News Release NR-1914

May 7, 2014

Increasingly, banks, credit unions, and other lenders are beginning to offer loan products to homeowners and businesses for the installation of rooftop solar systems. However, barriers to accessing this growing market still remain. The Energy Department’s (DOE) National Renewable Energy Laboratory (NREL) recently convened the Banking on Solar working group to engage lenders and other stakeholders to address these barriers.

Banking on Solar comprises more than 50 members representing the solar, banking, legal, regulatory, and financial industries, among others. The group’s principal efforts center on standardizing contracts and underwriting processes, as well as educating banks and regulators about the risks and rewards of the solar asset class. The goal is to reduce barriers to entry for banks that wish to diversify their asset base and invest in a market with high growth potential.

“There are many states where third-party finance is unavailable and there are solar customers who may prefer to own their systems over leasing them,” said NREL Analyst Travis Lowder. “A greater prevalence and diversity of loan products could enable higher rates of solar adoption in these markets.”

The working group has already begun developing standardized loan documents and underwriting criteria in the residential and commercial markets. Other solar debt markets, such as lending into tax equity capital structures, are also under consideration.

The Banking on Solar working group is operating in parallel with the SunShot Initiative-funded, NREL-led Solar Access to Public Capital (SAPC) working group. SAPC is designed to facilitate capital market investment via securitization.

“The two initiatives are complementary, as securitization offers banks an opportunity to free up their balance sheets and expand their loan activities,” Lowder said. “The knowledge gained from quantifying solar risks under the SAPC mock ratings process is highly relevant to solar lenders.”

The effort is supported by the Department of Energy’s Office of Energy Efficiency and Renewable Energy through the SunShot Initiative. Banking on Solar will host several webinars in the months ahead to introduce banks to the solar asset class. The group will also have a presence at several upcoming banking conferences around the United States. For more information on this group and its activities, please send an email to travis.lowder@nrel.gov.

Banking on Solar participants include: Admirals Bank AFC First Financial Corporation American Bankers Association Bank of America Merrill Lynch Blank Rome LLP Bloc Power Bridge Bank Callahan & Associates Capital City Bank Capital Fusion Partners Citi City University of New York Clean Fund CleanPath Clean Power Finance The Climate Bonds Initiative Coalition for Green Capital Community Development Financial Institutions Fund Congressional Bank Connecticut Clean Energy Finance and Investment Authority Digital Federal Credit Union DLA Piper Energi Energy Programs Consortium Energy Sense Finance Enphase Environmental Defense Fund Greater Cincinnati Energy Alliance Harcourt Brown & Carey HelioPower Independent Community Bankers of America Kilowatt Financial K&L Gates LLP Latham & Watkins LLP Lawrence Berkeley National Laboratory LendKey Technologies M-Core Credit Corporation McHenry Savings Bank MJM Consulting Mosaic National Cooperative Bank Nautilus Solar New York Green Bank New York State Energy Research and Development Authority NextEra Energy OneRoof Energy Patton Boggs PNC R&R Consulting Rabobank Renovate America Inc. Rocky Mountain Institute Sandia National Labs Self Help Credit Union Skadden, Arps, Slate, Meagher, & Flom LLP SolarCity Solar Energy Industries Association Sungage Financial SunPower U.S. Bancorp VectraBank Wiser Capital Zions Energy Link

NREL is the U.S. Department of Energy's primary national laboratory for renewable energy and energy efficiency research and development. NREL is operated for the Energy Department by The Alliance for Sustainable Energy, LLC.

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