Solar Love
  • Rooftop Solar
    • Energy Storage
  • Solar Panels
  • Policy
  • Research
    • Science
    • Market Research
    • Solar Perceptions & Polls

Solar Love

  • Rooftop Solar
    • Energy Storage
  • Solar Panels
  • Policy
  • Research
    • Science
    • Market Research
    • Solar Perceptions & Polls
InvestmentPVSolar $Solar ProjectsYieldcos

ITC Reduction Won’t Hurt Yieldcos, Deutsche Bank Reports

by Zach July 11, 2015
written by Zach July 11, 2015
ITC Reduction Won’t Hurt Yieldcos, Deutsche Bank Reports

Almost across the board, it is expected that the phasing out of the federal investment tax credit (ITC) for solar will result in a big drop in US solar power installations… unless it is renewed, of course. However, one segment of the market that may be nearly immune to the drop of the 30% tax credit to a 10% tax credit is the yieldco market, according to the analysts at Deutsche Bank.

solar power itc

Utility-scale solar is expected to be hit very hard in 2017, following the 20% ITC drop. “But Vishal Shah of Deutsche Bank is confident that many yieldcos will feel little impact. He claims many have already untangled themselves from their tax equity partner and replaced their contribution with increased debt,” John Parnell reports.

Yieldcos have been a huge boon to the solar market, and to investors looking for low-risk, moderate-return investment opportunities in the clean energy space. SunPower, First Solar, SunEdison, Canadian Solar, and others have launched yieldco products to improve their own financial story and keep growing the solar market.

“While the cash on cash yield is potentially lower than using a tax equity partner, the yieldco certainly benefits from a higher tax shield by not including the tax equity provider,” wrote Shah. “Besides, the yield is still well above the cost of equity for the yieldcos. Second…once the ITC steps down to 10%, the CAFD [cash available for distribution] only steps down from ~US$10.56 million per 100MW to ~US$8.57 million per 100MW and the yield is still above the cost of equity.”

Looks good to my eyes.

Deutsche Bank expects a 50% compound annual growth rate (CAGR) for yieldcos over the coming 5 years, while it expects a 30% CAGR for the broader global solar power market.

While the North American yieldco market gets a lot of positive attention, Shah thinks the Chinese market is getting too much skepticism. He believes that other investors are putting too high of a risk factor on the projects.

“Unlike their US counterparts, Hong Kong-listed Shunfeng releases quarterly generation data from its solar plants offering full transparency on their performance. This offers would-be investors an indicator of their ongoing output that should go some way to making investors more comfortable with investing in them,” Parnell adds.

Deutsche BankITCShunfeng
0 comment
0
FacebookTwitterPinterest
Zach

is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy since 2009. Aside from his work on CleanTechnica and Planetsave, he's the founder and director of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.

previous post
Global Solar PV Capacity Nearing 200 GW
next post
Akon Plans To Power Up Africa

You may also like

Mitsui To Partner With Indian Company For Distributed...

June 10, 2019

India’s NTPC Offers Solar Project Management Services To...

June 9, 2019

Equinor & Scatec Solar Complete 162 Megawatt Brazilian...

November 29, 2018

Gamesa Awarded 400 Megawatt Solar Project In Egypt

November 29, 2018

Neighborhood Power Installing 10 Megawatt Solar Bifacial+Tracker Project...

November 20, 2018

EDF Renewables Commissions 110 Megawatts Of Solar In...

October 30, 2018

Maui Switches On Another 2.87 Megawatts Of Solar...

October 8, 2018

Capital Dynamics Acquires 121 Megawatt Springbok 3 Solar...

September 27, 2018

EnSync Energy Sells CAL FIRE Solar PPA Project...

August 20, 2018

India Shows More & More Appetite For Solar...

June 4, 2018

Follow Me

Facebook

Recent Posts

  • Meet PVCase: A 3D Solar Design Software That Every PV Designer Should Consider

    June 12, 2019
  • Mitsui To Partner With Indian Company For Distributed Solar Projects

    June 10, 2019
  • India’s NTPC Offers Solar Project Management Services To ISA Members

    June 9, 2019
  • Equinor & Scatec Solar Complete 162 Megawatt Brazilian Solar Plant

    November 29, 2018
  • Gamesa Awarded 400 Megawatt Solar Project In Egypt

    November 29, 2018
  • Facebook

@2019 - All Right Reserved solarlove.org


Back To Top