Financing solar projects can intimidating, particularly for investors who aren’t necessarily attuned to all the potential pitfalls that exist. Now, thanks to a guide produced by the Solar Energy Industries Association (SEIA) and kWh Analytics, those potential investors will have a better idea of what risks exist – and how to manage them.
The recommendations were borne out of a collaboration between SEIA, kWh Analytics, the association’s Solar Energy Finance Advisory Council (SEFAC) and the U.S. Department of Energy Orange Button program. Called the Best Practices for Solar Risk Management, it offers current and potential financiers a roadmap to get through the process of investing in solar projects with fewer unforeseen headaches.
“Our goal is to facilitate new sources of investment capital for solar projects across America by communicating and leveraging the standards and practices the industry has already developed to measure and manage risk,” said Mike Mendelsohn, SEIA’s senior director of project finance and capital markets. “This guide will serve as a valuable tool to both experienced investors looking to grow their businesses, as well as newer investors unsure of how to review the relevant risk factors.”
Mendelsohn added that the guide, which includes a risk management checklist, will not remain a static document. He said SEIA will update the document in real time as the industry grows and circumstances surrounding solar investing change. Ultimately, SEIA hopes the guide will streamline project development, open new sectors for solar deployment and open new sources of low-cost capital.
“From our experience serving multiple investors, we have a privileged vantage point to help our industry codify best practices and ensure healthy industry growth,” said Jason Kaminsky, COO of kWh Analytics. “We are pleased to have been invited by SEIA to co-author the industry guide that enables investors, large and small, to manage the unique risks posed by the solar asset class.”
For more information on solar financing, consider these stories:
Going out in a blaze: DOE announces clean energy financing & projects
Solar’s next top model: SEIA unveils standard commercial PPA contract
New investment vehicle could bring “patient capital” to wind and solar
JPMorgan Chase goes all in on renewable energy
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