Wiser Capital Blog

June 9, 2014 | No comments yet

Wiser Capital Increases Transparency in Project Finance

Gaining access to financing shouldn’t be a black box. All participants involved in a transaction, from the consumer buying the electricity, to the company selling and building the project should know exactly what it takes to attract investors. Additionally, investors should not have to be solar experts to invest in solar projects, just as an investor in Google doesn’t need to be a software engineer.

It is in this spirit that Wiser Capital introduced a comprehensive risk assessment model known as WSAR™ (or Wiser Solar Asset Rating score). The goal of WSAR™ is to identify and rate the risks associated with third party financing, like leases and power purchase agreements, for small and medium scale commercial solar installations. WSAR™ evaluates over 85 specific items that could impact system performance or limit the cash flow anticipated from the electricity payments. WSAR™ can be utilized for facilities with public credit rating and facilities without public credit rating. This means that every business from small wineries and non-profits to large manufacturers and hotels can potentially benefit from solar electricity.

Businesses interested in switching to solar can utilize WSAR™ to determine the bankability of their project on their own time and terms. WSAR™ and the Wiser Capital platform are designed to walk a potential host facility through the process of going solar. WSAR™ is not just a scoring mechanism, it is an educational tool as well. The WSAR™ scorecard outlines the key aspects of the risk assessment and provides detailed descriptions of what dictates a high or low score. By detailing the exact information necessary to gain access to project financing WSAR™ reduces roadblocks and moves projects forward more quickly.

WSAR™ has been fully integrated into the Wiser Capital cloud-based platform, providing the ability for solar integrators and EPCs to determine quickly whether a particular lead is a financeable project. If the score is low, they can provide more information and increase certainty to build their score, or move on to another project until that information can be obtained. WSAR™ increases transparency and allows the integrator to focus efforts on viable projects, thus potentially reducing customer acquisition costs, shortening the sales-cycle, and increasing percentage of project closes.

Investors looking to buy a single project, or a pool of projects, can utilize WSAR™ to determine which projects meet their risk profile. They do not need to be, or hire, industry experts because all of the applicable information is included in WSAR™ and weighted according to risk assessment. Additionally, due diligence is standardized so that projects can be compared side by side, or pooled into portfolios. By standardizing the process, Wiser Capital has opened the market for new types of investors and is driving down the cost of capital.

The six major categories of risk evaluated through WSAR™ are (i) the energy consumers’ ability to pay, (ii) the system’s capacity to perform, (iii) the project development and ongoing life-cycle risks, (iv) the legal and public policy risks associated with solar installations, (v) the long term needs to assure project operations, maintenance and servicing, and (vi) the level of “first loss” reserves provided by the project counterparties. WSAR™ accurately quantifies risk and reward for all parties involved in a third party ownership of solar PV. By increasing transparency, education and standardization Wiser Capital is bringing certainty to a growing industry. For full details, please visit the Wiser Capital website here.

Leave a Reply

Your email address will not be published. Required fields are marked *