Debt securities may have helped bring down the global economy during the Great Recession. But asset-backed solar bonds and other financial instruments, crowdfunded by enlightened consumers and investors, could prove much more lucrative — and perhaps save our sorry butts from the worst of climate change.
It’s a logical conclusion to draw after SunPower (logically) announced it too is joining the securitization game like Solar City, the first player to make the jump last year. SunPower launches the first tranche of notes backed by its leases in the second half of 2014, in hopes of raising hundreds of millions for 2015 and beyond.
But they’re simply following wider cultural and economic patterns — from renewable energy to Kickstarter to bitcoin and more — leading to a future where consumers have decarbonized and decentralized their lives.
“There are global trends both towards decentralizing our financial system and our energy grid,” explained Billy Parish, president of Mosaic, the model crowdfunder that beat bigshots like SolarCity, SunPower and those who follow to the punch.
“I believe we will see more and more people participating in financing clean energy projects and going solar with an inexpensive loan financed by their fellow Americans,” he told SolarEnergy. “The transition to clean energy is a huge business opportunity that investors in the private sectors are excited to tap into.”
Some of solar’s recent record-breaking performance of the last few years comes thanks to government support and influence. The Obama administration’s federal investment tax credit of 30 percent helped coax private capital into the sector, but in 2016 it decreases to 10 percent. That is an election year, one should note, featuring a climate crisis pounding on the electoral door.
“The government has done a great job jumpstarting this,” Parish added. “The Department of Energy’s Sunshot program, of which Mosaic is a recipient, has instigated $18 of private sector funding for every $1 of grant money given to solar projects.”
SunPower told SolarEnergy that it didn’t have anything further to add yet to its securitization news — which is always welcome news, whoever may announce it. But it’s a fair bet that SunPower and SolarCity and those who follow turn to asset-back solar bonds to rebalance decreased government funding with more attractive public financing. It’s also a good bet that SunPower has listened to the institutional investors, and market makers, who have been known to hedge depressions suspiciously well.
“We believe SunPower is likely to be a victim of its own success in the near-to-medium term, with project timing and capacity constraints making for tougher [year-over-year] comps moving through 2014″ argued Goldman Sachs, which recently slapped a safe neutral rating on SunPower’s incendiary stock, which tripled last year. “We continue to see better upside in our Buy rated favorites.”
With underwhelming endorsements like that from the private sector, as well as an election-year decline in financial aid, it’s little surprise that bigshots like SunPower and Solar City are thinking of joining up with indies like Mosaic to take their business directly to Earth’s people. From its zero-down terms to its zero-emission goals, the solar industry’s new century is much brighter than the Industrial Revolution that preceded it. Now it just has to beat global warming to the punch.
“We don’t have much time, but the transition to clean energy is well underway,” Parish concluded. “In three of the past four months, 99 percent of new electricity put on the U.S. grid was renewable energy. Last year, a solar system was installed in the United States every four minutes. We need this trend to continue and installation speed to pick up.”
Solar roofs photo CC-licensed by Kevin Baird on Flickr.