US household photovoltaic financial enterprises will raise US $7.8 billion in 2022

US household photovoltaic financial enterprises will raise US $7.8 billion in 2022

The financing of household photovoltaic and energy storage in the United States is an independent and complete industry, mainly dominated by specialized financial enterprises such as Sunrun, Sunova or Sunlight Financial. Traditional banks, credit cooperatives and mortgage providers also provide loans, but most household PV installers cooperate with one or more of the above enterprises. According to Bloomberg New Energy Finance, household photovoltaic financial enterprises raised 7.8 billion dollars in 2022.

High customer acquisition costs and inefficient bureaucracy lead to high upfront costs of household PV, which requires many American homeowners to seek external financing for their PV systems. The federal tax credit has contributed to the third-party ownership model of household PV, which has led to the birth of SolarCity (which has been acquired by Tesla) and Sunrun.

The financing scale of household photovoltaic financial enterprises has dropped sharply from US $16.3 billion in 2021 to US $7.8 billion in 2022. Photovoltaic loan financing has been hit hardest. Many US household PV companies are still using the funds obtained in the past few years, most of which are in the form of revolving credit.

In 2022, the number of household photovoltaic systems equipped with batteries for energy storage will decrease, but we expect that this trend will reverse once the shortage of batteries is relieved in the second half of 2023. The allocation of energy storage will significantly increase the overall upfront cost of the system, which makes financing more critical.

The surge in electricity prices in most states of the United States offset the impact of the increase in household PV funds and installation costs in 2022. The average coupon rate of the best quality loans, leases and power purchase agreements (PPAs) in 2022 is 4.3%, higher than 2% in 2021.

Loan is the most commonly used financing product in the market at present, because customers prefer to own photovoltaic systems directly. It's expected that although the interest rate rises and the federal government increases subsidies for household PV in the third-party ownership mode, loans will be the preferred financing item.

The scale of household PV market in the United States is sufficient to accommodate multiple financial institutions. Sunnova, Goodleaf and Mosaic Solar received a total of US $5.6 billion in financing in 2022, which is sufficient to provide capital expenditure funds (excluding fees and interest) for more than 2GW of household PV. Bloomberg New Energy Finance estimates that the new installed capacity of the market will reach 5.6GW in 2022 and 5.2GW in 2023.