SFA Research Corner: Solar ABS Issuance Warmed by ITC and Alternative Energy Investing

In SFA’s Research Corner, issuance of Solar ABS reflects the growing consumer interest in financing PV systems. In 2022, $4.3 billion of solar ABS were offered—a 207% increase over 2017 and a 20% increase over 2021—in a time when the broader ABS market dropped by 8%. According to the latest report from the Energy Information Administration (EIA), the demand for solar is expected to continue. Owing much to tax incentives like the federal Investment Tax Credit (ITC), the EIA anticipates renewable sources to provide 16% of electricity generation nationwide in 2023, 18% in 2024. Solar ABS, with its stable credit performance—90% of solar ABS bonds are rated investment grade according to KBRA’s Solar Loan Index—will continue to draw investors seeking highly-rated green investments.