LBNL Report Number
Although solar project finance has historically tended towards ever-more-complex financing structures, the next five years could bring a reversal in this trend, as solar costs decline and tax credits are phased down. In this low-cost, low-incentive future, solar project finance may gravitate towards more-conventional and lower-cost approaches. For example, utility-scale solar could be financed much like combined cycle gas plants are today, while distributed solar could be financed much like other capital improvements (non-residential sector) or expensive appliances (residential sector). This study contrasts and models historical, current, and possible future financing structures to gauge the contribution of financial evolution and innovation towards achieving SunShot’s LCOE goals. It finds that in all three sectors of the market, financial evolution and innovation have reduced, and could continue to reduce, solar’s LCOE.