Solar Financing Options and the Benefits of Each

The residential, commercial and utility scale solar financing markets are different and have their own dynamics.
If you’re really interested in learn more about financing commercial solar PV projects, I have three resources for you.

Click here to sign up for our Solar Executive MBA and Learn how to Finance Commercial Solar PPAs from A to Z
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The residential market is driven by 3rd party PPA providers and companies offering their own in-house financing. For example, 3rd party providers include SunRun and BrightGrid , as well as companies offering their own in-house financing, like SolarCity. The 3rd party companies provide a useful tool because it allows smaller companies to compete with the larger SolarCity types by allowing them to offer competitive financing. Each of these companies has been able to tap into large amounts of institutional capital by providing stable returns.

The utility market (20MW+) on the other hand, is very concentrated and is typically dominated by manufacturers who create or buy their own development department. In the SEIA’s last report 51% of the utility market was dominated by only 12 firms. As you can see from the list of top utility solar developers below most are manufacturers, and the majority of the independent developers, like Recurrent Energy, have been bought by manufactures. Recurrent was recently acquired by Sharp last year.

The commercial market in the built environment is a different environment from both utility and residential scale, as it requires a more technical understanding of solar, structural and roofing of the building then residential but is also heavily dependent on financing.

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How to Create a Solar PPA

Today the US solar market is booming–67% growth in 2010, according to SEIAs 2010 Solar Market Trends Report–easily the fastest growing industry in the US. In the US Solar photovoltaic market, there are largely two main obstacles to growth. The first is stable long-term policy and the second is financing.

More and more HeatSpring alumni, students and prospective students have begun to ask more about financing, and while we understand financing from a very broad level, we wanted solar financing experts to discuss many aspects related to financing. If you’re interested in writing an article for our series on solar financing, please email me at support@heatspring.com. We are confident that an installer’s ability to understand the various ownership structures and tax equity options, as well as structure PPAs and SRECs, will make them better able to develop projects.

If you’re very interested in learning more about financing commercial solar projects, I have three resources for you

Learn how to Finance Commercial Solar PPAs from A to Z Sign up for our Solar Executive MBA
Take a free course from our expert solar finance instructors Mastering Commercial Solar Finance
Access 60 minutes of videos answering 8 questions about best practices for financing commercial solar power purchase agreements.

The purpose of the series is to help small and medium size solar installers who are in a specific situation. Each article is written to help a small installer who has only been doing cash projects but suddenly have a large commercial installation that could be completed if only they could help the client with financing.

Our first article is about the development of solar PPAs from Heather South, who works with One Globe Renewables in Colorado.

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