If you are interested in the details of how the Sol-20 came to be, I highly recommend you read Lee Felsenstein's own story published in ROM magazine, July 1977.  Here I want to focus on the people involved all of whom are luminaries in the early personal computer era.

Lee Felsenstein was the principal designer of the Sol-20.  The design was based on a Tom Swift Terminal concept he had been working on and the VDM-1 graphics card he had developed for Processor Technology.  There is also some reports that Gordon French, founder of the Homebrew Computer Club, was also involved in he development. Lee would later go on to design the Osborne 1 in the early 80s. 

Processor Technology Corporation was a personal computer company founded in April 1975 by Gary Ingram and Bob Marsh in Berkeley, California. Based on their relationship with the development of the VDM-1 graphics card and other projects, Bob Marsh commissioned Lee Felsenstein to design and build the Sol-20.  Bob and Lee were also founding members of the Homebrew Computer Club.

The design was originally suggested by Les Solomon, the editor of Popular Electronics. Les Solomon was instrumental in getting the Altair 8800 launched with a featured article on the cover of the January 1975 issue of Popular Electronics. He asked Bob Marsh if he could design a smart terminal for use with the Altair 8800.  So the Sol-20 was initially positioned as a smart terminal to satisfy Les Solomon's request, but of course was a capable stand alone computer under the covers.

One final thought. This is an excerpt from a March 31st, 2014 Engadget article:

Many readers won't be aware of the importance of the SOL-20 to Apple's legacy. According to legend (aka Walter Isaacson's book Steve Jobs) in 1976 at the first annual Personal Computer Festival, held on Labor Day weekend, Steve Jobs and Steve Wozniak arrived with the Apple I in a cigar box. While Jobs walked around the exhibition hall, he was reassured that the Apple I was better than the competition in terms of functionality.

There was just one thing nagging at him; the SOL-20. According to Isaacson, Jobs was confident that his product had the best circuitry, but the SOL-20 was better looking. It came in a beautiful metal case, with a built-in keyboard and power supply. When compared to the scrappy Apple I, the SOL-20 looked more like a professional machine.

Funny coincidence that the Apple II also looked more like a professional machine with a built-in keyboard and power supply.