Using Arrays as Assets

In the solar industry, we know that a solar system is a great asset - the equipment is valuable, under a long warranty, and if necessary, can be removed from the rooftop. On top of that, value from the generated power can be realized through either savings or direct resale. Obviously an asset, right? So why are most solar loans dependent on credit ratings, real estate value, personal assets? Why aren’t there more lenders offering secured solar loans that recognize the project itself as an important piece of collateral?

In short, data. The most common examples of asset-backed loans are home mortgages and car loans. In both of these examples, traditional lenders have access to huge amounts of data which allow them to determine exactly how much value they would be able to recover in the event of default. Unfortunately, this presents a bit of a chicken and egg problem for the solar industry: in order to gather sufficient amounts of data on the recoverable value of a defaulted system, a significant number of project-backed solar loan defaults need to occur, which means that significant number of project-backed solar loans need to be both issued and monitored. At Wunder, we strongly believe in the viability of project-backed financing, and we plan to prove it one solar loan at a time. Learn more about our loan products and collateralization method on the financing page. Or email us at financing@wundercapital.com.

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