Yingli Solar Has Invested US$10 Million to Set up a Leasing Company

China-based large-size solar firm Yingli Solar has invested US$10 million to set up a leasing company for the solar project financing business, according to China media. Due to a lack of demand and the credit crunch, financial institutions in the US have been reluctant to provide funds for solar projects. Hence, solar firms have been eager to set up leasing offices to help customers finance for their solar projects. This also helps the firm to be one step closer to the end market demand. This type of leasing firm allows investors and users to obtain financial capital easily because the requirements are less strict compared with other financial institutes. However, interest rates are relatively higher than financial institutes such as banks because the main revenue incomes of leasing firms are the higher interest rates. There are currently around 10 solar firms that have set up solar project leasing firms in the US market. This also show the potential of the solar market in the US. The solar system segment of the supply chain needs to be operated by finance professionals. This is very different from the other segments. In addition, the firms that have been entering the solar system business need to understand the local ways of financing. Having the leasing firm will help Yingli to have a strong distribution channel in the US. Source: www.digitimes.com