Securitization Library

The NREL Project Finance team's work focuses heavily on securitization as a means of facilitating solar finance. Securitizing the cash flows contracted through third-party leases and power purchase agreements offers the photovoltaics (PV) industry the potential to tap a broad range of investors at a potentially lower cost of capital than it can currently access in the debt and tax equity markets. A lower cost of capital could reduce energy prices, thus enabling PV to compete against conventional generation and utility rates.

This Securitization Library is intended as an educational resource for non-financial professionals and as a launch point for researchers and analysts investigating the means by which solar might access the capital markets. The materials listed are categorized under five general headings:

NREL Resources: Includes all of NREL's analyses, commentary, and other materials related to solar securitization

Background: A selection of introductory resources on the topics of securitization and structured finance

General: Encompasses a range of market insights, reports, and other materials covering solar securitization specifically

MLPs and REITs: A special section with documents focused exclusively on master limited partnerships (MLPs) and real estate investment trusts (REITs) and their potential for the solar asset class

Ratings Agency Commentary/Guidance: Publicly available documents describing the methodologies employed by ratings agencies to assess the risks in the solar asset class. Note: Each ratings agency requires the creation of a profile before accessing their materials; this process is free of charge.

NREL's Solar Securitization and Public Capital Finance page also contains information on the Solar Access to Public Capital (SAPC) working group, residential and commercial standard power purchase agreement contacts, and presentations made by SAPC members.  

NREL Resources

Technical Reports

Lowder, T.; Mendelsohn, M. (2013). The Potential of Securitization in Solar PV Finance. TP-6A20-60230. Golden, CO: National Renewable Energy Laboratory.

Feldman, D.; Settle, E. (November 2013). Master Limited Partnerships and Real Estate Investment Trusts: Opportunities and Potential Complications for Renewable Energy. TP-6A20-60413. Golden, CO: National Renewable Energy Laboratory.

Feldman, D.; Mendelsohn, M.; Coughlin, J. (June 2012). The Technical Qualifications for Treating Photovoltaic Assets as Real Property by Real Estate Investment Trusts (REITs). TP-6A20-55396. Golden, CO: National Renewable Energy Laboratory.

Mendelsohn, M.; Feldman, D. (April 2013). Financing U.S. Renewable Energy Projects Through Public Capital Vehicles: Qualitative and Quantitative Benefits. TP-6A20-58315. Golden, CO: National Renewable Energy Laboratory; 38 pp.

Mendelsohn, M. (October 2013). Renewable Energy Finance, Solar Securitization: A Status Report (Fact Sheet).  FS-6A20-60553.  Golden, CO: National Renewable Energy Laboratory; 2 pp. 

Schwabe, P.; Mendelsohn, M.; Mormann, F.; Arent, D. (June 2012). Mobilizing Public Markets to Finance Renewable Energy Projects: Insights from Expert Stakeholders. TP-6A20-55021. Golden, CO: National Renewable Energy Laboratory.

Market Insight Analyses

Mendelsohn, M. (November 2012). "How Do We Lower Solar Installation Costs and Open the Market to Securitized Portfolios: Standardize and Harmonize." NREL, Renewable Energy Project Finance.

Mendelsohn, M. (April 2012). "Will Solar Projects Need Tax Equity in the Future? Yes, but Baby Steps Toward Securitization Improve the Situation." NREL, Renewable Energy Project Finance.

Mendelsohn, M. (February 2012). "Tapping the Capital Markets: Are REITs Another Tool in Our Toolbox?" NREL, Renewable Energy Project Finance.

Mendelsohn, M. (November 2011). "Securitization: A Dirty Word, or a New Opportunity for Renewable Energy?" NREL, Renewable Energy Project Finance.

Wiedmeyer, J. (August 2013). "These Solar REIT Pioneers are Mining the Sun for "Good Income"  NREL, Renewable Energy Project Finance.

Background

Adelson, M.; Whetten, M.; Hoyt, B. (November 2008). "Securitization Glossary." New York, NY: Nomura Fixed Income Research.

Gangwani, S. (July 1998). "Securitization 101." New York, NY: Deloitte & Touche.

Giddy, I. (2001). "The Securitization Process." New York, NY: New York University.

Giddy, I. (2000). "Asset-Backed Securities: Managing the Credit Risks." New York, NY: New York University

Giddy, I. (2000). "Asset Securitization in Asia." New York, NY: New York University.

Giddy, I. (1999). "Asset Securitization: Cost-Benefit Analysis." New York, NY: New York University.

Jobst, A. (September 2008). "What is Securitization?" Washington, DC: International Monetary Fund.

Kohler, K. (1998). "Collateralized Loan Obligations: A Powerful New Portfolio Management Tool for Banks." Los Angeles, CA: Mayer, Brown & Platt.

Kotecha, M. (December 1991). "The Role of Insurance in Asset-Backed Securities." New York, NY: Capital Markets Assurance Corporation.

Leixner, T. (2007). "Securitization of Financial Assets." Ft. Lauderdale, FL: Holland & Knight LLP.

Lin, A. (2000).  "A Securitization Primer, Parts 1-4".  Toronto, ON: ScotiaBank.  

Yan, A. (January 2013). "Introduction to Asset-Backed and Mortgage-Backed Securities." Investopedia. Accessed on August 12, 2013: http://www.investopedia.com/articles/bonds/12/introduction-asset-backed-securities.asp

General

Clean Energy and Bond Finance Initiative. (2013). "Clean Energy Bond Finance Model: Industrial Development Bonds (IDBs)." Montpelier, VT: Clean Energy and Bond Finance Initiative.

Clean Energy and Bond Finance Initiative. (2013). Clean Energy Bond Finance Model: Morris Model." Montpelier, VT: Clean Energy and Bond Finance Initiative.

Damerow, F.; Kidney, S.; Clenaghan, S. (May 2012). "How Covered Bond Markets Can Be Adapted for Renewable Energy Finance and How This Could Catalyse Innovation in Low-Carbon Capital Markets." London, UK: Climate Bonds Initiative.

D'Olier-Lees, T.; Dubreuil, E.; Petkov, M.; Albulescu, H. (September 2012). "U.S. Infrastructure Project Financing Looks to the Capital Markets as Bank Lending Shrinks." New York, NY: Standard & Poor's RatingsDirect.

Frisari, G.; Hervé-Mignucci, M.; Micale, V.; Mazza, F. (January 2013). "Risk Gaps: A Map of Risk Mitigation Instruments for Clean Investments." San Francisco, CA: Climate Policy Initiative.

Frisari, G.; Hervé-Mignucci, M.; Micale, V.; Mazza, F. (January 2013). "Risk Gaps: Executive Summary." San Francisco, CA: Climate Policy Initiative.

Frisari, G.; Hervé-Mignucci, M.; Micale, V.; Mazza, F. (January 2013). "Risk Gaps: First-Loss Protection Mechanisms." San Francisco, CA: Climate Policy Initiative.

Frisari, G.; Hervé-Mignucci, M.; Micale, V.; Mazza, F. (January 2013). "Risk Gaps: Policy Risk Instruments." San Francisco, CA: Climate Policy Initiative.

Joshi, J.; Scott, C.; Griffin, A.; McDermitt, M.; King, T.; Davis, T. (May 2012). "Renewable Energy ABS Sector Review." Presented at the 2012 American Securitization Forum Conference. Accessed August 12, 2013: http://www.americansecuritization.com/uploadedFiles/Renewable_Energy_ABS_Sector_Review_1_25_11AM_PB3_v3.pdf

Joshi, J. (January 2011). "Securitization's Renewable Opportunity." New York, NY: American Securitization Forum.

Kim, J. (December 2012). "U.S. Structured Credit Roundtable: Renewable Energy Financing Opportutnities are Poised to Expand As Solar Becomes More Viable." New York, NY: Standard & Poor's RatingsDirect.

Kogan, K. (December 2012). "Post-1603 Solar Finance Options: Can REITs Successfully Be Deployed?" Washington, DC: Chadbourne & Parke.

Linder, S.; Di Capua, M. (June 2012). "Re-Imagining U.S. Solar Financing." New York, NY: Bloomberg New Energy Finance.

Martin, K. (February 2013). "Cost of Capital: 2013 Outlook." Washington, DC: Chadbourne & Parke.

Milford, L.; Sanders, R.; Rittner, T. (August 2012). "An Action Plan to Access the Capital Markets." Clean Energy and Bond Finance Initiative.

Mull, R. (September 2013).  "The Encyclopedia of Solar Securitization, Part 1".  GreenTechMedia.  Accessed on September 26, 2013:  https://www.greentechmedia.com/articles/read/The-Encyclopedia-of-Solar-Securitization-Part-1

Mull, R. (September 2013).  "The Encyclopedia of Solar Securitization, Part 2".  GreenTechMedia.  Accessed on September 26, 2013:  https://www.greentechmedia.com/articles/read/The-Encyclopedia-of-Solar-Securitization-Part-2

Nelson, D.; Pierpont, B. (March 2013). "The Challenge of Institutional Investment in Renewable Energy." San Francisco, CA: Climate Policy Initiative.

Wilkins, M.; Bariletti, M.; Burnett, R. (January 2013). "Out of the Shadows: The Rise of Alternative Financing in Infrastructure." London, UK: Standard & Poor's RatingsDirect.

Wilkins, M.; Beyzh, M. (October 2010). "Can Capital Markets Bridge the Climate Change Financing Gap?"  London, UK: Standard & Poor's RatingsDirect.

MLPs and REITs

Coons, C. (April 2013). "Master Limited Partnerships Parity Act." Washington, DC: U.S. Senate.

Kogan, K. (February 2013). "REITs and Solar: The Future is Already Here." Washington, DC: Chadbourne & Parke.

Kogan, K. (November 2012). "Using REITs to Finance Solar Power Development." Waterbury, CT: Mortgageorb.com

Milder, F. "Master Limited Partnerships: How's the Fit with Renewable Tax Credits?" Portland, OR: Novogradac Journal of Tax Credits.

Sherlock, M.; Keightley, M. (June 2011). "Master Limited Partnerships: A Policy Option for the Renewable Energy Industry." Washington, DC: Congressional Research Service.

Ratings Agency Commentary/Guidance

(Note: Several of these sources require the creation of a free login on the ratings agency page.)

Deluz, C. (December 2010). "Rating Methodology: Generic Project Finance Methodology." New York, NY: Moody's Investor Service.

Donner, R.; Berckmann, C.; Sabatelle, A.J. (December 2012). "Rating Methodolgoy: Power Generation Projects." New York, NY: Moody's Investor Service.

Giudici, A.; Nocera, A.; Costello, G.; Ford, B. (October 2012). "Evaluating Credit Risks in Solar Securitizations." New York, NY: Kroll Bond Ratings.

Giudici, A.; Kim, J.; Yagoda, B. (January 2012). "Will Securitization Help Fuel the U.S. Solar Power Industry?" New York, NY: Standard & Poor's RatingsDirect.

Manzi, R.; Abrams, N.; Coleman, M.; Moskowitz, D.; Vernier, M.; Zerarka, S. (October 2006). "Legal Criteria for U.S. Structured Finance Transactions: Criteria Related to Asset-Backed Securities." New York, NY: Standard & Poor's.

Manzi, R.; Abrams, N.; Coleman, M.; Moskowitz, D.; Vernier, M.; Zerarka, S. (October 2006). "Legal Criteria for U.S. Structured Finance Transactions: Criteria Related to New Asset-Backed Securities." New York, NY: Standard & Poor's.

Venkataraman, S.; Samson, S.; Polakovic, L. "Project Finance: Key Credit Factors: Methodology And Assumptions on Risks For Utility-Scale Solar Photovoltaic Projects." New York, NY: Standard & Poor's.