Banks, credit unions and other lenders are beginning to offer loan products to homeowners and businesses in order to help with the costs of installing rooftop solar systems. However, there are a number of barriers to accessing this growing market and for this reason the Banking on Solar working group has been assembled by the NREL to address those barriers.
The working group now consists of more than 50 members representing the solar, banking, legal, regulatory, and financial industries, among others. Its efforts will concentrate on standardizing contracts and underwriting processes, as well as educating banks and regulators about the risks and rewards of solar assets. The group’s goal is to reduce barriers to entry for banks that wish to diversify their asset base and invest in a market with high growth potential.
“There are many states where third-party finance is unavailable and there are solar customers who may prefer to own their systems over leasing them” said NREL Analyst Travis Lowder. “A greater prevalence and diversity of loan products could enable higher rates of solar adoption in these markets.”
The group has already begun developing standardized loan documents and underwriting criteria in the residential and commercial markets and other solar debt markets, such as lending into tax equity capital structures, are also under consideration. The group is working in parallel with the SunShot Initiative-funded, NREL-led Solar Access to Public Capital (SAPC) working group which was formed to facilitate capital market investment via securitization.
The effort is being supported by the Department of Energy’s Office of Energy Efficiency and Renewable Energy through the SunShot Initiative. The Banking on Solar group will host several webinars in the months ahead to introduce banks to the solar asset class and will also have a presence at several upcoming banking conferences around the United States.
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