Bipartisan Discussion on PACE
You might be surprised by who’s currently leading the charge in the commercial solar market.
As we head into Earth Day weekend, it’s easy to get caught up in the attacks on clean energy. There is no question that federal tax reform, the International Trade Case and withdrawing from the Paris Climate Treaty created a year of uncertainty for the U.S. solar industry. Despite these obstacles, there are a lot reasons to remain optimistic regarding our clean energy future. I continue to be inspired by the leadership of major corporations like Google, Apple and Microsoft, who according to latest Solar Means Business report from the Solar Energy Industry Association are major contributors to 3 Gigawatts of installed solar in 2017.
Earth Day was founded nearly 50 years ago, and within the first decade President Carter put solar panels on the White House roof. But for nearly 3 decades following that the industry barely grew. Now, the latest Market Insights Report released last month continues to demonstrate the resiliency of the industry as costs continue to decline and investments continue to rise. It should come as no surprise that the industry continues to grow. We need to be celebrating this for Earth Day!
As of the end of 2015, there was nearly 25 GW of solar PV installed in the United States. In the last two years, the solar industry has more than doubled its total installed capacity to 53.3 GW. And the industry is on track to more than double over the next five years. That means an average of over 15 GW of PV capacity will be installed annually in the U.S. between now and 2023.
A changing financial landscape
The Commercial and Industrial (C&I) solar markets (representing 80% of non-residential pv) remain a still untapped opportunity for continued market growth. While, the non-residential sector grew 28% year-over-year, this was primarily driven by regulatory demand pull-in from looming policy deadlines in California and the Northeast, in addition to the continued build-out of a robust community solar pipeline in Minnesota.
Unfortunately, project finance remains a challenge for the C&I market, but there continues to be innovations addressing these soft costs. Last fall, SEIA released a white paper examining Commercial Property Assessed Clean Energy (C-PACE). C-PACE a allows a property owner to finance 100 percent of the cost of solar and/or energy efficiency upgrades as a voluntary property tax assessment on a commercial building for 10-30 years.
In addition to new C-PACE opportunities, the financial landscape continues to evolve to bring new capital into the market. CleanCapital is at the forefront of this financial revolution. We are changing the paradigm by bringing liquidity to a historically capital inefficient clean energy marketplace. To date, we’ve acquired nearly $100 million in operating solar assets across ten US states consisting of high-quality school, universities, and government facilities.
Will investors join corporations and pave the road to 100+ GW of U.S. solar?
As demonstrated in the latest Solar Means Business Report, the private sector remains committed to a clean energy future, but very few institutions have invested. To ensure that we remain on track, we need to empower institutional investors with information that helps them understand clean energy investments and the underlying risk. Earlier this month, CarVal Investors partnered with CleanCapital to pursue $1 billion in clean energy investments. CarVal is forging the path for other investors to tap into the distributed energy markets.
Our proprietary technology platform identifies, screens, and manages clean energy projects enabling project owners an opportunity to exit their portfolios while providing investors unique access to the clean energy investment market. We’re excited to provide capital to cash strapped project and cash flowing assets to potential investors and in the process fund the journey to 100+ GW of U.S. solar.
Interested in learning more? Let us know.