Financing for the 5MW Managua Solar Container Project

4 FAQs about Financing for the 5MW Managua Solar Container Project

Can a developer buy a solar energy project?

Typically, an entity ('Owner”) would acquire a solar energy project from a developer at fair market value. The project would include not only the tangible solar assets but also the contract rights to sell the energy to the off-taker or homeowner (or lease the solar equipment to the off-taker/homeowner).

Can a solar project be financed without a long-term PPA?

While the wind power market has matured significantly in the past five years, leading to the successful project financing of “merchant” projects in the absence of long-term PPAs, Solar Projects are generally not yet able to be project financed in such a manner.

Can a pass-through lease monetize solar energy credits?

Pass-through leases, used extensively to monetize the rehabilitation tax credit, have been used recently to monetize solar energy credits (and more recently Treasury grants). Typically, an entity ('Owner”) would acquire a solar energy project from a developer at fair market value.

How does a merchant power project work?

In merchant power projects, lenders are able to receive assurance of the project's ability to repay its debt by focusing on commodity hedging, collateral values, and the income to be produced based on historical and forward-looking power price curves and fully developed markets.

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