The Solar Access to Public Capital (SAPC) working group has developed a customizable contract template that can be used for residential lease contracts and for commercial power purchase agreements.
"These template contracts should allow national and regional solar developers alike to increase business opportunities and enable the creation of tradable investment vehicles desired by pension funds and other institutional investors critical to scale the industry," says Paul Schwabe, an energy analyst with National Renewable Energy Lab (NREL).
Standardization of these asset origination documents can enable more efficient pooling of cash flows, as well as more effective valuation from credit rating agencies and investors, says NREL.
Assembled by the Department of Energy's National Renewable Energy Lab, the working group includes solar developers, law firms, financiers and solar analysts. The three-year effort is funded under DOE's Sunshot Initiative.
Solar leasing firms are working together in the group: SolarCity, SunRun, Clean Power Finance, OneRoof, and Sungevity.
Launched in October 2012, the group has grown to more than 120 member organizations. It's engaged in several other initiatives also designed to build investor confidence:
- Collaborating with rating agencies to evaluate "mock" portfolios of residential and commercial assets
- Developing best practice guidelines for system installation, operation and maintenance
- Partnering with SunSpec to develop the "O-SPaRC" database, which hosts real-time performance data on thousands of solar systems installed in the US.
It will also give the private market the tools to develop investment vehicles such as asset-backed securities, master limited partnerships, real estate investment trusts, and various debt products.
"The O-SPaRC dataset will provide the market with critical data on the long-term performance of residential and commercial solar facilities," says Michael Mendelsohn, Senior Financial Analyst for NREL. "This is an important step to tapping the public capital markets and offers the potential to significantly lower the cost of solar energy."
Another project along these lines is the truSolarTM Working Group, which is developing a credit rating for solar projects.
Here are the contract templates: