Success of solar power in recent years built on innovation in technology and manufacturing. Today, innovative financing models are just as important and a robust and creative approach to technical assurance is essential.
Bright Ideas focuses on mega trends in solar finance which are reshaping the globalisation of this technology:
Third party ownership and securitisation
Securitisation is not a new model, but its application to the solar sector is reducing the cost of capital for domestic-scale solar deployment. DNV GL acted as Technical Advisor on the first major example of solar securitisation in 2013, helping to raise USD 54 million in asset-backed securities.
New equity offerings, corporate structures and bonds
New sources of debt and equity are emerging. Yield cos which pool operating solar assets into a publically listed company, with the majority of cash flows from power sales converted into dividends for shareholders. focuses
New routes to market
The way that solar PV projects interact with electricity markets is undergoing its own revolution. Alternative offtake structures such as direct sales and even merchant solar plants are on the rise. The traditional role and model of a power utility is being challenged. New types of off-takers are stepping in with greater liquidity in PPA markets and increased opportunities as a result.
The wisdom of the crowd
Community and crowdfunding models are also becoming more important - connecting investors and projects directly and cutting out the middle man.
Confidence in returns The Bright Ideas discussed in our report are financial innovations that are happening somewhere in the world right now. Most of these ideas are proposing a new approach to existing business practises, whilst others seek to connect investors and projects directly: an entirely new take on financing.
Still, amid the excitement and change, one unwavering principle will persist: investors’ returns are only as good as the solar assets that underpin them. The independent security of technical risks thus remains utterly critical – building the confidence required for these Bright Ideas to flourish.