By Frank Andorka, Senior Correspondent
Commercial solar is the most challenging segment of the solar industry in which to find low-cost financing. Open Energy, a commercial financing provider, is trying to fix that problem by creating the first lending exchange for commercial scale solar developers and installers.
Called The Open Energy Finance Exchange, it allows more than 60 lenders to compete to fund a project, driving down costs and improving terms for project developers. The exchange reportedly will provide access to $5 billion in capital.
The key to the exchange is the loan quote tool, which helps project developers get financing estimates, which provides them a better idea of how much money might be available to them with a PPA-based project or a direct-owned system and can plan accordingly. The quote is the first step for developers to access the Open Energy Finance Exchange and applies to power purchase agreement-based and direct owned projects from 50 kW to 50 MW.
According to the company, there are already more than $75 million worth of deals active on the exchange, with $35 million already matched successfully. By the end of the year, Open Energy targets $250 million of solar financing matched between lenders and developers.
Open Energy CEO Graham Smith said:
We want to take the search for finance off the developer’s plate and bring the market to them. The commercial solar market continues to have an immense potential but numerous obstacles, such as the time taken to source financing and a lack of financing choices, has hindered its growth. Over the last few years, we have worked hard to expand commercial solar financing and now we are taking the next step in growing the market with the Finance Exchange. With direct access to significantly more financing, we believe we can help the market truly take off.
Thanks to more difficult risk profiles and market fragmentation, the commercial market is still struggling to find its financing footing. The innovation of the Open Energy Finance Exchange is a welcome addition to the segment.