US financial institutes may securitize solar PV system projects. Solar firms believe securitization of solar PV projects could help firms obtain funds easier, which would benefit the industry.
Solar firms added that the commercialization of solar PV systems directly relates to the availability of investment funds. Once projects can be securitized, solar firms can easily obtain financial capital and effectively expand the US solar market.
In fact, solar PV system securities can adopt the concept of real estate investment trusts (REITs) and be rated by credit rating agencies. These securities can be sold to the international market.
Nevertheless, some solar firms have been conservative about securitizing solar PV system projects in the US as the country does not provide the same type of incentives as in Europe. The US government uses tax breaks to promote solar PV installations and federal tax breaks differ from state-level breaks. This means it is hard to effectively calculate the internal rate of return (IRR) for projects, which is crucial for investors when evaluating the securities.
