How Big Investors Make Money in U.S. C&I Solar

This article first appeared on the BNEF mobile app and the Bloomberg Terminal.

  • Blackstone has stakes in three solar and storage firms
  • Strict credit rules limit the attractive deals available

Asset managers like Blackrock, Blackstone, Brookfield, Credit Suisse and Morgan Stanley are active in the U.S. commercial and industrial (C&I) solar market. Investors like the diversification of project types and locations in portfolios of commercial solar, but a lack of contract standardization and strict credit requirements makes closing deals harder.

Institutional money has found many ways to get involved in U.S. C&I solar. Some investors, like Blackstone and Blackrock, acquire or invest directly in mid-sized developers. Others like to participate in financing vehicles by providing debt, long-term equity or tax equity, a form of capital used to monetize U.S. federal tax credits for solar.

Cheap capital for C&I solar comes with strict credit requirements, and most projects that secure debt sell solar power to investment-grade entities. These conditions limit the market size, because the vast majority of U.S. businesses are non-investment-grade.

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