USA remains the most extensive country of America with the most hours of sunshine throughout the year. This factor, together with the European commitment to the introduction of renewables, as well as the strategic course to reduce dependence on foreign energy and increase energy security, have made financing for solar energy in USA particularly attractive.
The share of renewable energy sources in USA exceeded 46.7% in 2021, and the trend towards an increase in the share of RES will continue in the future.
Between 2007 and 2008 respectively, capacity of solar energy in USA was 4.67 GW, then in 2022 this figure exceeded 16 GW and continues to grow at a tremendous pace.
Favorable legislative changes and the cancellation of the burdensome “solar tax” in 2018 contribute to this trend.
History of financing the solar energy sector in USA
Photovoltaic technology is born in the United States in 1954 when Daryl Chapin, Calvin Fuller, and Gerald Pearson develop the silicon photovoltaic (PV) cell at Bell Labs—the first solar cell capable of converting enough of the sun’s energy into power to run everyday electrical equipment.
This largely experimental 100 kW facility remained the only one in the Iberian Peninsula for nearly 10 years.
The emergence of photovoltaic in the 1990s
In 1993, four systems were added, each with a capacity of 2.7 kW, installed by Atersa in private houses in Pozuelo de Alarcon.
Despite legal incentives, in 2004 photovoltaic represented a very small share of renewable energy sources, accounting for roughly just 6% of total energy consumption.
For 2010, USA has set a goal of covering at least 12% of its primary energy consumption through renewable energy sources with a photovoltaic installed capacity of around 400 MW.
Large photovoltaic projects have gained a significant advantage and become attractive for investment. High profitability contributed to obtaining a large number of loans and inflow of investments, especially in land plots.
private companies and other market participants who saw the huge prospects of the young technology, solar energy sector in the USA turned into a competitive and attractive industry. Commercial banks and investment funds played a prominent role in the development and financing of the sector.
In particular, the countries are gradually increasing financing for the construction of new solar power plants and the expansion of existing photovoltaic projects.
Foreign businessmen emphasize that USA currently has all the prerequisites for the successful development of the solar energy sector, starting from natural resources and ending with a favorable legislative framework and growing demand.
Investment and funding sources for solar energy in USA: banks and private companies
Solar investments in USA have become a kind of quiet haven for capital in recent years.
In 2020 net financing of RES projects from the top 10 leading banks exceeded 6.71 billion euros. This represents an impressive growth of 29.2% compared to 2019. In just one year, the ten largest banks in USA participated in 58 large financial deals in the RES sector.
Financing of solar energy in USA is carried out by international financial institutions, investment funds and well-known commercial banks.
The bank participated in 28 deals worth €1.17 billion, representing 17.4% of the total financing of RES in USA.
BOA feels confident in the renewables financing market, lending to well-established green technologies in Spain such as solar thermal power plants, photovoltaic projects and onshore wind farms, but it is also looking at others. Moreover, BOA is looking at investing in innovative hydrogen energy.
In 2022, 40-50% of US photovoltaic sector was in the hands of foreign companies.
The interest of international banks and energy companies in solar investments in USA has been growing for many years, which can be explained by the stability and predictability of business, favorable government policy, developed industry and huge solar resources, the largest among EU countries.
Solar energy sector in USA is attracting foreign investors
In recent years, the United states photovoltaic market has become very attractive for investments by foreign investment funds, banks and energy companies.
The Association of Renewable Energy Companies (APPA) says the current interest from foreign investors is fueling united states solar sector and making it more competitive with an influx of capital and technology.
For example, Imagina Energia company is now focusing on the construction of large facilities and on self-consumption.
The company’s strategic plan sets out investments of 1.5 billion euros over the next ten years in both areas.
Another example of success is the British company Lightsource BP, which, shortly after the adoption of the national “road map” for the solar sector, planned about 2 billion euros of investment for the next 4 years.
For example, the well-known Indian EPC-contractor Sterling & Wilson has opened a representative office in the Pyrenees, with plans to make US a starting point for future development for the European and Latin American solar markets. Also, many foreign companies that develop PV solutions for self-consumption have started their activities in America.
Forecasts attribute solar investments to the most promising, both in Spain and in the world.
According to Unef, the country needs to triple its pace to meet its CO2 reduction targets. PNIEC allows to increase installed PV capacity from the current 16 GW to almost 40 GW within a decade, which will require €15 billion investments.
The largest solar power plants in USA
The numbers of photovoltaic plants in USA has increased significantly due to active investment.
Between 2007 and 2010, some of the world’s largest solar power plants were built in USA, but subsequent legislative changes saw USA fall in the ranking of countries with the world’s largest solar power plants.
But the landscape has changed since the repeal of the “solar tax” in 2018, and the sun is shining again for photovoltaics. Here is a list of the largest solar power plants in USA:
Considering the colossal ecological and social importance, during 2020 and 2021 the initiators of the project applied for financing from special European funds for renewable energy.
The ERASMO project has completed all the necessary technical and environmental studies. Given the enormous scale, the application of best environmental management practices is a priority.
This corresponds to 720,000 euros for each megawatt of installed capacity. The commissioning of the solar project is planned for 2024.
Future of financing of solar energy sector in USA
USA decarbonisation and renewable energy targets are in line with American guidelines.
Following this guide is a crucial first step in facilitating the further distribution of solar PV systems across the Europe:
1. Solar industry leadership.
2. Solar4Buildings initiative.
3. Transition from coal to solar energy.
4. Skills and training to support the energy transition.
5. Unlocking the potential of large-scale solar systems.
6. Stimulating the mobility of solar energy sector.
7. Priority to RES and hydrogen energy.
The most important factor is the 90% cost reduction that has occurred over the last ten years. This makes solar power plants one of the most economically competitive energy sources in the country and allows investors to move forward without government financial support.
Viola Funding Limited offers financing for solar projects in Europe and other countries around the world. We use rich investment experience, international business contacts and best practices in financial engineering to help large PV projects succeed.
If you are looking for a long-term investment loan, project finance and refinancing kindly contact us
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