For the most part, the residential and utility segments of the solar market have figured out project financing. The small size of residential projects and the predictability of financing methods have led to more solar on rooftops. The massive scale of projects in the utility market, on the other hand, mean only a handful of financing houses can take part. For that reason, the path to utility-scale financing is complex yet familiar.
The commercial and industrial (C&I) segment of the industry, though, is a mashup of project size and property type, including schools, warehouses, stores, factories and landfills. The variety of project types and banks’ adversity to risk means every loan has been unique, subject to the peculiarities of each project and lending institution.
According to the founder of Open Energy, an online lender dedicated to providing loan capital to solar commercial developers, the complexity of each C&I loan is a problem that has been dampening the growth of such projects.
“The challenge for the commercial market is there is no simple process, the documentation is different, and the financing is less available,” said Graham Smith, cofounder and CEO of Open Energy.
Today at Solar Power International (SPI), Open Energy will launch a web portal that lets solar developers apply for loans online, in one place. The platform will streamline the application process in an intuitive and clean online interface. The company, which is based in the Financial District of New York City, aims to reduce transaction costs and increase access to solar loans for developers.
“It’s a bit like a credit card,” Smith said in a video interview available here. “When you apply for a credit card, you know what you’re getting. You don’t say to Capital One, I’m going to cross out these bits. It’s, ‘Here’s the deal.” And then there is a familiar process. You enter certain information. They review it, you sign the contract and then you’re done.”
“We’re trying to create an analog to that,” Smith said.
While the online platform will officially launch at SPI, Open Energy has been involved with C&I solar financing for two years, and the team have more than 20 years combined experience in Wall Street and solar financing. The company recently closed a loan with Vis Solis for $120,000, the latest in a string of loans for the Tennessee-based installer. In June, it loaned $380,000 to an operating portfolio of five projects, owned and managed by JJR Power, a solar energy development firm based in Minnesota.
“We’ve seen the constraints developers face firsthand, which is why we focused on developing this online loan application and online due diligence process,” Smith said. “Our borrower web platform streamlines the loan application process, decreasing the time and money spent on due diligence that may have previously prevented developers from accessing the solar loans to grow their businesses.”
To learn more about Open Energy, visit www.openenergygroup.com or e-mail email@example.com. The company will also be hosting its signature Beers with Solar Financiers event, to be held on September 15 at 4:30 p.m. PT at the Courtyard Anaheim.