Leaders in Energy and Finance Seek to Develop Credit Score for Solar Projects
WASHINGTON, DC -- (April 16, 2013) The U.S. Department of Energy's (DOE) National Renewable Energy Laboratory (NREL), and DOE's Sandia National Laboratories (Sandia) extend their support for the truSolar® Working Group's efforts to develop uniform open source risk scoring standards and rating criteria for solar projects that will facilitate lower transaction and capital costs, and improve project finance liquidity within the commercial and industrial solar segment.
"truSolar represents a valuable opportunity to create a common approach to characterizing solar project benefits and risks and more precise alignment on pricing of project capital," says NREL Senior Financial Analyst Michael Mendelsohn. "This initiative could potentially lower transaction costs, and improve access to financial capital critical to solar project deployment." Adds Roger Hill, principal member of technical staff at Sandia, "We will be examining the risks inherent in projects to sharpen our analytical tools for criteria and assessment in technical areas including yield and reliability."
The truSolar® Working Group was established on January 14th as a collaborative consortium of 16 solar industry market leaders dedicated to addressing a broad array of project risks through the development of uniform standards. The founding members of truSolar®, led by Distributed Sun and DuPont Photovoltaic Solutions, are among the leaders in solar project asset management, development, financing, manufacturing, insurance and ratings agencies. Founding member companies include ABB, Assurant, Inc., Mosaic, PanelClaw, SMA America, Standard & Poor's, Booz Allen Hamilton, and the Rocky Mountain Institute.
"On behalf of our founding members, we are pleased to welcome the National Labs to our initiative," said Chase Weir, chief executive officer - Distributed Sun. "We are excited about the opportunity to work closely with the National Labs, and the SAPC initiative currently led by NREL, to develop comprehensive, complementary solutions for the solar industry, by the industry."
truSolar® is an industry-driven standard for project selection, underwriting and approval. It involves an underwriting process that rigorously tests and identifies higher yield, lower risk solar investment opportunities. The system works to reduce project failure before, during and after construction, and increases the bankability of the industry's solar pipeline. truSolar® is designed to mitigate events of default and business interruption from power off-takers with unrated – less than investment grade – credit. By scoring project performance, site profile and counterparty risk criteria with sophisticated rating tools, truSolar® provides a framework to lower capital costs and support trade credit insurance for power-purchase-agreement revenues.
The truSolar® Working Group is dedicated to developing the truSolar® credit screen to provide a comprehensive assessment of risks – including project, system, construction, performance and financing– from development to long-term operation, serving as an industry-driven, open-source standard credit screen for PV project selection, underwriting and approval, through which a wide range of business methods, analysis tools, and related products and services can be applied. The Group represents nearly $100B in global annual revenues, more than 600 years of institutional experience, and the industry's best-practice, applied business knowledge throughout the value-chain.
"This work is a natural complement to our efforts with the Department of Energy and the national laboratories in finance innovation," says Greg Rosen, chief investment officer of Mosaic. "truSolar® is vital to the industry because it will make the solar financing process flow more quickly, smoothly and cheaply."
NREL is the U.S. Department of Energy's primary national laboratory for renewable energy and energy efficiency research and development. NREL is operated for DOE by The Alliance for Sustainable Energy, LLC.
Sandia National Laboratories is a multi-program laboratory managed and operated by Sandia Corporation, a wholly owned subsidiary of Lockheed Martin Corporation, for the U.S. Department of Energy's National Nuclear Security Administration
The truSolar® Working is a consortium of leading solar market participants which exists to establish uniform credit screens standards for commercial and industrial PV projects and, in turn, enhance liquidity of the industry. Led by Distributed Sun and DuPont Photovoltaic Solutions, founding members include solar industry leaders ABB, Assurant, Inc., Mosaic, PanelClaw, SMA Solar Technology AG, Standard & Poor's, Booz Allen Hamilton, and the Rocky Mountain Institute with support from the U.S. National Labs NREL and Sandia.