Residential solar installer Palmetto closes $420 million asset backed securitization

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Residential solar, battery energy storage and heat pump provider Palmetto announced it has closed its second major asset-backed securitization of 2025.

The $420 million transaction is backed by a pool of 22,188 residential solar power purchase agreements (PPAs) and leases.

The transaction adds to Palmetto’s issuance closed in April this year of $286 million, bringing total ABS issuances to more than $716 million.

The solar installer uses solar asset-backed securitizations (ABS) to raise capital and fund its business operations. The company obtains capital from private funds by selling tax equity and uses bundled residential solar systems as collateral for loans.

“By successfully closing this transaction, we’re proving that residential solar remains an attractive and resilient asset class,” said Derek Heckendorn, chief capital and business development officer, Palmetto. “Access to institutional capital is critical to scaling clean energy adoption and accelerating the transition to a more resilient home energy system.”

The securitization was structured by Bank of America Securities. Active joint book runners included Bank of America Securities, Deutsche Bank Securities, Morgan Stanley, and RBC Capital Market, with Citigroup and HSBC serving as passive joint book runners.

“We’re seeing accelerating adoption between the interplay of rooftop solar, battery storage, EV charging, and intelligent load management, all working together to maximize savings and efficiency. The assets included in our second ABS transaction demonstrate this shift, supporting time-of-use and grid-services programs that directly benefit and reward consumers,” said Chris Kemper, founder and chief executive officer, Palmetto.

Early in 2025, Palmetto announced it secured $1.2 billion in investments to support its LightReach business, a residential solar lease and power purchase agreement platform. Investors included Morgan Stanley, Truist Bank and other prominent financial institutions.

Under the LightReach program, a third party owns the asset. Homeowners can install rooftop solar and energy storage systems for $0 upfront and predictable monthly payments. Palmetto said its LightReach customers see savings on utility rates within the first year, with no interest, dealer fees, or lifetime maintenance costs.

Despite ongoing struggles in the residential solar industry in 2025, major providers are accessing capital and driving ahead, while innovators are finding ways to cut residential solar soft costs to remain cost-competitive in the face of expiring solar tax credits.

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