Solar Debt Financing on Pace to Reach Highest Since 2010

Oct. 7 (Bloomberg) — Global debt financing to solar
companies is on pace this year to reach the highest level since
2010, with almost half going to developers and installers,
according to Mercom Capital Group LLC.

Solar companies borrowed about $18.4 billion through the
third quarter, almost triple the $6.2 billion last year and $6.8
billion in 2012, Raj Prabhu, chief executive officer of Austin,
Texas-based Mercom, said in an interview today.

About 43 percent went to companies building power plants,
both large-scale solar farms and smaller, rooftop systems. A few
years ago, manufacturers received almost all the debt financing,
Prabhu said. Lenders grew nervous as new solar technologies
didn’t pan out and began scaling back debt offerings.

“Banks and financial institutions are comfortable again,
in terms of lending,” he said. “All of this is helping the
momentum of the solar industry right now.”

Debt financing for solar was $36 billion in 2010 and $20
billion in 2011, driven in part by loans and credit lines
extended by the Chinese government to local manufacturers. In
2010, 92 percent, almost $33 billion, of global debt offerings
for solar was in China. That financing boom helped trigger a
worldwide glut of panels that depressed prices and led to a
trade dispute with the U.S.

As much as 52 gigawatts of solar installations are expected
this year, and 61 gigawatts in 2015, compared with 40 gigawatts
last year, according to Bloomberg New Energy Finance. Demand in
China is expected to account for about a quarter of the total.

To contact the reporter on this story:
Justin Doom in New York at
jdoom1@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Will Wade

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