C&I Solar Sector Could See Huge Growth in Next Few Years

Investments in commercial and industrial (C&I) solar energy projects (50kW-2MW) by U.S. corporations are poised to soar, according to a new market research report commissioned by Santa Barbara-based Wiser Capital. More than 60 percent of managers with influence over corporate investments intend to put company capital to work by investing in solar energy in the U.S., according to a survey conducted by OnePoll for Wiser Capital’s “2015 Solar Investment Index. “

One-third of corporate managers surveyed said their companies would make their first solar energy investments within the next year. This doesn’t appear to be a “flash in the pan” investment phenomenon either: No less than 83 percent of the 100 small to mid-size company managers surveyed said their commercial organizations will make investing in the solar energy sector a priority by 2020.

Aside from contributing to national and international initiatives addressing climate change and environmental resources degradation, the potential to earn comparatively high, stable and longer term returns on investment (ROI) is a primary motivating factor for U.S. corporate investors, Wiser Capital highlights in a press release.

“We have known the demand for mid-scale solar investment was growing in the U.S and it’s clear the boom has in fact already begun,” Wiser Capital executive director Nathan Homan stated. “We are certain that investment in solar for commercial businesses will soon be a mainstream venture because investors have new tools and resources at their disposal streamlining and clarifying the process.”

Commercial Solar: High Returns, High Profile Investments

More than 6 in 10 (63 percent) of U.S. businesses surveyed for Wiser Capital’s “2015 Solar Investment Index” expect investing in solar energy will generate high ROIs.

Solar energy investments by high-profile, market leaders such as Google, Apple and Tesla are creating a sense of urgency and forcing U.S. corporations to take a serious look at the solar market, Wiser Capital points out. This being the case, the prospect of solar energy investing becoming genuinely mainstream is not far off.

Commercial solar investments can range from investing in the shares of individual solar energy companies, exchange-traded and/or index funds and “yieldcos” (yield companies) to investing in solar energy projects directly, Wiser Capital’s directors of strategic affairs Megan Birney elaborated in an interview.

Overcoming Obstacles To Solar Energy Investing

Wiser Capital’s latest Solar Investment Index also points out perceived obstacles to investing in solar energy. Lack of standardization and unclear investment policies among corporate investors surveyed has held back nearly half (46 percent) of them from making investments.

An inability to accurately and comprehensively assess the various risks of making solar energy investments prevented more than 4 in 10 (43 percent) from committing capital. Nearly one-third (31 percent) held back because they found it difficult to evaluate the viability of individual investments in solar energy.

Wiser Capital also identified what would overcome corporate investor hesitations about the solar industry.  Seven of 10 survey participants (69 percent) said they would be more likely to invest in solar this year if there was an easier, standardized means of risk assessment. More than half (54 percent) said they would be likely to make solar investments this year if there was an easier way to find solar energy project partners.

For its part, Wiser Capital developed an information systems platform that automates the process of evaluating and carrying out solar energy investments. Key features of the tool include investment-grade financial modeling, a risk rating system, and a Wiser Solar Asset Rating (WSAR) Score. “We are an investment firm. Our software helps us understand the market, and it standardizes and streamlines the investment risk assessment and overall investment process,” Birney said.

Lead image: Soaring markets. Credit Shutterstock.

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