in terms of tasks and projects. He has worked with everything from preliminary simulations to energy simulations to systems layouts, closing with landowners, negotiating PILOT agreements, and handling due diligence with institutional investors.
 
Chet notes that Distributed Sun has made great strides since when he first began. Distributed Sun began with the ownership and operation of 50 kW solar arrays in the Mid-Atlantic, but it since has gone on to find many new opportunities in states and industry segments that at first were unexplored. He is excited to see how Distributed Sun will continue to grow.

As a renewable energy development company, Distributed Sun is proud to contribute to improving the energy system by decreasing the emissions impact of every incremental megawatt to come onto our local electricity grids. All our electricity is emissions-free, and for all our projects, we ensure that stormwater flow quantity and quality are maintained at our sites.

However, as a new technology (at least in the eyes of many of the rural communities in which we work), we often get the question of “how will your solar array affect long-term land use changes?” Of course, we are leading with many of the best management practices from concrete-free racking foundations to pollinator-friendly grasses to forward-thinking decommissioning plans. With modular equipment and a lack of moving pieces, we can plan for a much lower impact on the implementation of civil works.

On this Earth Day 2021, we are proud to add that we can safely support and co-exist with endangered species. We have recently coordinated with the New York State Department of Environmental Conservation on a Net Conservation Benefit Plan to preserve habitat of the New-York-State-listed short-eared owl (Asio flammeus)!

At one of our project sites in Upstate New York, our team discovered 35-year-old reference to the short-eared owl breeding in the area. In order to responsibly continue on this project, we engaged with qualified environmental consultants who visited the site and confirmed the presence of this beautiful bird. As this raptor,  like many other species, is finding challenges in segmented habitat, we drove our stakeholders (the project, the NYSDEC, and the landowner) to find a mutually agreeable solution.

NYSDEC wanted to ensure that the owl could have pristine, preserved habitat to help its owlets survive the challenges of ground nesting. Our landowner agreed to help and set aside land with the caveat that he wished to continue his family’s hunting on the property, as it has always been. In an inclusive process, Distributed Sun engaged the parties and found the happy medium – a permit was issued and the project will go into construction this spring.

So please connect if you want to learn more about how we can help keep the skies clear and the land safe for our species of concern.

Meet Bridget, one of our newest employees here at Distributed Sun.

Bridget joined Distributed Sun in December 2020. As a Senior Solar Developer, she is primarily responsible for overlooking project life cycles with everything from site selection to design, permitting, interconnection, EPC selection, construction, timeline management, and the final launch of commercial operations.

Bridget learned importance of sustainable practices at an early age. As a child, she lived on a farm and loved to spend time outdoors. She was raised with a deep respect for animals and nature as a whole, and this passion has carried with her throughout her schooling and career path. Although originally interested in veterinary practices, she shifted her focus to environmental topics in school to pursue classes related to global warming and climate change. She has worked to obtain skills and experience in government policy positions, private entities, and non-governmental organizations during her undergraduate schooling.

Bridget earned her Bachelor of Science from Virginia Tech in 2017 in Sustainable Biomaterials with a minor in Green Engineering. Throughout her undergraduate experience, Bridget participated in a number of extracurricular activities and internships. She served in Virginia Tech’s Office of Sustainability for two years, leading teams of interns focused on energy and recycling initiatives across the school’s campus. During the Obama administration, she completed an internship with the Department of Energy in Washington, D.C., in the Office of International Climate and Clean Energy.

Bridget has also participated in international non-profit work, traveling to a remote village in Ghana where she assisted in establishing a small solar business intended to bolster local economies while lessening community reliance on toxic fossil fuels such as kerosene. In creating this system, Bridget gained a global perspective on sustainability development.

Prior to joining Distributed Sun, Bridget worked as an engineering manager in the residential homebuilding and development industry. Her experience gives her unique insight into organizations that do not prioritize sustainability or understand the benefits of renewable energy deployment. Bridget’s life goal is to see a change in the global perception of sustainability. She hopes to encourage others to see the economic and environmental value of being resource and material conscious.

Bridget is excited to be working on corporate, community, and utility-scale solar development at DSUN, especially given her understanding of the inner workings of organizations without a sustainability focus. She knew that she would be a great fit at Distributed Sun after meeting the team and seeing the great work that we do here.

“I believe in the power of the company one keeps, so if I’m going to be the best at what I do and make as much of an impact as I hope to, I have to surround myself with people that challenge me and push me. To be the best, you must surround yourself with the best. That’s what Distributed Sun is.”

What skills does Bridget uniquely expect to master now that she has joined our team?

“Versatility. The wider the range of skills and disciplines I master, the more lethal I can be in the fight against climate change. I have the opportunity to work on, learn about, and master a wide variety of different skills and disciplines in many different aspects of the Renewable Energy industry, and that’s what differentiated DSUN from other businesses.”

We can’t wait to see all of the great work that Bridget will do!

We are proud to support the energy transition and sponsor the Clean Energy for America Inaugural Ball. Please join us and celebrate President-elect Biden’s goal of 100% clean energy by 2035.

The Energy Transition is accelerating with newfound energy and buzz as the Biden administration and Democrat-control of both houses of Congress are set to focus US energy policies in 2021 and for decades to come. The energy transitions unfolding today were almost unimaginable ten years ago – with 90% of new generation built globally last year coming from wind and solar. Electric vehicles among new car sales are surpassing 50% of all automobiles sold in some countries. The arrival and passing of peak oil is now admitted by the oil companies themselves; and, centralized and peak powerplants are making way for distributed generation and battery storage. One-hundred years-old incumbent players, technologies and models are finally, today, surrendering to this inevitable change.

Whether you see “transition” as brown to clean, consumption to conservation, waste to efficiency, finite to infinite or “fill in the blank,” it is happening everywhere and driving big changes even among renewable energy businesses – even before President-elect Biden steps on the gas electric pedal and speeds things up.

Distributed Sun’s growth in recent years reflects the intensity of corporate and consumer demand for cleaner alternatives. While our 2020 was unlike Tesla in scale, it was very Tesla-like for us with record-breaking performances in profitability, growth and other KPIs. New hires (↑six), cost reductions (↓15%) and development pace (↓22% fewer days in development – to 14 months from start to NTP for community solar) all leapt past our benchmark and stretch goals. DSUN achieved runaway results in 2020 with tangible project and revenue backlogs that position the company to accelerate and extend these gains in 2021 and the years to come.
When we founded the business in 2009, we knew clean energy and technologies were no fad, no passing trend or even a mere or momentous generational shift, but something epochal, irreversible. And, we wanted to help make it happen. Back then, C&I rooftop solar in Mid-Atlantic states was the present-day gold rush. It was our backyard and an obvious place to start. But we suspected then, as we know so well now, the path forward would push and pull us into different segments, new geographies and even technologies not considered at our founding.

As we pass 200 MW of community solar projects delivered and focus development on the next 100 MW, we are making significant investments in other key segments, including: 1) large corporate renewables (DSUN expands deployed C&I solar from 11 to 15 states in 2021); and, 2) utility/transmission-scale (500 MW in development) practices. DSUN transitions to Gigawatt-scale solar deployed while its scope grows to include a wider complement of new energy and carbon footprint reduction technologies.

​We count our blessings to have thrived during 2020 while so many struggled to survive. Those tragedies are not lost on us. Three beloved and amazing people – family of our close team members – lost their battles with COVID last year. We remember them as they humble our spirits and deepen our appreciation for the successes we have enjoyed. 
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Chase Weir
Executive Vice Chairman and Co-Founder

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