2016 Solar Securitization Deals Already Eclipse 2015 Deals

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Originally published on Sustainnovate.

Marathon Capital: 2016 Solar Securitization Deal Already Eclipse Those Of 2015

The value of solar energy securitization deals completed so far this year already eclipses the total for all of the deals completed in 2015 combined ($234 million), according to a new study from Marathon Capital.

The $235 million worth of deals completed so far this year puts 2016 on track to surpass the record level of solar securitization deals seen back in 2014 — presuming the current rate of deals continues, of course.

The new paper — titled “The Solar Secularization Opportunity” — speculates that falling “macro credit conditions” are likely to be one of the main drivers behind the high level of deals seen so far this year.

The study notes that SolarCity is responsible for essentially all of the total so far this year — having sold $235 million in solar energy bonds so far in 2016. Back in 2014, when the previous record level of solar energy securitization deals was set, SolarCity was responsible for a substantial portion as well.

The CEO of Marathon commented in an interview with Bloomberg that issuances are likely to continue growing this year, thanks to increasing interest amongst solar energy developers.
“There are a number of existing and new issuers that are actively pursuing securitization strategies,” he stated.

The company predicts that Sungevity, Spruce Finance, Sunnova Energy, and Vivint Solar are all likely to show increasing interest.

“The universe of distributed solar financier that can steadily deploy a large volume of solar systems is growing but still relatively small,” the report went. “Securitization first movers SolarCity and Sunrun both have proven ability to deploy over 35 megawatts (MW) — the approximate minimum securitization size — every quarter.”

“In the long-term, solar securitizations will generally have a higher cost of capital and lower advance rate than traditional securitized asset classes due to greater expected loss given default, even after the asset class develops a proven track record.”

Image via ROBERT HUFFSTUTTER (some rights reserved)


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