America enjoyed record-high solar photovoltaic installations 2011, spurred by low module prices and favorable government funding mechanisms. But the expiration of the U.S. 1603 Treasury Program complicated financing for new residential solar projects and left the industry with a cloudy investment outlook.
Fortunately for installers and consumers, a new financing mechanism from Clean Power Finance (CPF) may help harness the potential of solar renewable energy credits (SRECs) to bridge the growing financing gap and continue America’s residential solar power surge.
CPF’s Capital and Trading service will allow investor partners to take advantage of SREC systems in states like California and New Jersey, where renewable portfolio standards mandate utilities obtain a percentage of their electricity from renewable resources. Each state’s market has its own set of rules, which may slow investors looking to take advantage of solar carve-out programs across multiple states.
The Capital and Trading service will create a new platform for investors looking to provide capital for solar marketers to cover the cost of installing third-party residential and business solar systems. Unlike SREC brokers who just match buyers and sellers, CPF will be taking ownership of the SRECs to provide liquidity to the market and reduce exposure for solar investors.
“We see CPF as a multi-million dollar/year opportunity over time as we buy and sell SRECs to truly create a market,” said Kristian Hanelt, CPF senior vice president of renewable capital markets. Hanelt added the system “will provide solutions to reduce the commodity exposure for our funds and financing customers.”
CPF is an interesting model, one well suited for today’s evolving solar industry. Its online residential solar finance marketplace offers business-to-business solutions to solar professionals who want to offer competitive finance options to residential customers. Through a variety of power purchase agreements (PPAs) and leases, CPF helps to lower the upfront costs of going solar.
The model seems to be working. CPF facilitates as much as $1 million in residential solar project financing every day, and last year 40 percent of all residential solar systems in the U.S. were sold using CPF tools. Incredibly, today, over a third of all residential solar deal flow in the U.S. happens within CPF’s online solar sales platform.
So, is CPF’s Capital and Trading system the future of America’s solar industry? California has enjoyed an 80 percent surge in third-party residential solar installations, driven largely by lower-income communities. The Sunshine State hints at a much larger non-affluent population that wants solar power but can’t afford it themselves. If CPF can provide a stable investment outlook, it may just realize its goal of mass-market adoption of residential solar.
Solar installer image via Shutterstock