Solar energy is clearly experiencing broad residential and commercial growth. The drivers of this growth in solar installations have been dramatically lower installation costs, steadily increasing electricity rates and the continued availability of the federal investment tax credits.
More still needs to be done to address the financial structure of these projects so that credit can flow into these projects. A group of developers, contractors, and investors have convened a working group under the “truSolar” banner to address these issue. Here are two articles that discuss the working group. One from early in 2013 reports on the formation of the group and the other from Renewable Energy World.Com this past week reports on the group’s progress and goals to date.
The opening of the Renewable Energy Article is a great summary of the effort – “Quick, what’s the biggest cause of brain damage for solar developers when structuring a PPA? Financing. Along with a shortage of tax equity in the post-1603 environment, arranging debt financing can be even more onerous — most lenders still view the solar asset class as exotic with a high risk profile due to a lack of industry standardization. The solution might just be the truSolar initiative, an industry credit screen intended to reduce project risk to lenders and increase debt financing on PPAs with third-party ownership. Think of it as the Kelly Blue Book of solar.”
Here is the link to truSolar’s website. There are other groups working on the challenges of solar project financing but it is good to see industry coming together to try to create a more workable model.