How kWh Analytics is enhancing solar financing with its Solar Revenue Put

kWh Analytics

kWh Analytics is enhancing solar project financing via Solar Revenue Put, which has already enhanced over $250 million of solar assets , recently adding a portfolio of 4,000 projects totaling approximately 35 MW DC of capacity located in the Northeast U.S.

“The history of the solar industry is one of relentless innovation, and the Solar Revenue Put is moving the market by driving down the industry’s cost of capital,” said Ed Feo, President of Coronal Energy.

Using its proprietary actuarial model and risk management software (HelioStats), kWh Analytics developed the Solar Revenue Put, a credit enhancement for solar investors, to drive down investment risk and encourage development of clean, low-cost solar energy. Solar Revenue Puts are now set to guarantee production of more than 3 TWh of solar electricity, enough electricity to power every home in America for a day.

“We provide creative renewable energy solutions,” said Richard Dovere, CEO of C2 Energy Capital. “Implementing the Solar Revenue Put in our project financings is not only consistent with our mission, but also helps us to win deals. The Put is quickly becoming an industry standard.”

The Solar Revenue Put has emerged as a powerful tool that enables acquisitive solar investors to win more competitive bids by reducing their cost of capital. The Solar Revenue Put has been incorporated into a variety of project financings, ranging from thousands of residential rooftop power plants to centralized utility-scale solar farms. Both refinancing and “new build” financing have been supported by the Put.

According to a recent survey of the 50 most active solar lenders, more than 40% of these lenders are now underwriting the Solar Revenue Put as a credit enhancement. Project financings supported by the Put are securing approximately 10 percent more debt.

“Nomura worked with kWh Analytics on a new build solar farm to come up with a unique solution to meet the owner’s needs,” said Vinod Mukani, Managing Director at Nomura Securities. “The insurance allowed Nomura and the sponsor to create a floor on revenue reducing the risk of resource volatility, enhancing the investment value. The policy was put in place quickly and efficiently at an accretive price point.”

“Managing the cost of capital is a central challenge for every solar investor,” said Justin Fuller, SVP of Renewable Energy Finance at Celtic Bank. “We have successfully combined the strengths of the USDA loan guarantee with the Solar Revenue Put to create a best-in-class offering for project-level debt.”

“In the solar business, risk is cost,” said Richard Matsui, Founder and CEO of kWh Analytics. “With the Solar Revenue Put, industry-leading sponsors and banks are able to reduce the risk—and therefore the cost—of solar. Less risk, less cost, more solar.”

— Solar Builder magazine

Poll results show utilities losing ground to third-parties in consumer preference for new energy services

consumer preference

Customer demand for new energy technologies like electric vehicle (EV) charging and solar power has more than doubled since 2017. Utilities across the country, with an eye on creating new revenue streams, are increasingly launching EV charging and solar power offerings to meet this growing demand. While many consumers view utilities as natural providers for these offerings, utilities are quickly losing preferred provider status to non-utility third parties.

Overall customer preference for the utility as a solar power provider among interested customers has fallen from 68% last year to 47%. While preference for utilities as a provider of EV charging offerings remains flat, preference for third-party providers has increased by 66%. If preference for third-party providers continues to increase at this rate, they will overtake utilities in consumer preference in three years.

“Utilities are on the verge of one of the greatest marketing and revenue opportunities they have ever had,” said Chris Oberle, senior vice president at Market Strategies International-Morpace. “If they want to capture significant EV charging and solar power market share, utilities need to quickly build and defend their brands as trusted providers of new energy technologies.”

The energy industry research shows customers with low brand trust in their utility have a very high preference for third-party providers, while the utilities with the strongest preference tend to have higher Brand Trust scores as well as strong support for being “trusted energy advisers.”

Provider Preference by Offering Category and Brand Trust

(Brand Trust is measured on a scale of 1–1,000)

Solar power offerings – prefer utility

  • Low brand trust: 38 percent
  • High brand trust: 47 percent

Solar power offerings – prefer third party

  • Low brand trust: 29 percent
  • High brand trust: 7 percent

Solar power offerings – no preference

  • Low brand trust: 33 percent
  • High brand trust: 46 percent

EV charging – prefer utility

  • Low brand trust: 38 percent
  • High brand trust: 58 percent

EV charging – prefer third party

  • Low brand trust: 28 percent
  • High brand trust: 19 percent

EV charging – no preference

  • Low brand trust: 44 percent
  • High brand trust: 33 percent

Nationwide, 14% of utility customers say that they are likely to adopt rooftop solar, community solar, solar hot water or home battery storage within the next six months. While western states like California and Arizona are perceived to be the hottest solar markets, the greatest demand for solar offerings is actually in the South—stretching from Texas to Virginia. Similarly, customers in the South indicate the greatest interest in home or public EV charging offerings.

The study

These and other findings can be found in the Cogent Reports 2018 Utility Trusted Brand & Customer Engagement: Residential study by Market Strategies International-Morpace. The study measures the market dynamics of over 65 offerings and customer shopping behaviors of 18 customer segments.

Market Strategies-Morpace conducted surveys among 52,486 residential electric, natural gas and combination utility customers of the 130 largest US utility companies (based on residential customer counts). The sample design uses a combination of quotas and weighting based on US census data to ensure a demographically balanced sample of each evaluated utility’s customers based on age, gender, income, race and ethnicity. Utilities within the same region and of the same type (e.g., electric-only providers) are given equal weight in order to balance the influence of each utility’s customers on survey results. Market Strategies-Morpace will supply the exact wording of any survey question upon request.

— Solar Builder magazine

Department of Energy awards funds to large-scale DNV GL study of bifacial solar module performance

mission solar

Bifacial PV modules have the potential to increase energy output by 5-10 percent annually in many locations. To achieve commercial viability, the products need to demonstrate their bankability. Common testing models, have begun to incorporate bifacial models. However currently only little validation data for bifacial PV modules exists, which also often lacks third-party evaluation. This is why the U.S. Department of Energy (DoE) Solar Energy Technologies Office (SETO) is awarding DNV GL, the world’s largest resource of independent energy experts and certification body, $200,000 for a research study of bifacial PV technology. The project will validate energy models created for bifacial PV modules by commissioning a large-scale comparative energy yield analysis and creation of energy simulations in PVsyst software, based on the collected field data.

“This study represents the most comprehensive comparative energy yield analysis for bifacial PV modules to date,” said Richard S. Barnes, Executive Vice President, DNV GL – Energy, North America. “Because the solar industry is projected to grow rapidly, it is necessary to understand how new technologies, like bifacial PV modules, will perform.”

“The aim of the study is to accelerate commercial deployment of bifacial PV modules at scale,” said Tara Doyle, head of business development for DNV GL’s PV module testing lab. “If proven viable through extensive performance and reliability testing, bifacial PV modules have the potential to become the preferred technology for ground-mounted PV installations around the world.”

RELATED: Bifacial Gains: How much will bifacial modules add to solar tracker value? We are about to find out

Methodology

The project will entail collection of field data over the course of one year at DNV GL’s outdoor solar test facility in Davis, California. It will include bifacial and monofacial 1500 V PV modules provided by LONGi Solar, Astronergy Solar, Hanwha Q CELLS and Trina Solar, tested on single-axis trackers provided by solar tracking company NEXTracker, and two albedo ground types. Data acquisition will be highly granular, using actively calibrated equipment. The collected measurements will be used to generate PAN files and subsequent energy simulations in PVsyst.

The validation study was awarded as part of the U.S. Department of Energy’s allocation of $27.7 million for photovoltaics research and development, issued in conjunction with $25.1 million to projects that address other aspects of solar development. Along with other awarded projects that address bifacial PV technology, this study aims to accelerate the commercial adoption of reliable, high-performance PV systems by providing comprehensive field data, data analysis, and PVsyst models that will validate the relevant work that has been done to date.

“Energy modelling validation for bifacial PV modules and systems is needed to provide assurance to owners and financiers that PV systems using this technology will yield expected energy gains,” said Frank Faller, vice president, technology at 8Minutenergy, one of the largest utility scale developers in the U.S. “DNV GL Labs’ study is an important step toward addressing the lack of commercially representative, high-quality field data that’s required to validate contemporary energy models and thus accelerate the bankability of this technology.”

DNV GL was selected as a part of the Energy Department’s FY2018 SETO funding program, an effort to invest in new projects that will lower solar electricity costs and support a growing solar workforce. DNV GL is one of several photovoltaics research projects that will focus on improving the performance and reliability of PV cells, modules, and systems and reducing materials and processing costs.

— Solar Builder magazine

Canadian Solar ships 10 MW of its new bifacial solar modules to Neighborhood Power

Canadian Solar BiHiKu

Canadian Solar Inc. has delivered 10 MW of its bifacial PV modules, the BiKu CS3U-PB-AG that made its debut at Solar Power International in Anaheim this year, to Neighborhood Power for four solar power projects near Portland, Ore. This represents the first significant delivery of bifacial solar PV modules into the United States.

Bifacial solar modules can generate energy not only from the front side, but from the back side as well. With Canadian Solar’s Biku bifacial modules, the sunlight on the ground is reflected to the glass-covered back side of the module, producing extra solar energy in a solar system, significantly reducing the solar system’s levelized cost of electricity (LCOE), hence higher return on investment (ROI). Depending on the albedo (reflectivity) of the ground and other site conditions, daily energy yield for projects with bifacial modules can be 5-20% higher than with conventional polymer backsheet modules. This improved yield can dramatically enhance the economics of solar system deployments.

Canadian Solar is a leader in bifacial polycrystalline PERC (passivated emitter and rear contact) solar technology. By innovatively integrating bifacial and Ku (dual cell) technologies, the BiKu module can reach up to 370W on the front side, using poly PERC in a 144 cell format. Canadian Solar’s bifacial module comes with a 30mm frame for easy handling, saving significant installation costs.

RELATED: Bifacial Gains: How much will bifacial modules add to solar tracker value? We are about to find out

Neighborhood Power chose Canadian Solar bifacial modules because the additional energy gain is significant enough to compensate for the new tariffs on solar modules and steel mounting equipment, and the extra power gain made their solar projects economical again.

“When the solar industry was hit with tariffs on solar modules and steel, it seemed that rising landed costs had priced these projects out of the market,” said Stephen Gates, President, Neighborhood Power Corporation. “But with the additional power generated by Canadian Solar’s bifacial modules, delivered in the quantities and in the timeframe we needed, we were able to make the project economics work and bring these projects online by the end of 2018 as planned.”

Canadian Solar BiKu bifacial modules are warranted for 30 years, 5 years longer than the industry standard, and have a lower degradation rate, which results in 20% additional yield over the lifetime of the solar module. When added to the additional daily bifacial yield of 5-20%, Canadian Solar BiKu bifacial modules deliver up to 44% additional lifetime value compared to conventional modules.

“Canadian Solar foresaw early on that bifacial technology had the potential to be a game changer in the economics of large-scale solar and set out to be a leader in the development and deployment of bifacial solar modules. Our early deployment with Neighborhood Power in the U.S. is one proof point of our successful execution on that strategy,” said Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar. “All together, Canadian Solar has delivered and deployed over 200 MW of bifacial solar modules for customers and our own solar projects around the world. We pledge to continue innovating and delivering on the breakthrough products and services that will soon make solar PV the most cost-effective source of power generation everywhere.”

— Solar Builder magazine

Freedom Solar Financial raises $7.5M to launch new commercial solar financing vehicle

Freedom Solar

Texas-based Freedom Solar Financial Services LLC has raised an initial round of $7.5 million in funding to finance commercial solar projects. This financing through Freedom allows companies to finance up to 70 percent of the cost of an entire solar installation and ensures that an investment in solar is cash-flow positive from day one. The company offers a simple one-page application and a rapid one-week underwriting process.

The Freedom Financing program is based on more than a decade of experience working with hundreds of business owners to make solar work for them. Securing financing for commercial solar projects, which can be key to creating an attractive investment profile for onsite solar generation, can be difficult and complicated.

Check out the 2018 Solar Builder Projects of the Year!

“Finding a financial services product that works well for businesses is a challenge because the asset class and economic drivers of solar are unique,” says Bret Biggart, CEO of Freedom Solar. “Freedom understands solar and what our clients need. We are stepping in to make capital available for companies who want to go solar in a way that maximizes their return on investment.”

The executives at Freedom Solar Power created this new financial services entity in time to help owner-occupied businesses take full advantage of the Business Energy Investment Tax Credit (ITC) for solar power system installations. 2019 is the last year in which companies can claim a corporate tax credit worth 30 percent of the total cost of their solar power system installations. The tax credit steps down each year after that, to 26 percent in 2020, 22 percent in 2021, and 10 percent in 2022 and future years.

“With the deadline looming for the 30 percent tax credit, we are seeing greater interest from businesses who have been on the fence about solar for a while,” says Kyle Frazier, chief revenue officer at Freedom Solar. “Our waiting list for 2019 installations is already beginning to build, and people are realizing that the time to get started with solar is now.”

Since Freedom Solar was founded in 2007, the company has partnered with hundreds of business owners to design, install, and monitor complete solar solutions that lower their customers’ tax liability, reduce operating costs, and provide a strong return on investment.

— Solar Builder magazine