Innovative Solar Systems currently has two featured solar farm portfolios per month in the 500 MW-1 GW size range for interested utility-scale solar buyers. According to Innovative Solar, these portfolios typically afford buyers 13 percent IRR’s or higher and these deals sell quickly due to demand in the Solar Farm asset market place.
Well, if it’s any indication of the health of the value of solar right now, Innovative Solar says overwhelming demand, prices will be increasing on its “Shovel Ready” projects after Jan. 1, 2018 and the company will also introduce an Energy Royalty Agreement whereby each project will be required to pay ISS anywhere from 5-15 percent of the long term energy revenue from the project over the entire life of the project.
These Shovel Ready projects currently sell for a flat 12 cents/watt and an additional 85-90 cents/watt is charged under a construction EPC contract if ISS builds the projects for the buyer so when the transaction is finished the buyer is typically paying approximately $1 watt (ALL-IN) to own these Solar Farms.
The typical demographic of the buyers for these portfolios are any large-scale billion dollar fund and investors that can place a total of $60 MM-$120 MM over a 6-18 month period. The typical life of a Solar Farm asset is now 40-50 years and these assets are considered by many the crown jewel of investments due to their low risk, stable, long term returns.
— Solar Builder magazine