Debt capital raises are expected to rise by ~4X y/y in 2023, with the lending arms of PE firms such as KKR, Hannon Amstrong, Blackstone, and Brookfield backing customer financing programs of installers such as Sunnova Energy, Sunrun, and SunPower. Meanwhile, equity raises are also expected to increase significantly as firms with proprietary technology solutions scale up to capture a larger market share of this booming segment.
Efforts to curb power bills and IRA tax credits are increasing the adoption of distributed systems, spurring investor interest. The 30% federal tax credits offered under the IRA have cut the cost of installations, with an average residential system witnessing up to a 30% cut, or ~$7,500, while saving ~$9,000 in electricity bills over its lifetime. Additionally, the availability of flexible and low-cost financing as well as the option to participate in net metering programs will also incentivize the adoption of distributed systems in order to hedge high power prices.
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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