Innovations in renewable energy finance have begun to address an additional obstacle to project development — linking project developers to potential investors.
Solar finance firm Sol Systems launched an online platform, SolMarket, on 31 August. SolMarket is designed to add a level of transparency to the solar financing market by easing communication between project developers and potential investors.
“The communication channels, the financing channels, the due diligence channels were all disrupted and fragmented,” Sol Systems CEO Yuri Horowitz told AOL Energy.
Participation in the platform appears to be growing. In the first two weeks of operations, SolMarket’s partnership funds — those that have agreed to use the platform for due diligence purposes — rose to $400 million from $350 million.
Much like a social networking site, each company and project has a searchable profile that it can make available to potential investors. This allows both sides to more efficiently identify partners or projects of interest.
“They’re not picking up the phone to call 50 developers or 50 investors,” Horowitz said. “That in and of itself is going to save the industry huge amounts of money.”
Resources for solar firms include standardized documents which, when developed by independent firms, can be costly and may not include the information that investors consider vital, as well as standardized analysis tools to evaluate a project’s performance under different financing scenarios or off-take prices.
The site also offers member discounts on solar modules, which may prove particularly valuable to “mid-tier” developers of projects in the 50kW-1MW size range.
“Group purchases are really focused on those small systems, providing them with pricing that they otherwise could not get,” Horowitz said. And they seek to offer the advantage of volume to SolMarket‘s partners on the manufacturing side.
“There’s a lot of room there to grow, but what’s really holding that market back are the transaction costs,” he said.