NEW MONEY MODELS IN SUN
Solar Finance Re-Invented: How Today's Projects Lure New Market Players
29 May 2012 (Solar Industry)
“Financing of U.S. solar projects is in the midst of a transformation, with new business models, new investors and new financing vehicles gaining sway, according to new research [in Re-Imagining U.S. Solar Financing] by Bloomberg New Energy Finance (commissioned by Reznick Group).
“U.S. solar projects have historically been bankrolled by some combination of energy sector players, banks and the federal government, but the landscape is rapidly changing. New business models are emerging, with an emphasis on third-party financing, the report says. New investors, including institutional players, are entering. New financing vehicles - such as project bonds and other securities - are being assembled to tap the broader capital markets…”
“The evolution toward a broader investor base is expected to help maintain growth for U.S. solar deployment. Asset financing for U.S. PV projects has grown by a compound annual growth rate of 58% since 2004 and surged to a record $21.1 billion in 2011, fueled by the one-year extension of the U.S. Department of the Treasury's Section 1603 cash-grant program…Funding the next nine years of growth (2012-2020) for U.S. PV deployment will require about $6.9 billion annually on average, the report says.
“Two factors are predicted to drive the evolution. First, traditional players [like eurozone banks and the Department of Energy's loan-guarantee program] are scaling back their participation…Second, thanks to the continuing low-interest-rate environment, nontraditional investors are becoming more interested, lured by the risk-return profiles of solar projects that employ well-proven PV technology…”