Solar container project securitization

Can solar be securitized?

Some securitization experts anticipate that once solar achieves greater market penetration (in both the commercial and residential sectors) and as investors become more familiar with the asset class, originators can transition away from private offerings and seek financing in the public markets.

Is solar a good asset class for securitization?

In conversations with NREL, securitization experts seemed to agree that solar, as an esoteric asset class (see Section 3.1) that will likely be issued on the private markets, may come in at lower credit ratings and higher yields than securities based on more conventional forms of collateral, at least for the initial transactions.

How much does a commercial solar securitization cost?

If commercial solar securitizations will be trading in the CLO market, and would eventually be issued at the average offering size, a single commercial solar securitization transaction could cover up to 250 systems of 400 kW capacity at 25% of the capital stack, assuming an installed cost of $4/W.

What is a solar securitization transaction?

Makes payments on the assets (e.g., loans, leases, and contracts) to the originator. These payments will be pooled with others, and will collectively form the basis of a securitization transaction. In a solar securitization, the obligors are the solar customers who have leased the solar equipment.

How important is O&M for solar securitization?

According to several solar industry stakeholders and securitization experts, applying uniform standards and having dedicated O&M providers are crucial to the likelihood of an asset pool generating the expected level of cash flows for a securitization deal.

How many solar systems can be financed through a securitization?

Assuming an initial securitization is sized at $100 million, and these funds cover 50% of the system cost for each project in a portfolio of installations, roughly 7,273 residential solar systems, or 333 small commercial systems, or 44 larger commercial/industrial (C&I) systems could be financed through a single issuance (see Table 3).