Background[edit | edit source]

The growth rate of the solar industry (amongst other renewables) needs to be accelerated in order to meet the energy demands and Kyoto protocol targets required for the world. Government incentives for renewables in several countries, such as Europe, U.S.A. and Canada, will help increase the demand for these technologies. However, the market for residential applications, such as residential rooftop grid-tied solar photovoltaics (PV), cannot grow at the required rates without the appropriate accessibility to financing. There needs to be a new way of thinking with regards to energy generating technologies. Even in residential application, electricity is sent back (sold) to the grid, making these applications able to reduce residential electrical consumption, reduce the demands on the grid, and generate revenue for the homeowner. This is even more relevant in Ontario in 2009, where the Green Energy Act proposes contracts with the Ontario Power Authority (OPA) that guarantee income for every home that produces electricity for 20 years once it has a functioning renewable energy generating device, such as PVs. Banks need to see these contracts as assets and provide financing based on the strength of the contract, the forecasted cashflows, and the proven track record of the technology. Start-ups (e.g. SunRun in the U.S. that understand the technology have begun financing these endeavours, realising the potential for investment opportuniy and the high rate of return that comes with investing in PV panels.

Kadra09 20:20, 4 June 2009 (UTC)

Topical Journals and Resources[edit | edit source]

Literature Review[edit | edit source]

Searches[edit | edit source]

  • Green mortgages/ green banking, green loans
  • Banking for renewables/solar
  • Discount rate, benefit cost analysis, waterfall payments, escrow account
  • Insurance and PV solar panels
  • project finance and solar

RETScreen[edit | edit source]

See RETScreen info at Solar photovoltaic software

RETScreen is a decision support tool provided by Natural Resources Canada (NRCan). This is free software that can be used all over the world to evaluate energy production, emissions reductions, financial viability and risk involved for various types of renewable energy technologies (RETs).

RETScreen utilises a five step standard project analysis:

  1. Energy Model of RET
  2. Cost Analysis of RET
  3. Greenhouse Gas (GHG) Analysis
  4. Financial Analysis (Based on project life time and cash flows)
  5. Sensitivity & Risk Analysis

Kadra09 20:28, 4 June 2009 (UTC)

Banks and Investment[edit | edit source]

Financial Terms[edit | edit source]

A Primer for Benefit-Cost Analysis[1]


"Escrow is a way of transferring or exchanging property and/or money using a neutral third party."Wisegeek

An account established to hold funds until a given transaction is complete. Wiki

Discount Rate

The discount rate is an interest rate a central bank charges depository institutions that borrow reserves from it. Wiki

The term discount rate has two meanings:

  1. the same as interest rate; the term "discount" does not refer to the meaning of the word, but to the purpose of using the quantity, such as computations of present value, e.g. net present value or discounted cash flow
  2. the annual effective discount rate, which is the annual interest divided by the capital including that interest; this rate is lower than the interest rate; it corresponds to using the value after a year as the nominal value, and seeing the initial value as the nominal value minus a discount; it is used for Treasury Bills and similar financial instruments[2]

Selecting the Discount Rate[3]

Waterfall Model

Used by banks and finance for commercial projects under asset and liability management.,[4][5]

Waterfall Payment[6]

Green Energy Initiatives[edit | edit source]

Green Energy Act[edit | edit source]

Green Energy Act Executive Summary

FIT Program Review

Ontario Power House, Zero Interest Loans[edit | edit source]

To qualify for a PowerHouse zero-interest loan* or rebate you must:

1. Be a customer of Enersource Hydro Mississauga, Hydro One Networks or Hydro One Brampton Networks
2. Install the system in a home in Brampton, Mississauga, Caledon, or parts of York Region (King Township, East Gwillimbury, Georgina or Whitchurch- Stouffville)
3. Purchase an eligible renewable technology
4. Have it installed by February 15, 2009
5. Submit a PowerHouse loan or rebate application through your utility

Banking for Solar[edit | edit source]

In Europe, bank loans for PV are common place. [ref]

Kadra09 00:50, 5 June 2009 (UTC)

Our Power,Economics of Solar,2009[edit | edit source]

The current incentive framework in Ontario has now made a solar investment competitive with the best long-term vehicles available on the market!The economic piece that is definitely material but difficult to price is the fact that a PV system will still produce 80% of its rated power in its 21st year, once the 20 year FIT contract expires.

Green Mortgages[edit | edit source]

Several Green Mortgage Programs have recently been introduced in Canada. They all have incentives for improving the energy efficiency of residential properties, contingent on the mortgage on the property and approval. The current focus is on reducing utility demand though using Energy Star Appliances and other energy improvements. The Mortgage Group Ontario Inc. has noted the following:

TD Canada Trust[edit | edit source]

TD Canada Trust

  1. Green Mortgage
  2. Green Home Equity Line of Credit (HELOC)

Limited Time Cash Rebate Offer (February 26, 2009 and September 30, 2009)– Rebate up to 1.5% of the amount of the (green) mortgage or the fixed rate portion of the HELOC when you make ENERGY STAR® qualified purchases.

RBC[edit | edit source]

RBC RBC Energy Saver™ Loan

  • Receive 1% off the interest rate for your fixed rate instalment loan over $5,000


  • Receive a $100 rebate on a home energy audit on a fixed rate instalment loan over $5,000

RBC Energy Saver Mortgage

  • Receive a $300 rebate on a home energy audit
  • Available if you are refinancing your existing mortgage, purchasing a home and/or making improvements to resale properties
  • Choose either a residential mortgage or an RBC Homeline Plan®
  • Your choice of a fixed rate mortgage, 3 years or greater, or a 5 year variable rate mortgage (closed terms)

RBC Mortgage Rates

Citizens Bank of Canada[edit | edit source]

Citizens BankOntario Green Mortgage Like a traditional Citizens Bank mortgage, with a complimentary Green Gift Package, complimentary Greensavers Home Energy Audit ($250 value) and $100 donation to Conservation Council of Ontario. LIne of credit available upon approval.

CIBC[edit | edit source]

CIBCEnviro-Saver Mortgage Limited to specific mortgage packages with a minimum mortgage principal amount of $10,000.

Includes a gift certificate for up to $300 for an ecoEnergy "D" Evaluation and a free copy of the Carbon Buster's Home Energy Handbook. Purchasers of CMHC Mortgage Insurance may be eligible for a 10% rebate on their premiums and no surcharge on 35-year amortization when the energy-efficient upgrades are completed.

KCCU[edit | edit source]


EcoSmart Car Loan Green Home Energy Line of Credit

Energy Star (US)[edit | edit source]

Energy Efficient Mortgage (EEM)

Other Grants for Energy Efficient Homes[edit | edit source]

Home Improvement Grants NRCAN

NRCAN Grant Table for ecoENERGY Retrofit

Kathryn Young,Canadian lenders going green with mortgages,CanWest News Service[edit | edit source]

" Citizens Bank of Canada mortgage included a $10,000 line of credit at prime for energy-efficient upgrades and a blue recycling bin filled with $875 worth of information and coupons, including a $375 home energy audit to help determine what improvements can be made to his 18-year-old Toronto-area home."

Green Financial Products & Services:Current State of Play and Future Opportunities, UNEP, October 2007[edit | edit source]

"Financial institutions are starting to see the top line, money-making reality of delivering sustainability to corporate and retail institutions are rushing to market with new or re-packaged product and service offerings from green auto insurance to innovative pro-eco mortgages and new sustainability-backing investment funds."

The benefits of these products include:Improved market share, increased profits, Customer acquisition and loyalty, Higher employee satisfaction and retention, Reputational benefits (improved brand image), Positive media attention, Environmental awareness and benefits,improved license to operate, Strengthened relationships and partnerships with external stakeholders.

Addressing Barriers to Solar PV incentive[edit | edit source]

Artur Skoczek, Tony Sample and Ewan D. Dunlop, The Results of Performance Measurements of Field-aged Crystalline Silicon Photovoltaic Modules, Progress in Photovoltaics: Research and Applications, Volume 17 Issue 4, 2009, Pages 227 - 240[edit | edit source]

Abstract This paper presents the results of electrical performance measurements of 204 crystalline silicon-wafer based photovoltaic modules following long-term continuous outdoor exposure. The modules comprise a set of 53 module types originating from 20 different producers, all of which were originally characterized at the European Solar Test Installation (ESTI), over the period 1982-1986. The modules represent diverse generations of PV technologies, different encapsulation and substrate materials. The modules electrical performance was determined according to the standards IEC 60891 and the IEC 60904 series, electrical insulation tests were performed according to the recent IEC 61215 edition 2. Many manufacturers currently give a double power warranty for their products, typically 90% of the initial maximum power after 10 years and 80% of the original maximum power after 25 years. Applying the same criteria (taking into account modules electrical performance only and assuming 2·5% measurement uncertainty of a testing lab) only 17·6% of modules failed (35 modules out of 204 tested). Remarkably even if we consider the initial warranty period i.e. 10% of Pmax after 10 years, more than 65·7% of modules exposed for 20 years exceed this criteria. The definition of life time is a difficult task as there does not yet appear to be a fixed catastrophic failure point in module ageing but more of a gradual degradation. Therefore, if a system continues to produce energy which satisfies the user need it has not yet reached its end of life. If we consider this level arbitrarily to be the 80% of initial power then all indications from the measurements and observations made in this paper are that the useful lifetime of solar modules is not limited to the commonly assumed 20 year. Copyright © 2008 John Wiley & Sons, Ltd.

Our Power,Insurance Letter, 2008[edit | edit source]

J. M. Pearce and Paul J. Harris, Reducing greenhouse gas emissions by inducing energy conservation and distributed generation from elimination of electric utility customer charges, Energy Policy, 35, pp. 6514-6525, 2007[edit | edit source]

ISSN 0301-4215, DOI: 10.1016/j.enpol.2007.08.029 ( open access

This paper addresses unavoidable customer charges in the electrical billing system as a barrier to electrical conservation and green house gas mitigation. This work is based on a survey done in the US. The customer charge is fixed and is independent of the actual electricity consumption used. In trying to maximize their benefit from the unavoidable fixed customer charge, smaller electricity users are inclined to conserve less. "To eliminate the customer charge nationally while maintaining a fixed sum for electric companies for a given amount of electricity", it is proposed that there be "an increase of 7.12% in the residential electrical rate. If enacted, this increase in the electric rate would result in a 6.4% reduction in overall electricity consumption, conserving 73 billion kWh, eliminating 44.3 million metric tons of carbon dioxide, and saving the entire US residential sector over $8 billion per year." The results above indicate that removing the fixed charges and increasing the electrical rate can be economical for the US, the electrical companies and the households and environmentally beneficial. The increased rate penalizes smaller users less and encourages smaller and larger users alike to conserve responsibly.

Other interesting points: Effect of the reduction in green house gases on:

  1. Return on investment (ROI) for energy efficiency projects
  2. Distributed generation economics
  3. Customer charge effects on type of energy choice

Does your insurance cover solar panels?[edit | edit source]

Some insurance companies cover solar panels. However, those that have been adverse towards it has been due to a lack of information and uncertainty about the technology.

Joshua M. Pearce, Photovoltaics - A Path to Sustainable Futures, Futures 34 (7), 663-674, 2002 open access[edit | edit source]

As both population and energy use per capita increase, modern society is approaching physical limits to its continued fossil fuel consumption. The immediate limits are set by the planet's ability to adapt to a changing atmospheric chemical composition, not the availability of resources. In order for a future society to be sustainable while operating at or above our current standard of living a shift away from carbon based energy sources must occur. An overview of the current state of active solar (photovoltaic, PV) energy technology is provided here to outline a partial solution for the environmental problems caused by accelerating global energy expenditure. The technical, social, and economic benefits and limitations of PV technologies to provide electricity in both off-grid and on-grid applications is critically analyzed in the context of this shift in energy sources. It is shown that PV electrical production is a technologically feasible, economically viable, environmentally benign, sustainable, and socially equitable solution to society's future energy requirements.

Related Papers/Sources[edit | edit source]

10 Solar Lending Programs in 10 Locations, 2009 (Solar Blog)[edit | edit source]

10 examples of city, state, and utility based solar lending programs

R. Frick, Green Energy RisingKiplinger's Personal Finance; Jun2009, Vol. 63 Issue 6, p23-28, 6p[edit | edit source]

The article considers the increase in renewable-energy stocks in the U.S. It cites the lack of capital, which was exacerbated by the financial crises, as a key factor in the slowdown of renewable-energy businesses. The benefits of the economic stimulus package of U.S. President Barack Obama to the renewable-energy industry are discussed.

Mike Brigham,GEAA FITs Presentation, May 2009[edit | edit source]

  1. FITs Intro, program objectives, notes and rules
  2. Application and approvals process, Part 1
  3. Application and approvals process, Part 2
  4. A brief break
  5. Notice To Proceed
  6. New Online Facilitation Tools
  7. Prices and tranches

Tom Cheyney,Wacker Chemie secures 400 million Euro loan from EIB for new polysilicon plant, May 2009[edit | edit source]

The European Investment Bank has approved a long-term €400 million loan to help finance Wacker Chemie's new Nünchritz (Saxony) polysilicon production facility. The company has budgeted investments totaling some €800 million for the plant, which will have a nominal annual capacity of 10,000 metric tons and will be commissioned in 2011. The facility is expected to create around 450 new jobs.

A. Focacci, Residential plants investment appraisal subsequent to the new supporting photovoltaic economic mechanism in Italy, Renewable and Sustainable Energy Reviews, In Press, Corrected Proof, Available online 7 May 2009[edit | edit source]

ISSN 1364-0321, DOI: 10.1016/j.rser.2009.04.002.[2]

Abstract:Solar energy is a fascinating promise for the future of world economies considering both the progressive depletion of natural fossil fuels and the environmental impact of their massive utilisation in energy conversion systems.

After an outlook of more evident techno-economic, environmental and social issues related to photovoltaic (PV) sector, the paper proposes a financial appraisal of a real case concerning a private residential PV building-integrated plant in order to highlight its economic feasibility according to last supporting mechanism introduced by recent Italian legislation.

Munich Re, Marsh and Signet Solar cooperate on a new type of insurance solution,May 2009[edit | edit source]

Munich Re, industrial insurance broker Marsh and photovoltaic producer Signet Solar have jointly launched a new insurance solution to cover the possible risk of a performance deterioration in photovoltaic modules. This unique insurance solution, which is being implemented for Munich Re by one of its primary insurers, covers the performance warranty of Signet Solar modules for a period of 25 years. The warranty guarantees that the modules will perform to at least 90 per cent capacity in the first ten years and to at least 80 per cent in the remaining 15 years.

Tania Urmee, David Harries,A survey of solar PV program implementers in Asia and the Pacific regions, Energy for Sustainable Development, Volume 13, Issue 1, March 2009, Pages 24-32[edit | edit source]

Factors seen as instrumental in limiting program success were lack of adequate government policy and funding support, lack of involvement of local communities in program design, and a lack of in-house technical know-how, and a lack of availability of components in locations proximate to users.

"The types of financing mechanisms used in the programs included micro-credits schemes, interest rate buy-downs and fee-for service mechanism which includes subsidies... The interest rate buy-down approach is a mechanism not previously used in programs in this Region and involves providing subsidies to partner financial institutions which are then able to offer loans to customers at discounted interest rates..."

Jason Coughlin and Karlynn Cory,Solar Photovoltaic Financing: Residential Sector Deployment, NREL Technical Report, March 2009[edit | edit source]

An analysis examined the importance of various incentives, and the need for financing to support residential solar PV at three specific locations: 1) Sacramento, California, 2) Boulder, Colorado, and 3) Newark, New Jersey.

Traditionally, homeowners have financed these systems with cash, home equity loans, or refinanced mortgage loans. However, since 2007, a number of new financing mechanisms have been introduced to the market place to address the high up-front costs of installing a PV system on a residential rooftop. Solar leases, residential power purchase agreements, property-tax assessment models, and renewable energy credit-based loans are now available. However, most of these new models are offered within a very limited geographic region, where local financial incentives make the economics of residential PV most attractive.

New York Energy $mart(SM) Loan Program In addition to cash incentives, NYSERDA also offers an interest rate buy-down program to homeowners and both programs can be used simultaneously (NYSERDA 2007). In the buy-down program, the homeowner enters into an agreement to borrow money from a participating lender. NYSERDA will make a one-time payment to the lender to bring down the borrower's interest rate by up to 4%.13 For example, if a bank is willing to lend money to a homeowner for a PV system at a rate of 8%, the interest rate will be reduced to 4% after the NYSERDA buy-down. Loans are capped at $20,00014 13 The buy-down can be up to 6% of the total interest rate for ConEdison customers. 14 $30,000 for ConEdison customers. with a maximum term of 10 years.

Lee Greenberg, Canwest News Service, Tuesday, February 24, 2009, Ontario Pushes Green Regime[edit | edit source]

Selling home? Energy audit a must

About three-quarters of Ontario's energy supply comes from nuclear, coal and gas-fired generating facilities across the province. Wind, by contrast, contributed only.01 per cent to the mix.

Many environmentalists were pleased by the legislation. "I think this is the right thing to do at the right time," said Rick Smith, executive director of Environmental Defence. A spokesman for Greenpeace, however, said unless the government backs off its commitment to nuclear, the province will never achieve a green future.

HareonSolar[edit | edit source]

Banks in Germany are still loaning money for the construction of small installations and high-quality large PV systems

Both of Germany's largest banks – Commerzbank and Deutsche Bank AG – are still active in the PV business. Like other German banks, they take advantage of government funds: for instance, the German Development Bank (KfW) currently has subsidized loans for renewable energy projects worth up to €10 million ($14 million). That amount will soon increase to €50 million ($70.2 million), announced German Minister of the Environment Sigmar Gabriel in December. These loans carry an effective interest rate of between 3.62 and 7.44 percent (as of Jan. 22, 2009) – depending on the credit rating of the borrower and the period of the loan. An interest rate of 5 percent is a realistic average. According to the KfW's loan guidelines, the loans are only applicable to projects inside Germany or abroad if German companies are behind the project. Hence, it appears that German project planners will have a distinct advantage over foreign competitors in the near future.

M. Mazur,For Bankers, Green Isn't Just About Money.,Community Banker; Jul2008, Vol. 17 Issue 7, p60-60, 1p[edit | edit source]

Abstract:A majority of bank executives said that green initiatives are important to their financial institutions, according to a recent survey. Many companies have come to see the value of going green, and banks are no exception. The core mission of New Resource Bank, a de novo based in San Francisco, is to help environmentally friendly businesses, as well as to offer solar home equity financing -- a loan with incentives for homeowners to add solar power systems. Energy efficiency is not just a concern for bankers. A vast majority polled said being green is also important to their customers. Nonetheless, close to 60% of the bank executives said that less than one fourth of their customers actually use these green-saving programs.

Adams, John. "Green initiatives: TD Bank's ATM Network Reduces Carbon Footprint: Purchasing renewable energy to run ATMs." US Banker 118.8 (August 2008): 10. [3][edit | edit source]

Abstract :When customers use one of Toronto Dominion (TD) Bank's 2,600 ATMs across Canada, they'll also be making an investment of sorts in that country's use of renewable energy. The bank has entered into a partnership with Bullfrog Power to purchase an amount of renewable energy that's equal to the energy used by the bank's Canadian ATMs in a year -- or about 6,500 kilowatt hours. TD Bank, which is examining the possibility of making similar arrangements in the US, is purchasing "green" power that's about 20% more expensive than nonrenewable energy but much less costly than deploying an entirely new network of green ATMs outfitted with solar panels or some other source of localized renewable power.

J.Alario,J. Cervino, European Investment Bank (EIB),Innovative financing models of solar projects: the European experience from EIB perspective, 2008[edit | edit source]

Background on Solar, Policies to support solar technologies in the EU, EIB financing of solar projects,including solar equipment.

EIB Financing Definition of "Project Finance": It is the financing that allows that a given investment project, with a given credible and sustainable cash flow forecast, together with the quality of its own assets, may be financed individually, without full recourse to the promoters and with a high financial leverage.

Martin LaMonica, Here come the solar tech financiers,2008[edit | edit source]

The founding idea behind Clean Power Finance, SolarCity, Sun Run, and other solar financing upstarts is that purchasing solar panels should be like deciding on a car lease.

In addition to financing, Clean Power Finance has written what is essentially a version of tailored for solar installers.The hosted application keeps a database of state tax incentives, the electrical production information of panels, and utilities' electricity rates. Using it, installers can generate an accurate proposal that includes financing options.

Jay Lehr, Farming for fuel, Texas Banking,(2008, March) 97(3), 10-11. Retrieved June 15, 2009, from ABI/INFORM Global database.[edit | edit source]

Abstract:Solar and wind energy can never fill more than a tiny niche of energy requirements. Solar and wind power require people to sacrifice hundreds of square miles of land to equal each conventional power plant. Biofuels, including ethanol and biodiesel, are the new darlings of the renewable energy movement. However, the author recognizes one additional resource that will play a major role in the development of biofuel. That resource is the human brain, which in all of its resourcefulness has changed the entire agricultural landscape through the advent of biotechnology. Today, however, in an environment of fear-driven, escalating oil prices and with dramatic improvements in chemical engineering, both fuels have a fighting chance of becoming economic success stories if put on a level playing field of competition. Eventually, biotechnological research will enable people to create a plant that will rival sugar cane in conversion efficiency. From a banking perspective the ethanol market is in an interesting holding pattern.

Banks should look at market that will develop for ethanol and its investment opportunities.

Bryan Walsh, Solar Power Hits Home,U.S. TIME Magazine, August 2008[edit | edit source]

"That stiff up-front cost has always been the biggest barrier to residential use of solar power. An average set of rooftop panels costs $20,000 to $30,000 and takes 10 to 15 years to produce enough electricity to pay for itself.."...."and now solar companies and banks are helping homeowners stretch the cost over the lifetime of the panels,..."

"..[a homeowner] managed to work out green financing with the help of solar company SunPower. After determining that his electricity bills and roof exposure were large enough to make him a good candidate for its solar panels, the company, based in San Jose, Calif., helped him find a 15-year loan for the $64,500 system..."

EEG – THE RENEWABLE ENERGY SOURCES ACT 2007[edit | edit source]

'Germany made its decision at the end of the last millennium to take this course and today it is one of the leading industrial nations in the renewable energy sources sector. The guarantor for this success is the Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz, EEG), which came into effect on 1 April 2000. The EEG introduced a fundamental change in energy supply: every citizen can now become an energy producer. The grid system operators are committed to accepting this electricity, and to paying fixed fees for it.'

'The economic outcome of the EEG is outstanding! In 2006, 12.0% of total German electricity consumption was supplied from renewable energy sources and, as a result, there was a reduction of over 100 million tonnes in CO2 emissions. This sector employs more than 230,000 people and adds up to an overall turnover of around 23 billion euros. Electricity production in accordance with the EEG reduces the wholesale price for electricity by 5.0 billion euros, and also reduces by 3.4 billion euros the subsequent costs for the climate which arise from fossil energy sources. For this reason the advantages of EEG electricity clearly exceed the additional costs of initial investment - by 3.2 billion euros.'

'The EEG had already achieved its own goal - 12.5% of energy from renewable sources by 2010 - in mid-2007.'

N.C.Scott,European practices with grid connection,reinforcement, constraint and charging of renewable energy projects,Xero Energy, 01 August 2007[edit | edit source]

This report examines the EU directives relating to RE and the grid, general European practices with transmission grid connection and Use of System charging, and particularly focuses on comparing GB with RE development leaders Denmark, Germany and Spain.Peripheral areas and offshore projects have also been examined with a particular focus on Greece. This executive summary is a bullet list of headlines coming out of this work. Under each theme some comment is given on the reference countries, the EU and Europe1 followed by GB.

German Solar PV for Free Says Walter Fischer, 2007[edit | edit source]

There are two elements critical to making his statement possible.

  • The German electricity feed law that pays homeowners and businesses for their solar electricity, and
  • The German low interest loan program that makes it possible for anyone to install solar.

Green Businesses: Building Value Over The Long Term.,Business Credit; Jun2006, Vol. 108 Issue 6, p28-35, 8p[edit | edit source]

Abstract: The article presents information on green businesses with reference to its long term value in the United States. A green business can create better relationship with the community through its transparent activities and the careful management of its environmental, social and financial performance. In this industry the products and services are sustainable with a credibility to the product, labeling to its effect that can create differentiation in the marketplace. A green business runs on renewable energy and the products and services can be identified with a conservation economy. INSET: Green Hospitals.

Nuclear Loan Guarantee's Outlook Cloudy. (2006, November). Power Finance & Risk,1. Retrieved June 15, 2009, from ABI/INFORM Global database.[edit | edit source]

A drawn-out process for extending some $2 billion loan guarantees for alternative generation projects such solar and ethanol has developers worried that a similar process specifically aimed at nuclear generation will be equally as protracted. Companies are waiting for a government taskforce to release guidelines on the incentives--meant to cover 80% of the debt financing of new nuclear plants--before ascertaining how far nuclear construction projects are bankable.

UNEP (2006)Indian Solar Loan Programme, Energy Branch: United Nations Environment Programme.Paris February 15 2007[edit | edit source]

The aim of this effort is to help Canara bank and Syndicate bank develop lending portfolios specifically targeted at financing solar home systems (SHS)

Paul D. Maycock, PV review:: World Solar PV market continues explosive growth,Refocus, Volume 6, Issue 5, September-October 2005, Pages 18-22[edit | edit source]

World photovoltaic cell and module production increased in 2004 to 1195 MW representing a massive 57% increase on 2003 (716MW). Japan lead the way again with Japanese PV cell and module production increasing by 65% to 602 MW in 2004. European production increased by 49% to 314 MW whilst in the United States production increased 35% to 139 MW. Elsewhere the balance of world production increased 67% to 140 MW (Table 1).


"incollaboration with Sumitomo Trust and Banking Co.,Sekisui Chemical Co. jointly developed a new housing loan, which helps homebuyers to purchase a house equipped with high-capacity PV systems. The company explains that "the higher the power generating capacity of photovoltaic generator, the lower the loan's interest rate. Going as low as 2.8%, this compares favorably with long-term fixed-rate bank loans, further enchanting the economic appeal of our products""....

Sunderasan Srinivasan, Solar home systems: Offering credit and ensuring recovery, Refocus, Volume 6, Issue 1, January-February 2005, Pages 38-41, ISSN 1471-0846, DOI: 10.1016/S1471-0846(05)00293-3.[edit | edit source]

Abstract: Numerous studies have concluded that provision of credit would contribute to widespread deployment of SHS among populations otherwise deprived of the access to modern electricity services. Paradoxically, offering credit also represents a significant source of risk to the creditors, given the nature of the product and the specifics of the market. Pre-payment systems could offer a way out of this impasse and programme designers could do well to pay greater attention to the development, testing and deployment of such systems. Sunderasan Srinivasan, Solar Energy Society of India reports.

Rob McMonagle, A PV Roof Program for Canada,An issues report by CanSIA, January 31, 2005, V1.2[edit | edit source]

A critical number of these early adopters are needed before the market expands into the general population.Such pioneers can be the government, on a national, provincial or local level, educational institution such as universities, colleges and schools, and importantly - individual homeowners. It is the role of government to encourage these market leaders and to create a popular demand for solar.

The major obstacle for PV today is the high upfront cost for the investor. Not everyone is aware that not only are you buying the PV equipment but also free solar electricity for the next 30 to 50 years.

J. P. Painuly, Financial Mechanism for PV Solar Home Systems Market Development; Indian Case Study, UNEP 2005[edit | edit source]

Structuring the loan product and banking partners.

Another link:[4]

Solar Thermal and Photovoltaic Collector Manufacturing Activities, 2004[edit | edit source]

Internationally, the United States photovoltaics markets have benefited from new government–sponsored programs, such as favorable tax credits and loan subsidies including favorable loan repayment schedules in Germany and Japan in past years. However, since 2000 U.S. exports to Japan have dropped sharply, because Japan's domestic production is expanding rapidly.7 In developing countries like Indonesia and Brazil, the World Bank has made low interest energy loans with long term pay-back schedules for the installation of residential applications for PVs. The United States also has implemented a "Million Solar Roofs Initiative" program as well as various loan programs. In addition, an increasing number of utilities have sponsored programs such as net metering, portfolio standards, and green pricing. In general, a growing group of industries and residential sector customers appears willing to pay for PV-based installations. The commercial sector, the third largest sector in peak kilowatts shipped, increased by 31 percent its use of PV cells and modules in 2002.

Evan Mills,The insurance and risk management industries: new players in the delivery of energy-efficient and renewable energy products and services,Energy Policy, Volume 31, Issue 12, September 2003, Pages 1257-1272[edit | edit source]

Abstract:The insurance and risk management industries are typically considered to have little interest in energy issues, other than those associated with large energy supply systems. The historical involvement of these industries in the development and deployment of familiar loss-prevention technologies such as automobile air bags, fire prevention/suppression systems, and anti-theft devices, evidences a tradition of mediating and facilitating the use of technology to improve safety and otherwise reduce the likelihood of losses. Through an examination of the connection between risk management and energy technology, we have identified nearly 80 examples of energy-efficient and renewable energy technologies that offer loss-prevention benefits (such as improved fire safety). This article presents the business case for insurer involvement in the sustainable energy sector and documents early case studies of insurer efforts along these lines. We have mapped these opportunities onto the appropriate market segments (life, health, property, liability, business interruption, etc.). We review steps taken by 53 forward-looking insurers and reinsurers, 5 brokers, 7 insurance organizations, and 13 non-insurance organizations. We group the approaches into the categories of: information, education, and demonstration; financial incentives; specialized policies and insurance products; direct investment; customer services and inspections; codes, standards, and policies; research and development; in-house energy management; and an emerging concept informally known as "carbon insurance". While most companies have made only a modest effort to position themselves in the "green" marketplace, a few have comprehensive environmental programs that include energy efficiency and renewable energy activities.[5]

Ilyse Hogue,The cost of living richly.Multinational Monitor 2002;23:9-14. Available from: ABI/INFORM Global.[edit | edit source]

Abstract:The world's forests, which act as giant reservoirs of carbon, are an integral part of the planet's climate system, both a massive carbon source and one of the planet's best natural lines of defense against climate destabilization. Forest destruction releases vast amounts of carbon into the air, while at the same time eliminating the planet's ability to absorb carbon. "Forest protection is a key strategy for confronting global warming," says Mike Brune, campaigns director at Rainforest Action Network. Forests are key to maintaining local ecosystems and supporting indigenous communities. "Old growth forests are home to over 50 percent of the planet's plant and animal species and three-quarters of the world's traditional indigenous peoples," Brune notes.

Another concern raised by environmentalists is Citigroup's failure to capitalize on environmentally beneficial lending and investment opportunities. "Solar panels and small wind turbines have the potential to be the cheapest form of energy for millions of Americans across the country," explains Phil Radford, executive director of PowerShift, a group working to promote renewable energy technologies. "Citibank has neglected to take advantage of the $4 billion U.S. market in solar loans. This bank is missing the opportunity to help stop global warming by phasing out fossil fuel investments and promoting clean energy now. The irony is that if Citi financed solar for people's homes, solar energy could be made immediately affordable for millions of Americans today."

"As long as Citi is bankrolling rainforest destruction, global warming and the displacement of indigenous peoples," says Vanessa Pierce, a student leader at Iowa's Grinnell College. "Students will join together to say `Not with my money' to the world's most destructive bank. We will continue to ask the tough questions of Citi, like `Who is living richly, and at who's expense?'"

E. Martinot, A. Cabraal, S. Mathur,World Bank/GEF solar home system projects: experiences and lessons learned 1993-2000, Renewable and Sustainable Energy Reviews, Volume 5, Issue 1, March 2001, Pages 39-57, ISSN 1364-0321, DOI: 10.1016/S1364-0321(00)00007-1.[edit | edit source]

Abstract:Twelve projects provide energy services to off-grid rural households in developing countries by enhancing markets for solar home systems and by removing barriers to their dissemination. Project approaches are reviewed, along with early implementation experience and lessons suggested by experience. Most projects incorporate the following features: pilot private-sector and NGO delivery models; pilot consumer credit delivery mechanisms; pay first-cost subsidies and offer affordable system sizes; support policy development and capacity; develop codes and standards and establish certification, testing, and enforcement institutions; and conduct consumer awareness and marketing programs. Most projects are just beginning implementation; a few are almost completed. Lessons from early experience suggest that: solar home system delivery firms face a myriad of difficulties operating in rural areas; credit risk is a serious concern of both financiers and dealers and makes credit sales particularly challenging; technical performance of systems is becoming well-proven; customers desire a range of component options and service levels and can benefit from even small systems; projects must recognize the link between rural electric-grid extension and solar home system demand; and marketing campaigns can be extremely costly and time consuming in rural areas. Challenges are to demonstrate sustainable and replicable business models, develop regulatory models for energy-service concessions, and integrate rural electrification policy with solar home system delivery.

Life-Cycle Analysis and Optimisation of Solar Home Systems[edit | edit source]

Setting up microfinance and loans.

Damian Miller, Chris Hope, Learning to lend for off-grid solar power: policy lessons from World Bank loans to India, Indonesia, and Sri Lanka, Energy Policy, Volume 28, Issue 2, February 2000, Pages 87-105[edit | edit source]

Abstract: The World Bank has sought to advance the diffusion of solar photovoltaic (PV) technology for off-grid applications in the developing world. As these systems are fundamentally different to centralised power stations and conventional rural electrification, the World Bank has been learning how best to lend for such technology. This study seeks to highlight the lessons learnt from the World Bank's first loans for off-grid PV to India, Indonesia, and Sri Lanka. It uses lifetime cost analysis to justify continued intervention in this sector, and it draws on theories of innovation diffusion to guide analysis and ultimately policy recommendations. Because of the special role of entrepreneurial start up companies in the rural PV sector, the paper also uses a company cash flow model to demonstrate the efficacy of various supply-side policies. Finally, the study concludes with a checklist of policy lessons and a consideration of the role of the International Finance Corporation in this sector.

Michael T. Eckhart, Financing Solar Energy in the U.S., Scoping paper, 1999, pp 1-50[edit | edit source]

Summary: The financing of solar energy, representing one of the final phases of the process of commercializing solar energy technologies, needs to be addressed as carefully as the previous stages of research, development, demonstration, and commercial utilization.

Because as much as 95% of all solar energy installations will require some form of financing upon purchase, public and corporate policy makers can usefully view the commercialization challenge from the perspective of the lender. In considering whether to lend money for solar technology, financial institutions will assess the likelihood of being repaid, first from the borrower's cash flow and good character (the so-called "ability and willingness" to pay), second, from the solar system's collateral value, and finally, from third-party guarantees. Policies and programs must address those factors to have an impact on market-based lending decisions.

Another urgent issue faces public policy makers. Confusion over technical quality, utility interconnection, safety, economic viability, and insurability actually precludes lenders from making financial determinations. In addition to their impact on potential individual users and solar businesses, these factors harm the broader public interest. The nation's return on its billion-dollar investment in solar panel technology has been delayed by twenty-five years of deliberations over, among other issues, the development and adoption of standards by which users can connect solar systems to the U.S. utility grid.

" A third way of reducing monthly payments is to apply lower-cost, longer-term financing. Here, the 7-year, 18% loan is replaced with a 20-year, 5% loan."

"Renewable Energy Development Institute (REDI),which provides assistance and information on off-grid mortgages and solar loans."

"The lending industry uses standardized guidelines to make loan decisions. Economic and appraisal guidelines must be modified to accommodate solar systems."

SolarBank Program SolarBank International is being planned as a global capital fund for the financing of the end-use markets for solar energy. When established, it will have affiliated SolarBank funds in each of the countries where there is a substantial market for Solar PV. Sources of capital will be 50% from SolarBank International and 50% from in-country investors, lenders, and institutions.Additional information:

Asif Ud Dowla,Micro Leasing: The Grameen Bank Experience, 1998[edit | edit source]

"In 1992 Grameen Bank started its experimental leasing program by leasing power looms to weavers in the Ariahazar area of Dhaka Zone. The objective of this paper is to critically examine the leasing program. Since the program is relatively new the exercise will entail a preliminary evaluation of the program. Instead of a full-fledged impact assessment study, we will examine the terms and condition of the leasing program, evaluate its success in terms of outreach, repayment rate and asset ownership."

Ryan Wiser and Steven Pickle, Financing Investments in Renewable Energy: The Role of Policy Design and Restructuring, Environmental Energy Technologies Division,University of California,March 1997[edit | edit source]

The costs of electric power projects utilizing renewable energy technologies are highly sensitive to financing terms. Consequently, as the electricity industry is restructured and new renewables policies are created, it is important for policymakers to consider the impacts of renewables policy design on project financing. This report describes the power plant financing process and provides insights to policymakers on the important nexus between renewables policy design and finance. A cash-flow model is used to estimate the impact of various financing variables on renewable energy costs. Past and current renewable energy policies are then evaluated to demonstrate the influence of policy design on the financing process and on financing costs. The possible impacts of electricity restructuring on power plant financing are discussed and key design issues are identified for three specific renewable energy programs being considered in the restructuring process: (1) surcharge-funded policies; (2) renewables portfolio standards; and (3) green marketing programs. Finally, several policies that are intended to directly reduce financing costs and barriers are analyzed. The authors find that one of the key reasons that renewables policies are not more effective is that project development and financing processes are frequently ignored or misunderstood when designing and implementing renewable energy incentives. A policy that is carefully designed can reduce renewable energy costs dramatically by providing revenue certainty that will, in turn, reduce financing risk premiums.

Danziger, Robert Nathan Whittier L. Rev. 13 (1978-1979)Solar Energy Financing: Variable Loan Payments in an Energy Savings-Paid Loan Program[edit | edit source]

Solar Insure Inc.,Risk Management[edit | edit source]

Solar Insure is a full service commercial insurance brokerage firm with a passion for renewable energy specifically wind and solar energies. Our customers range from large solar manufacturers & suppliers to smaller solar/wind contractors.

Munich Re, industrial insurance broker Marsh and photovoltaic producer Signet Solar have jointly launched a new insurance solution to cover the possible risk of a performance deterioration in photovoltaic modules. This unique insurance solution, which is being implemented for Munich Re by one of its primary insurers, covers the performance warranty of Signet Solar modules for a period of 25 years. The warranty guarantees that the modules will perform to at least 90 per cent capacity in the first ten years and to at least 80 per cent in the remaining 15 years.

S. Vaseghi, G. Schwetje,J. Gentilozzi,Business Plan: How to Win Your Investors' Confidence,Springer Berlin Heidelberg 2007 pp1-177[edit | edit source]


loan programs

KfW Renewable Energy Programme Low Interest Loan[edit | edit source]

The KfW Renewable Energies Programme offers you definite advantages:

  • Long-term, low-interest financing for investments in renewable energies.(The maximum loan term is usually up to 20 years with no more than three redemption-free grace years.)
  • A reliable basis for calculation since the interest rate is fixed for 10 years.
  • The interest rate is below the capital market level.
  • In addition to the low-interest loan, a repayment bonus financed from federal funds is provided.
  • Financing for up to 100% of the eligible investment costs.
  • Cumulation and combination with other public funds is possible.
  • Flexibility through the possibility of prepayment of outstanding loan amounts at any time and at no extra charge.

The application channel of an investment loan foresees the presentation of the application from the investor to the bank, which – after the project assessment and the evaluation of risks and security – transfers the application to KfW on the specific forms. If the project is suitable for the promotional programme, a loan agreement is established and funding is made available to the investor through the bank.

Citation List[edit | edit source]

Natural Resources Canada, Grant Table for ecoENERGY Retrofit, Effective March 30, 2009,

  1. Richard O. Zerbe Jr. and Allen S. Bellas, A Primer for Benefit-Cost Analysis, Edward Elgar Publishing Inc., 2006
  3. Christopher Bruce, Selecting the Discount Rate, Economica 1996,
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Created May 6, 2009 by Kadra Branker
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