New Tool To Attract Solar Investors: Monitor Real-Time Performance

In one of many efforts to improve access to capital for solar projects, a new database will monitor their real-time performance across the US.

The National Renewable Energy Lab (NREL) is building the open-source database as part of the Department of Energy’s (DOE) SunShot Initiative.

Dubbed the Open Solar Performance and Reliability Clearinghouse (O-SPaRC), it’s intended to provide tools that give investors confidence and data from which investment vehicles can be built to tap low-cost public capital.

"The O-SPaRC dataset will provide the market with critical data on the long-term performance of residential and commercial solar facilities," says Michael Mendelsohn, Senior Financial Analyst for NREL. "This is an important step to tapping the public capital markets and offers the potential to significantly lower the cost of solar energy."

Using O-SPaRC, credit rating agencies and potential investors will be able to assess the underlying risk of solar as an asset class. It will also give the private market the tools to develop investment vehicles such as asset-backed securities, master limited partnerships, real estate investment trusts, and various debt products.

The work is funded by the DOE’s Office of Energy Efficiency and Renewable Energy. The SunSpec Alliance is building the database.  

Another component of the project is the Solar Access to Public Capital (SAPC) working group, whose goal is to develop standardized solar contracts – power purchase agreements, leases, and other documents – to enable securitization of solar PV assets and associated cash flows in the marketplace. They will also develop robust datasets to assess performance and credit-default risk.

These activities are designed to allow projects to be grouped into tradable securities. Securitization would attract more investors for solar projects, opening up a more liquid pool of capital than is currently available.

SunShot’s goal is to make solar competitive with other forms of energy without subsidies by the end of the decade. These are important ways to level the playing field for renewable energy with traditional forms of energy.

Another project along these lines is the truSolarTM Working Group, which is developing a credit rating for solar projects.

NREL also created a map that allows users to easily and accurately find potential renewable energy resources in the US.

With the solar industry booming, you’d never know that less than 5% of the 6500 banks and lending institutions in this country are actively involved in financing solar projects.  

Learn more about O-SPaRC:

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