Solar companies, already benefiting from booming share prices, are turning to increasingly innovative ways to raise capital, including bond issues, bank loans and even crowd-funding.
SolarCity—Wall Street's newest renewable energy darling—last week announced that it will offer debt investments backed by pools of solar assets this year. Last year, SolarCity, which is backed by Tesla Motors founder Elon Musk, issued about $54.4 million in the first-ever solar bonds. They secured an investment-grade rating from Standard & Poor's.
Observers say SolarCity's fortunes are the latest signs of a maturation process that could hasten the day when renewable energy is less dependent on government subsidies. It also comes as demand for solar power is expected to see what research firm NPD calls "explosive growth," with demand expected to surge more than 36 percent in 2014.
"As we're seeing costs and price point for solar systems fall, we're seeing concomitant increase in deal structures and investment vehicles available to individual investors and utilities," said Nadav Enbar, senior project manager in power delivery utilization at the Electric Power Research Institute. "As a result of this maturity, investors consider renewable energy/solar as a potential area with less risk for their dollars."