Any time you get a few solar financiers together, the conversation inevitably turns to the potential of financial tools and pooled assets such as securitization, REITs, and MLPs to disrupt the world of solar finance.
If those conversations are right, then today is a red-letter day.
SolarCity just announced its intent to offer a private placement of $54.4 million of an “aggregate principal amount of Solar Asset Backed Notes, Series 2013-1 with a scheduled maturity date of December 2026,” as per an SEC document.
That’s securitized solar, and it’s the first time it’s being employed for distributed PV. (We published The Encyclopedia of Solar Securitization in September.)
As defined by GTM’s Stephen Lacey, “Securitization is the practice of pooling disparate sources of debt and selling it as a package to investors on the secondary market.” You might recall that process being applied to package debt such as mortgages and loans as part of the machinery of the recent global financial crisis. Nevertheless, in solar — securitization improves liquidity and can spur demand. (Securitization could be applied to energy efficiency as well.)
If you’d like to discuss energy issues, contact Court Rich, director of Rose Law Group’s Renewable Energy Department at email@example.com