In early November, the solar industry reached an important milestone. SolarCity, the largest vertically integrated residential solar installer in the country, was successful in selling a portfolio of solar leases into the secondary market as a unique asset class. This new solar security represents an unprecedented opportunity to lower the cost of capital and bring solar into reach for millions of homeowners.
Securitization provides a pathway to large-scale capital markets and significantly lower interest rates. This is expected to bring down the cost of solar PV to consumers, giving solar companies access to virtually limitless funds — as long as these assets continue to perform.
At the Institute for Building Technology and Safety (IBTS), we believe this critical step forward will help drive the solar marketplace well beyond its current scale. However, securitization does not come without risk. We believe that as the industry continues to mature, so must the underlying systems that protect consumers and investors alike.