WWith strong growth and increasing state and federal incentives, the solar energy industry presents a unique market opportunity for lenders willing and able to maneuver through the regulatory and other hurdles facing the industry. This article will examine the industry’s growth and offer tips for lenders seeking to participate in this active market. The Growth of the U.S. Solar Energy Market Favorable federal policies, declining costs and increasing demand for clean energy in both the public and private sectors have resulted in significant growth over the last decade. This growth has continued despite myriad difficulties stemming from the COVID-19 pandemic, such as supply chain issues and labor shortages. According to the Solar Energies Industry Association, over the last 10 years, the solar energy industry has seen annual growth at a rate of 33%. As a result, more than 140 gigawatts of solar capacity are currently installed throughout the United States,1 over 255,000 workers were employed in the solar industry as of 2021,2 and the value of the U.S. solar market reached $35 billion in 2022.3 It is this unparalleled growth that presents a unique value proposition for lenders. The Inflation Reduction Act Has Driven More Growth and Laid the Groundwork for Further Increases The Inflation Reduction Act (IRA),4 which was signed into law by President Biden on Aug. 16, 2022, implemented numerous policy changes that have already had a significant impact on the commercial solar market and should play a pivotal role in driving the industry forward for the next few years. Commercial Solar Financing TIPS FOR LENDERS By Vahan Khodanian and Gwenneth O’Hara, Buchalter Colorado Banker 22
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