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Falling interest rates are creating an opportunity for many renewables developers to squeeze more money out of operating assets.
Most solar entrepreneurs look at an installation and see green.
Experts say that should be even more true in the current financial climate. Because of favorable interest rates, sinking solar system prices and the sector’s increasingly de-risked reputation among investors, many developers are noticing they can squeeze even more money from already-operating projects.
Refinancing, a humble financial transaction that’s caught the eye of many solar developers, could allow companies to pull more money from a project and shuttle it elsewhere.
Renegotiating a loan or credit agreement now can mean a better interest rate while increasing the amount of debt funding on a project, freeing up a developer’s own cash.
“There’s this $2 billion opportunity sitting right under the industry’s nose,” said Richard Matsui, founder and CEO at kWh Analytics, a solar data and finance company that’s helped several clients refinance.
“That’s the challenge and the opportunity for the industry. You’ve got all this trapped cash in these solar farms, and refinancing is a way to take advantage.”