NREL is a national laboratory of the U.S. Department of Energy

Office of Energy Efficiency & Renewable Energy

Operated by the Alliance for Sustainable Energy, LLC

This report is available at no cost from the National Renewable Energy

Laboratory (NREL) at www.nrel.gov/publications.

Contract No. DE-AC36-08GO28308

Solar Lending Practices by 

Community and Regional 

Financial Institutions

Paul Schwabe and David Feldman

National Renewable Energy Laboratory

Technical Report

NREL/TP-6A20-71753

June 2018
NREL is a national laboratory of the U.S. Department of Energy

Office of Energy Efficiency & Renewable Energy

Operated by the Alliance for Sustainable Energy, LLC

This report is available at no cost from the National Renewable Energy

Laboratory (NREL) at www.nrel.gov/publications.

Contract No. DE-AC36-08GO28308

National Renewable Energy Laboratory

15013 Denver West Parkway

Golden, CO 80401

303-275-3000 • www.nrel.gov

Solar Lending Practices by 

Community and Regional 

Financial Institutions 

Paul Schwabe and David Feldman

National Renewable Energy Laboratory

Technical Report

NREL/TP-6A20-71753

June 2018
i

This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications.

NOTICE

This work was authored in part by the National Renewable Energy Laboratory, operated by Alliance for 

Sustainable Energy, LLC, for the U.S. Department of Energy (DOE) under Contract No. DE-AC36-

08GO28308. Funding provided by the U.S. Department of Energy Office of Energy Efficiency and 

Renewable Solar Energy Technologies Office. The views expressed in the article do not necessarily 

represent the views of the DOE or the U.S. Government.

This report is available at no cost from the National 

Renewable Energy Laboratory (NREL) at 

www.nrel.gov/publications.

U.S. Department of Energy (DOE) reports produced 

after 1991 and a growing number of pre-1991 

documents are available 

free via www.OSTI.gov.

Cover Photos by Dennis Schroeder: (left to right) NREL 26173, NREL 18302, NREL 19758, NREL 29642, NREL 19795.

NREL prints on paper that contains recycled content.
ii

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Acknowledgments

The authors would like to thank the invaluable contributions from Kelsey Read and Andrew 

Belden from Massachusetts Clean Energy Center as well as the following individuals and 

organizations for their insightful perspectives and review comments: Justin Allender of First 

Green Bank; Sean Baird of Medallion Bank; Carol Chernikoff of Alternatives Credit Union; Ron 

Felder of Redwood Credit Union; Jasna Filipović and Justin Fuller of Celtic Bank; Phillip 

Forbert, Lance Griswold, and Danielle Silva of U.S. Eagle Credit Union; Kyle Henderson of 

FirstBank; Sarah Llewellyn and Chad Tomsich of Elevations Credit Union; David Miller and 

Pete Yang of Alpine Bank; Scott Pellegrini of Provident Credit Union; Steve Sherman formerly 

of GreenChoice Bank; Bob Schweigert of Salal Credit Union; and Skyler Webster of New 

Resource Bank. The authors also thank Jarett Zuboy for his superb editorial support and Eric 

O’Shaughnessy and Billy Roberts for their help with graphics. 

This work was authored by the National Renewable Energy Laboratory, operated by Alliance for 

Sustainable Energy, LLC, for the U.S. Department of Energy (DOE) under Contract No. DE-AC36-

08GO28308. Funding provided by the Solar Energy Technologies Office of the U.S. Department of 

Energy’s Office of Energy Efficiency and Renewable Energy. The views expressed in the article do not 

necessarily represent the views of the DOE or the U.S. Government.
iii

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List of Acronyms

CRFI community and regional financial institution

FDIC Federal Deposit Insurance Corporation

FICO Fair Isaac Corporation (credit score)

HELOC home equity line of credit

ITC investment tax credit

MassCEC Massachusetts Clean Energy Center

NCUA National Credit Union Administration

NREL National Renewable Energy Laboratory

PACE property assessed clean energy

PPA power-purchase agreement

PV solar photovoltaic

SREC Solar Renewable Energy Certificate

TPO third-party ownership

UCC Uniform Commercial Code
iv

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Executive Summary

Current projections of solar photovoltaic (PV) system costs and deployment in the United States 

indicate substantial capital requirements over the next 30 years and beyond. The U.S. Energy 

Information Administration estimates that, from 2019 to 2050, approximately $650 billion will 

be spent on U.S. PV system deployment (EIA 2018). Concurrently, community and regional 

financial institutions (CRFIs), including community banks and credit unions, collectively hold 

$3.6 trillion in assets. These institutions could provide a significant portion of the required PV 

capital while creating a large investment opportunity for themselves. Accelerating the 

involvement of CRFIs in the PV financial marketplace would increase the total amount of capital 

available for PV projects and broaden the types of financing products used.

From 2012 to 2014, third-party-ownership (TPO) of residential PV systems, including leases and 

power-purchase agreements represented 62% to 72% of the U.S. market. Beginning in 2015, 

TPO market share decreased while PV loans and cash purchases grew. By 2017, TPO fell to 41% 

of annual installations while loans made up 33% of the market (the remainder were direct 

purchases). The increase in PV loans and cash purchases was due to several factors, including 

declining PV system costs, more widespread loan availability, and changing business models of 

national installers among other reasons (Mond 2018). The shift towards PV loans has allowed 

new, smaller financiers such as CRFIs to enter the PV financing market. 

CRFIs typically offer PV financing via loans to small residential and commercial borrowers. A 

sampling of CRFI perspectives collected from industry interviews indicates positive experiences 

with the development and evolution of PV loans. Quantitative data on 6,770 loans representing 

over $186 million in lending also suggest PV loans are performing very well to date—although 

these results must be put in the context of the high credit quality of borrowers, early state of the 

loans, and recent robust economy (Table ES-1). The strong performance to date suggests 

continued expansion of loan offerings by CRFIs already operating in this space and likely

attraction of new entrants. Although most CRFI investment has targeted distributed PV without 

storage, other applications will likely emerge, such as community PV and PV coupled with 

energy storage. Looking ahead, access to additional credit and market information is critical for 

accelerating the role of CRFIs and other financial institutions in supporting U.S. PV growth.

Table ES-1. PV Loan Sample Summary Statistics by CRFI Portfolio Size

PV loan 

portfolio

(million)

No. of 

CRFIs

Total

loans

No. of

loans

Avg.

seasoning

in 

months

FICO

≥ 720

FICO

681-

719

FICO

≤ 680

Chargeoffs

30 

days

late

60 

days

late

90 

days 

late

> $10 6 $138,699,859 4,929 12 78% 14% 8% 10 171 61 24

>$5–$10 4 $30,867,895 1,091 13 82% 11% 6% 0 4 0 0

>$1–$5 6 $13,886,826 658 14 76% 12% 11% 2 0 0 0

< $1 6 $2,851,725 92 4 88% 9% 3% 0 3 0 0

Totals 22 $186,306,305 6,770 12 178 61 24

Source: Mass Solar Loan (2018) and individual CRFI contributions
v

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Table of Contents

1 Introduction........................................................................................................................................... 1

2 Overview of CRFIs and PV Lending.................................................................................................... 3

2.1 CRFIs ............................................................................................................................................ 3

2.2 Primary PV Loan Types................................................................................................................ 5

3 Themes about PV Loan Products from CRFI Interviews.................................................................. 9

3.1 Market Demand, Institutional Philosophy, and Comfort with Home-Improvement Loans Drive 

PV Loan Product Development..................................................................................................... 9

3.2 PV Loan Product Development Benefits from a Thoughtful Research, Approval, and ProductRollout Period ............................................................................................................................... 9

3.3 Smaller CRFIs Possess Unique Challenges and Opportunities................................................... 10

3.4 PV Loan Products and Processes Vary across Institutions ......................................................... 11

3.5 UCC-1 Fixture Filing Is Useful as a Security Interest, but Repossessing PV Systems Is 

Impractical................................................................................................................................... 12

3.6 PV Loan Repayment Has Been Strong, but Most Loans Are Young and Were Made to Highly 

Rated Borrowers.......................................................................................................................... 12

3.7 Relationships between PV Installers and CRFIs Can Enhance the Marketing of PV Loan 

Products....................................................................................................................................... 13

3.8 CRFIs Are Willing to Extend PV Loans to Lower-Rated Borrowers, but Barriers Exist........... 14

3.9 PV Energy Savings Are Generally Given Little Weight during Loan-Approval Processes ....... 14

3.10 Regulations Have Not Hindered PV Loans, but Educating Regulators about PV May Help ..... 15

3.11 Challenges Remain for PV Loan Products.................................................................................. 15

4 Quantitative Indicators of PV Loan Performance............................................................................ 17

5 Conclusions and Future Needs......................................................................................................... 20

References................................................................................................................................................. 21
vi

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List of Figures

Figure 1. Percentage of total deposits held by community banks in 2017.................................................... 4

Figure 2. Portfolio breakdown for loans made by community banks and credit unions in 2017.................. 5

Figure 3. Variations in PV loan types by level of security ........................................................................... 7

Figure 4. Number of CRFI PV loans by seasoning..................................................................................... 18

Figure 5. Credit score summary across entire sample of borrowers........................................................... 19

List of Tables

Table ES-1. PV Loan Sample Summary Statistics by CRFI Portfolio Size ................................................ iv

Table 1. Bank Assets, Loans, and Number of Institutions in the United States ........................................... 3

Table 2. PV Loan Sample Summary Statistics by CRFI Portfolio Size ..................................................... 17
1

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1 Introduction

Current projections of solar photovoltaic (PV) system costs and deployment in the United States 

indicate substantial capital requirements over the next 30 years and beyond. The U.S. Energy 

Information Administration estimates that, from 2019 to 2050, approximately $650 billion will 

be spent on U.S. PV system deployment (EIA 2018). Concurrently, community and regional 

financial institutions (CRFIs), including community banks and credit unions, collectively hold 

$3.6 trillion in assets. These institutions could provide a significant portion of the required PV 

capital while creating a large investment opportunity for themselves. Accelerating the 

involvement of CRFIs in the PV financial marketplace would increase the total amount of capital 

available for PV projects and broaden the types of financing products used. 

PV systems installed in the United States vary considerably in terms of size, location, and 

procurement mechanism. Large, centralized PV systems constitute most of the country’s total 

installed PV capacity, but the greatest number of PV systems are distributed projects located on 

residential or commercial property (95.4% and 4.5% of U.S. PV systems, respectively) (SEIA 

and GTM Research 2018). Because each individual project represents a relatively small financial 

investment, some businesses have aggregated numerous projects to increase the size and

attractiveness of distributed PV investments. Over the past 10 years, distributed PV markets have 

grown considerably; in 2017 alone, investment in U.S. distributed PV systems totaled over $10

billion (SEIA and GTM Research 2018). 

From 2012 to 2014, third-party-ownership (TPO) of residential PV systems, including leases and 

power-purchase agreements represented 62% to 72% of the U.S. market. Beginning in 2015, 

TPO market share decreased while PV loans and cash purchases grew. By 2017, TPO fell to 41% 

of annual installations while loans made up 33% of the market (the remainder were direct 

purchases). The increase in PV loans and cash purchases was due to several factors, including 

declining PV system costs, more widespread loan availability, and changing business models of 

national installers among other reasons (Mond 2018).

The shift toward host ownership of PV systems has allowed new, smaller financiers—such as 

CRFIs—to enter the market, including lenders dedicated to small residential and commercial 

projects. The TPO market presents barriers to many small lenders, particularly as TPO projects 

often require complex investment structures with outside tax-equity investors to capture the 

value of the investment tax credit (ITC).

1 Providing loans rather than leases and power-purchase 

agreements plays to the strengths of many CRFIs as solar loans are like other CRFI products and 

because complex financial structuring is not required to use the ITC, which remains with the 

homeowner.

This report therefore examines the experiences and perspectives of CRFIs that have developed

and launched PV loan products, including the evolution of the products and their performance.

 

1 Given the limited number of tax-equity investors participating in the U.S. market, and the premium they can charge 

for many projects with limited options, there may be a role for some CRFIs in this space. That said, the federal wind 

and solar tax credits are scheduled to phase down over the next few years, so institutions may decide not to invest 

resources into learning how to structure these complex financial transactions with potentially limited availability. 
2

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This information could assist other CRFIs that are considering participating in or expanding their 

role in PV financing.

The remainder of this report is organized as follows. Section 2 gives an overview of U.S. CRFIs 

and the financial products they typically offer. Section 3 provides CRFI perspectives about their

experiences with PV financing products based on industry interviews. Section 4 presents 

quantitative data on PV loan performance and borrower credit profiles. Section 5 concludes and 

identifies future needs related to expansion of PV lending.

2

 

2 The National Renewable Energy Laboratory (NREL) has conducted previous PV-financing research. From 2013–

2015, the Solar Access to Public Capital project examined how a securitization market for TPO PV allowed 

national-level players to increase PV project capital by attracting institutional and retail investors (NREL 2018). 

NREL also compared PV loans with other TPO products such as PPAs and leases (Feldman and Lowder 2014). This 

previous research focused on financial products rather than types of financial institutions.
3

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2 Overview of CRFIs and PV Lending 

This section first discusses the importance of CRFIs in facilitating community investments and 

then briefly describes the characteristics of PV loan types. Here CRFIs include community banks 

insured by the Federal Deposit Insurance Corporation (FDIC) and credit unions insured by the 

National Credit Union Administration (NCUA).

3

2.1 CRFIs

Table 1 shows the sizes and numbers of U.S. banks and credit unions. FDIC-insured community 

banks and NCUA-insured credit unions account for approximately 19% of all bank assets ($3.6 

trillion), 24% of all bank loans ($2.6 trillion), and 96% of U.S. banking institutions (10,911 

institutions).

Table 1. Bank Assets, Loans, and Number of Institutions in the United States

Assets in $ 

trillions

(% of total)

Loans in $ 

trillions

(% of total)

Number of 

institutions

(% of total)

FDIC-insured non-community banks $15.3 (81.0%) $8.2 (76.6%) 443 (3.9%)

FDIC-insured community banks $2.2 (11.6%) $1.6 (15.0%) 5,227 (46.0%)

NCUA-insured credit unions $1.4 (7.4%) $1.0 (9.3%) 5,684 (50.1%)

Total $18.9 $10.7 11,354

Sources: CUNA (2017), FDIC (2017, 2018)

The FDIC defines community banks as those that “focus on providing traditional banking 

services in their local communities. They obtain most of their core deposits locally and make 

most of their loans to local businesses” (FDIC 2012). Further, CRFIs are often considered 

“relationship” lenders rather than “transaction” lenders. Community banks can be apt to make 

credit decisions based on local knowledge and unique data obtained through long-term 

relationships owing to their deep understanding of local market dynamics (FDIC 2012). Small 

businesses may rely more heavily on this relationship approach, because they may be challenged 

to qualify for loans based on the more rigid, standardized qualification parameters of noncommunity banks (FDIC 2012). Community banks are frequently privately owned and locally 

controlled, which may balance the competing interests of shareholders, customers, employees, 

and the local community. This is also true for credit unions, which are owned by their members 

and operate for the sole purpose of servicing their members. Larger banks are more likely to be 

publicly owned and tend to have stronger associations with the capital markets. They also 

operate in more places with centralized and model-based loan-approval structures. (FDIC 2012).

Community banks are particularly important and prevalent in certain regions of the country. In 

2014, community banks held 72% of deposits in U.S. rural counties and 56% of deposits in 

 

3 Some CRFIs operate certain business lines, such as direct lending, in more than one market, while other business 

lines, such as retail banking, can be restricted to a smaller geographic footprint. This report does not exclude CRFIs 

even if a business line is operated in more than one market.
4

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micro-counties (FDIC 2015).

4 Many states with a large community banking presence are in the 

middle of the country, where PV penetration tends to be relatively low (Figure 1).

5 CRFIs could

close this gap by providing financial solutions that help make distributed PV economically 

attractive in their region.

Figure 1. Percentage of total deposits held by community banks in 2017

Source: FDIC (2018)

Because of their size, geographic variation, and local market knowledge, CRFIs are well suited 

to develop innovative or tailored PV financing products. Relatively few banking institutions

currently offer PV loan products, and existing product specifications might not be desirable in 

every market. However, new PV loan products could be developed for many of the communities 

served by CRFIs, and the willingness of many CRFIs to collaborate and share could enable rapid 

dissemination and evolution of the new products.

 

4 Rural counties are defined as those with a population of less than 10,000 people. Micro-counties are defined as 

having between 10,000 and 50,000 people (FDIC 2012). 

5 Data as of June 30, 2017. 
5

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Many CRFI loan types could be adapted for financing PV systems. As shown in Figure 2, most 

community bank loans are for commercial and residential real estate (70%), followed by 

commercial and industrial activities (13%), construction and development (7%), and unsecured 

loans to individuals (4%).6 Credit unions generally focus more on individual customers and less 

on commercial activities, with 83% of their loans made for residential real estate or automobiles, 

7% for commercial and industrial activities, and 10% for unsecured loans to individuals.

Distributed PV systems are usually physically attached to real estate, much like many homeimprovement projects (e.g., roof replacements, kitchen remodeling), which are often funded 

through real estate loans. A 2018 Federal Reserve Bank of New York study found that 56% of 

home equity lines of credit (HELOCs) and 72% of home equity loans—types of real estate 

loans—were used to make home improvements (Fuster et al. 2018). In the commercial space, a 

PV system is like other equipment financings and could be funded by commercial and industrial 

loans. Finally, because the cost of PV systems has fallen dramatically, loans made to an 

individual on an unsecured basis may also fund a PV project. Although unsecured loans to 

individuals represent a relatively small portion of CRFI loan portfolios, they still constituted over 

$160 billion at the end of 2017 (see Table 1 and Figure 2).

Figure 2. Portfolio breakdown for loans made by community banks and credit unions in 2017

Sources: CUNA (2017), FDIC (2018)

2.2 Primary PV Loan Types

PV loans generally fall into a few categories, with variations. As shown in Figure 3, PV loans 

can be classified by their level of security, based on what the borrower pledges as collateral for 

 

6 An unsecured loan is a loan issued based on the creditworthiness of the individual, rather than being based on 

collateral such as real estate equity.

29%

49%

41%

34%

13%

7% 7%

4%

6% 10%

0%

20%

40%

60%

80%

100%

Community Banks Credit Unions

Percentage of loan portfolio

Other

Unsecured to individuals

Construction and development

Commercial & industrial

Automobile

Commercial real-estate

Residential real-estate
6

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the loan. PV loans have typically been secured by real estate, by the equipment itself through a 

Uniform Commercial Code (UCC)-1 filing,

7 or as an unsecured personal loan.8

• Loan secured on real estate—PV loans can be secured via the underlying real estate, 

typically, in the residential space, through a home equity loan (also referred to as a 

second mortgage) or a HELOC.9 Like other real estate loans, they require a closing, or 

settlement, at which all parties sign the necessary loan documents. To get to closing, the 

real estate typically is appraised to ensure the owner has sufficient equity in the property,

the loan is registered with the county clerk, and taxes are evaluated. This is a heavily 

regulated process, particularly since the recent mortgage crisis. Obtaining a real estate 

loan requires time and money, but borrowers can often get a relatively low rate compared 

with the rates of other types of loans.10 Real estate loans typically carry longer repayment 

terms, which allows PV system owners to match the loan payments more closely with the 

energy cost savings from the PV system.

• Loan secured on equipment11—Many PV loan providers secure the loan through a 

UCC-1 filing with the county or state (or both) of the borrower, which gives notice of the 

lender’s lien (also referred to as a security interest) on the PV property, but importantly 

not on the underlying real estate. The UCC-1 filing gives the lender certain rights, such as 

repossession of the PV system itself until the loan is repaid. UCC-1 filings require less 

upfront time, money, and paperwork compared with real estate loan processes, but the

UCC-1 security interest still comes up in a title search, which is typically conducted 

when a property is sold or refinanced. That said, the solar lender may have difficulty 

recouping the value of the PV system in the case of repossession, and the UCC-1 filing 

must be re-registered periodically. For these reasons, many lenders consider solar loans 

with UCC-1 filings as not fully secured.

• Unsecured loan—With an unsecured loan, the lender holds no collateral but instead 

makes the loan based on an individual’s credit quality, income, and debt level. Such loans 

can be closed more easily and quickly than other loans, but the interest rate charged is 

typically higher and with a shorter term than the rate and term of a secured loan. In 

addition, unsecured loans are usually only available to borrowers with good credit or a 

high income and with limited outstanding debt.

 

7 UCC-1 refers to Form 1 (UCC Financing Statement) (IACA 2018). 8 In some instances, banks have also secured loans using incentive streams generated by PV assets, such as Solar 

Renewable Energy Certificates (SRECs). This option is only available in markets with SRECs of sufficient value 

and is dependent on the PV asset continuing to generate electricity (to produce SRECs). 9 HELOCs typically have a drawdown period with a floating interest rate. Funds from second mortgages are 

received at the beginning of the loan, and the loan is more likely to have a fixed rate.

10 The interest payments on home equity loans and HELOCs can be tax deductible under certain qualifying uses. 

Generally, the home equity loan or HELOC is borrowed for home-improvement purposes, and the total of the 

borrower’s first mortgage and their home equity loan or HELOC does not exceed $750,000. The Tax Cut and Jobs 

Act of December 2017 lowered this interest deduction cap from $1,100,000 to $750,000 and narrowed the allowable 

uses to primarily home-improvement related. Given these changes, it is possible that demand for home equity loans 

and HELOCs may fall, particularly in markets with comparatively high home prices and a higher probability of 

reaching the $750,000 combined interest deduction cap (Harney 2018).

11 May also be referred to as a chattel loan. Although PV equipment is technically considered collateral, the 

practicality and cost effectiveness of physically removing the equipment from the property remains an open question

(see Section 3.5).
7

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Figure 3. Variations in PV loan types by level of security

In addition to level of security, PV loans can be characterized by several criteria:

• Tenor (loan length)—Because PV assets are long-lived, it is often advantageous for a 

PV loan to have a longer tenor. A longer tenor reduces the amount of each periodic 

payment, potentially aligning the loan payment more closely with the PV energy savings. 

Some UCC-1 loans and personal, unsecured loans have relatively short tenors, but some 

banks have lengthened the tenor as their programs have evolved. For this reason, PV loan

tenors can vary from 3–20 years.

• Prepayment and reamortization12—Some loans have prepayment penalties to 

compensate lenders for receiving fewer interest payments over the course of the loan. PV 

systems currently benefit from the 30% federal ITC, typically taken in the first year of 

operation. Therefore, PV system owners often get 30% of the system cost back very early 

in the loan. Many PV loans offer a one-time low or no-fee prepayment option, which the 

borrower can use to buy down the outstanding principal using the ITC, or no prepayment 

penalty over the life of the loan. Some borrowers also reamortize the loan after the 

prepayment to reduce monthly debt payments further.

 

12 Reamortization is the process of recalculating the monthly loan payment amount while keeping the same original 

schedule of loan payments (i.e., tenor). A loan is typically reamortized when a significant portion of its principal is 

paid.
8

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• Government involvement—Many banks have introduced PV loan products based on 

market conditions without government financial support, but some loan products have 

benefited from state or federal government programs. Some state agencies have helped 

banks set up PV loan products and provided technical expertise to get banks comfortable 

with PV as an asset class. Other programs have subsidized the cost of PV loans by 

offering credit support (guaranteeing all or some of the loan amount), buying down the 

interest rate of a loan, or buying down the cost of a PV project (reducing the loan 

principal, typically through rebates). These programs are often instituted to establish or 

accelerate a market or to provide loans to customers who may not otherwise qualify (e.g., 

individuals with low income).13

 

13 Local governments are also heavily involved in property assessed clean energy (PACE) programs, which offer 

commercial and residential customers loans that are tied to their property taxes.
9

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3 Themes about PV Loan Products from CRFI

Interviews

This section summarizes the themes from in-depth interviews with 20 PV financing experts from 

14 CRFIs or related stakeholder institutions, describing shared and diverse experiences of PV 

financing products. Themes arising from more than one institution or individual are included, 

and no approach is presented as favorable. The themes are described loosely in chronological 

order, starting with product initiation, followed by operational experiences, and concluding with 

forward-looking perspectives.

3.1 Market Demand, Institutional Philosophy, and Comfort with 

Home-Improvement Loans Drive PV Loan Product Development

In addition to the shifting PV market trends described earlier, PV loan products are frequently

initiated in response to customer or member requests and repeated requests provide strong 

motivation. One interviewee had at least 10 customer inquiries before committing time and 

resources to the possibility of a PV-specific product. Conversely, in markets with barriers to PV 

adoption, CRFIs may be limited in their ability to stimulate PV demand, but they may alleviate a 

financing barrier by establishing a PV loan product. Commercial PV installations seem to have 

fewer dedicated lending products compared with the residential sector.

The motivations to offer PV loan products extend beyond requests from potential borrowers. 

Some CRFIs see promotion of PV as part of their commitment to environmental offerings or a

triple-bottom-line (social, environmental, financial) business philosophy. Others see PV loans as 

an opportunity to grow the institution’s lending portfolio or interact with new customers who 

might also be directed to the institution’s other services. 

In some cases, home-improvement contractors who banked with a CRFI asked the institution to 

create a PV loan offering, so they could recommend the product to their customers. Experience 

lending for similar home-improvement measures also drives PV loan product development or 

innovation. Several interviewees suggested PV loans complement existing home-improvement 

products. The interviewees generally reported positive experiences with energy efficiency

lending (e.g., new windows, heating, ventilating, and air conditioning) and thought PV has a 

similar risk and performance profile. Some institutions came to PV lending through other PVspecific products, such as PACE financing or community PV projects. Several institutions 

entered the market in response to an attractive support policy, such as a state-based loan loss 

reserve fund for PV lending.

3.2 PV Loan Product Development Benefits from a Thoughtful 

Research, Approval, and Product-Rollout Period

All interviewees noted the need to devote considerable time and resources to understanding and 

developing a dedicated PV loan product. The education process typically entails a designated 

product lead researching the PV industry generally (technology, construction, pricing, risks, and 

reliability), the financing options available to local borrowers, the risks associated with PV 

lending, national and local competition, and the types of PV loans. As one banker noted, an 

overarching rule of banking is to know your product, know your market, and know your 
10

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collateral. This industry research phase typically requires 6 months to 1 year, depending on the 

financial institution’s familiarity with the PV industry.

There are multiple ways to develop a solar loan product. At some institutions, research is driven 

by an opportunistic, entrepreneurial and environmentally minded staff member (such as a loan 

officer) who champions the process, secures internal resources, and obtains decision-maker

approvals. At other institutions, a management-level product-development officer (i.e., the chief 

lending officer or chief credit officer) provides the primary market research and justification for 

the product. In many cases, research and product development is driven by internal personnel. 

However, in some cases, an outside specialist with experience in the specific product class is 

hired to develop the product.

The internal champion often uses a concise product brief to secure internal approval, which can

include approval by the chief credit officer, chief financial officer, loan and finance committee 

members, and potentially the board of directors. The brief can include information on local 

customer interest in the product, an assessment of the competitive lending landscape and market 

share, information on the technology and asset class, investigations into the local installer base,

and a qualitative risk matrix. Decision makers scrutinize the loan tenors, which tend to be longer 

for PV than for other products, and the typical loan sizes among other criteria.

CRFIs frequently protect themselves against the unknowns of a new asset class by establishing a 

smaller initial loan product offering or portfolio concentration limits. Thus, they can roll out the 

program with relatively modest expectations and allow for a testing period, which can be 

reassessed later in the product-development cycle (often 1 or 2 years after program launch). 

Finding the right product balance is often part of the initial rollout. Too much volume, and the 

institution might feel uncomfortable with the portfolio concentration. Too little volume, and the 

time and setup costs are harder to justify.

3.3 Smaller CRFIs Possess Unique Challenges and Opportunities 

It can be challenging for smaller CRFIs to establish a large portfolio of new loan products. Many 

have no dedicated product-development personnel, so personnel with other job duties must be 

tasked with establishing new loan products. In addition, because smaller institutions offer 

relatively few loans and cannot be over-weighted in any area (owing to concentration risk), the 

number of PV loans they can make may be limited, especially since there is a learning curve 

associated with a new asset class. Such limitations are particularly relevant for unsecured loans, 

because CRFIs are required to establish a loan loss reserve in case of default, which represents 

money not earning a return. A new product at a larger CRFI would represent a much smaller 

share of the total loan portfolio. Finally, the effort required for any product subject to significant 

regulations, such as real estate loans, may outweigh the product’s benefits for a smaller 

institution without the dedicated capabilities to manage new requirements.

On the other hand, CRFIs have some advantages related to implementing PV loan products. 

Product approval processes can be easier at smaller institutions than at larger institutions. 

Smaller CRFIs may also be subject to less intense regulation compared with larger CRFIs. In 

addition, smaller CRFIs generally report the ability to be more nimble and adaptable when

creating or modifying new products for a specific asset class like PV. 
11

This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications.

3.4 PV Loan Products and Processes Vary across Institutions

Section 2.2 provides basic information about PV loan types. This subsection describes additional

PV product variations across CRFIs.

CRFIs offer PV loans via direct and indirect lending programs. In the direct model, the lending 

institution provides capital to the borrower, and the borrower is typically free to choose a PV

installer that meets minimum criteria (years in business, acceptable business ratings, applicable 

experience, etc.). Direct-lending customers are often existing members of the credit union or 

community bank or join specifically to take advantage of the loan offering. In the indirect model, 

the lending institution instead prequalifies select PV installers—typically based on requirements 

set by the institution—who can present the loan product on behalf of the institution. The indirect 

model gives the institution some control over the installation process and the borrower’s 

experience with it.

PV loan programs evolve over time. Interviewees commonly reported launching a product, 

receiving customer and installer feedback during rollout, and making product adjustments

accordingly. For example, several CRFIs adjusted to longer repayment periods or moved from a 

secured loan based on a second mortgage to a UCC-1 or unsecured loan.

PV loan products can include one or two loans per transaction. With two loans, the first amount 

is sized at approximately 30% of the PV purchase price to match the expected ITC amount, and

the second funds the balance of the purchase price. The first loan can forego interest payments

for the first 12–18 months (or the interest is paid by the installer), and the borrower can use their 

ITC benefit to pay off the zero-interest loan. The conventional second loan entails a standard 

amortization schedule (10–20-year term) and market interest rates. With one loan, for the full 

purchase price (at a set interest rate and term), the lender often offers a one-time reamortization 

for free or at a reduced rate (e.g., $100), allowing the borrower to use the ITC or other funds to 

pay down the principal. This prepayment reduces the monthly payments while maintaining the 

original loan schedule. However, in this model, the borrower pays interest on the full loan 

amount before the principal paydown, while interest is typically paid on only 70% of the full 

loan in the two-loan approach.

The other timing element in structuring a solar loan product is the disbursement schedule from 

the bank to the installer. For example, one program disburses 35% of the loan amount once the 

loan has been closed and then the final 65% after installation. Installers may prefer a more frontloaded disbursement schedule, while lenders typically prefer holding funds until after 

installation.

Loan application and closing processes also vary. Some CRFIs primarily handle customer 

applications over the phone, whereas others allow online applications through a dedicated portal 

connection. Some banks work with PV installers and developers to integrate the online portal 

into the PV sales process. Variations in closing processes include fully automated versus manual 

review and approval as well as online document signing versus finalizing loans in person at a 

branch and, in some cases, in the presence of an attorney.

Finally, options to improve loan terms vary. Attractive sales pitches can include low interest 

rates or a “no interest” period (e.g., the first year) that allow borrowers to save money 
12

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immediately instead of waiting for energy savings from PV (e.g., in the winter, when electricity 

production is lower). The no-interest period is particularly attractive in the first year, before the

loan’s principal is reduced through an ITC buydown. These practices are done per strict lending 

regulation. However, borrowers should analyze all loan conditions including interest rates, terms, 

penalties, and fees—which lenders can charge to the borrower or the PV developer, who may 

pass the fee on to the PV sales price.

3.5 UCC-1 Fixture Filing Is Useful as a Security Interest, but 

Repossessing PV Systems Is Impractical

Most CRFIs that offer a dedicated PV loan use a UCC-1 fixture filing, and many institutions

have had positive experiences with this process. Interviewees commonly described the

usefulness of the UCC-1 fixture filing not in terms of collateral recoverable via repossession, but 

rather as an indicator that the PV system has an outstanding loan to be paid, which is often 

revealed at the time of a home sale or refinancing. The UCC-1 fixture filing provides some 

protection from a loss due to loan default, even if the lender must wait an extended time 

(sometimes years for a home sale) to potentially recover some portion of the debt. UCC-1 fixture 

filing is not, however, a one-time process; lenders typically must refile every 5 years to maintain

protections.

Lenders can try to repossess PV systems, but most interviewees questioned the practicality of 

this approach for several reasons. First, CRFIs have little use for a used PV system, and—

because there is no established secondary market for used PV equipment—attempting to

liquidate a PV system might yield little return. In contrast, when a UCC-1 filing is used to secure

a loan for commercial equipment such as heavy machinery or vehicles, the repossession value is 

relatively high owing to the equipment’s mobility and the active secondary market for used 

equipment. Second, the all-in cost of a PV system (and thus the loan amount) reflects not only

the equipment cost, but also various “soft costs” related to system design, installation labor, 

permitting, customer acquisition, and so forth. Repossessing the PV equipment would not 

compensate for these soft costs. At the same time, uninstalling, storing, and selling the used PV 

equipment (while preserving the roof’s integrity) would be costly to the lender. Finally, and 

perhaps most importantly, trying to repossess PV equipment from a distressed borrower’s home

presents a risk of bad publicity.

3.6 PV Loan Repayment Has Been Strong, but Most Loans Are Young 

and Were Made to Highly Rated Borrowers

All interviewees reported positive results from their PV loan portfolios, with no portfolio-wide 

issues or systematic concerns to date and only a few repayment anomalies attributed to events 

such as divorces, bankruptcies, or deaths of the primary borrowers. Interviewees described their 

PV loans’ performance with phrases such as “pretty good overall,” “little to no losses to speak of 

but a few delinquencies,” “charge-offs remaining unbelievably low,” and “delinquencies and 
13

This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications.

losses lower than expectations.”14 Because of high repayment performance to date, many CRFIs 

will increase the volume of PV loans offered.

However, the high performance of PV loans must be qualified. First, PV loan recipients were, on 

average, considered A+ borrowers and thus were expected to pay reliably. Some interviewees

questioned whether borrowers with lower credit quality would do as well; some CRFIs are

considering expanding their PV loan offerings to borrowers with slightly lower credit quality, but

they are limited by the need for such borrowers to own homes. Second, the PV loan programs are 

generally young, and thus many loans are very early in their tenor. Many interviewees said

delinquencies or losses from comparable loan products typically peak later, perhaps between 

years 2 and 5 of the loan. Finally, because the current economy is extremely robust, the 

performance of PV loans during a downturn is uncertain. Kroll Bond Rating Agency stated in its 

rating of a securitized portfolio of residential loans from a large solar provider that, “with no 

more than 36 months of performance data [typical for most solar loan programs] ... these loans 

have not been through a full loan-cycle and therefore losses could be higher than experience to 

date suggests” (KBRA 2018).

See Section 4 for a quantitative summary of PV loan performance to date.

3.7 Relationships between PV Installers and CRFIs Can Enhance the 

Marketing of PV Loan Products 

Interviewees consistently described the critical role of PV installers in driving the demand for PV

loan products. Because, as one interviewee said, customers typically decide to install PV first

and then search for financing products, many potential customer inquiries are directed to 

installers as opposed to finance providers.

PV installers and CRFIs both market PV loan programs. Product marketing channels include

social media, newsletters, direct mailings, farmers markets, movie theater advertisements, 

coupon books, and home shows. Some interviewees described a shift in the way most loan leads 

have been generated as PV loan products have evolved. Early in the loan programs, some 

existing bank and credit union members contacted their CRFIs to finance PV. As new sales 

channels have been made, CRFIs have developed relationships with installer partners that bring 

in customers who may not have been CRFI members.

Being comfortable with installer partners is very important. Installers may have exclusive 

agreements pertaining to a CRFI’s financial product and may have online access to the loanorigination system to close the deal. A CRFI can save underwriting time, help installers 

understand and promote loan products, and mitigate technology and installer risks by pre-vetting 

PV installers and developing relationships with vetted installers in the CRFI’s service territory.

The CRFI and installer both benefit from communicating about areas of concern and teaching

each other their business languages. Although installers do not qualify borrowers, training 

enables them to speak with potential borrowers about the financial product, process, and 

 

14 Charge-offs generally refer to the situation in which a lender records a monetary loss on a loan due to nonrepayment.
14

This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications.

relationships. Alternatively, an installer may simply provide the customer with a sample of 

financial product offerings (loan brochures, etc.) to choose from.

3.8 CRFIs Are Willing to Extend PV Loans to Lower-Rated Borrowers, 

but Barriers Exist

Although to date PV loan recipients have generally had high financial qualifications,

interviewees agreed that offering loans to less highly rated customers, within reason, is desirable.

Having a more extensive and detailed national history of PV loan credit performance would help

this effort. In addition, having more granular data (e.g., at the county or state level) would likely 

be required to drive local financing decisions. The automobile industry provides a good example 

of easy access to credit data, with high regional fidelity and extensive history.

The primacy of the federal ITC as a residential PV incentive may hinder the offering of PV loans 

to customers with lower financial ratings. In many cases, low- to moderate-income customers 

may not benefit directly from a tax credit due to insufficient tax liabilities. In such cases, a TPO

arrangement rather than direct PV ownership might be more appealing because the TPO provider

can monetize the tax credit.

Naturally CRFIs want to extend loans that borrowers can repay with relative ease and 

consistency. After the recent mortgage crisis and ensuing regulations, lending institutions

assumed additional fiduciary and legal responsibility to deny loans to customers who cannot 

service them. Although many government programs target low- and moderate-income customers,

CRFIs are hesitant to push the bar too low for challenged borrowers. In any case, customers 

living paycheck to paycheck may be less interested in products like PV that offer savings over a 

15-year period or longer.

That said, PV loan approval processes are not necessarily determined by hard and fast rules tied 

to credit scores or debt-to-income ratios. Because CRFIs know their market and customer base

well, they can examine customers individually and evaluate loan products that make sense for 

the borrower and lender. Interviewees, however, did report that they frequently declined

customers based on insufficient financial qualifications.

3.9 PV Energy Savings Are Generally Given Little Weight during 

Loan-Approval Processes

Although PV owners save on utility payments, many CRFIs generally do not factor these savings

into PV loan criteria. Most financial institutions use a debt-to-income ratio to assess a borrower’s 

ability to repay debt. Taking out a PV loan increases the debt side of that ratio, while acquiring a 

PV system increases the income side (through energy savings)—yet the PV income factor is 

generally not considered during loan qualification.

Because of this practice, government policies that affect PV economics might have a muted

impact on CRFI decisions to offer a PV loan. For example, reducing PV’s economic value by 

lowering the net metering rate might reduce the demand for PV loans, but it would not directly 

change a loan’s evaluation criteria. That said, energy bill savings are sometimes factored in to

the process of deciding whether to offer a PV loan product, even if they are not formally 

included as part of the loan-approval process. CRFIs may also be more inclined to include these 
15

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savings in their analysis if they had access to widely accepted third-party guidance on the 

specifications that determine how much a PV system will reduce a customer’s electricity bill. 

This type of documentation would be particularly beneficial for banks entering the space in 

markets without significant PV deployment.

3.10 Regulations Have Not Hindered PV Loans, but Educating 

Regulators about PV May Help

Various entities regulate CRFIs, including the FDIC (which insures deposits for local and 

regional banks), the NCUA (which insures deposits for credit unions), any number of state-based 

financial regulators (particularly for CRFIs with a state charter), federal regulators (such as the 

Office of the Comptroller of the Currency), and more. Some entities may overlap, and a single 

institution may be regulated or monitored by multiple agencies.

In general, interviewees identified no significant regulatory barriers related to PV loans. 

Regulators aim to ensure that loans do not harm the safety and soundness of the institution 

(because these regulators serve as guarantors of institution deposits) and that the consumer is 

protected against predatory or discriminatory lending practices. Thus, CRFIs must demonstrate 

how PV loans fit under those requirements, for example, by demonstrating clear and fair lending 

practices, a satisfactory credit quality of the overall portfolio, appropriate disclosures that are

clear and sufficient, and that institutions are not over-weighted in any one market or customer 

segment (which can introduce portfolio-concentration risk). 

Educating regulators about PV loans can facilitate regulatory review of CRFI portfolios. Most 

interviewees agreed that regulators do not approve PV loan programs before program initiation. 

Instead, PV loans are established under the same practices and general regulations that are 

applied to all other loan types. However, regulators might review an institution’s entire loan 

portfolio annually or at other intervals, in which case it can be helpful to educate the regulators 

about the PV asset class. Some CRFIs work with outside partners to prepare for the audit 

process, which can last a week or more. In any case, product innovation outside of an industry 

standard, such as a 15-year equipment loan on PV, can happen if it fully conforms to regulations.

3.11 Challenges Remain for PV Loan Products

There are a few remaining challenges to CRFI development of PV loan products. For example,

the term of a PV loan (up to 20 years) presents long-term interest rate risk, because interest rates 

could change while the loan’s rate stays fixed. Some CRFIs are more comfortable assuming this

risk than others. Risk-mitigation measures include shorter terms, higher rates, or one-time rate 

adjustments, but these measures can make the loan less attractive to borrowers.

The lack of an established securitization market for PV loans is another challenge. Although 

some PV loans from national installers have been sold on the securities market, most CRFIs do 

not have the size or volume to sell PV loans to the securities markets. Most interviewees said

they would prefer to keep PV loans rather than sell them. However, the option to sell a portfolio 
16

This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications.

of loans to other investors could lower risks by creating more liquidity, thus putting PV loans on 

equal footing with loans for more established asset classes such as mortgages and automobiles.

15

PV loans with UCC-1 fixture filings can also entail challenges. Some lenders cannot offer such 

loans when the PV-hosting house is held in trust rather than in the borrower’s name. In addition, 

because PV loans with UCC-1 fixture filings are not as widely familiar as secured loans 

(HELOCs, second mortgages) or unsecured, personal loans, the lender’s requirements do not 

always meet the borrower’s expectations.

Finally, the lack of national and local information about PV loans makes it difficult for CRFIs to 

assess market size and the risks of starting a PV loan program. Whereas market research firms 

provide robust data for other asset classes, such as automobile loans, the smaller PV market has 

not yet stimulated the development of detailed, widely available data products.16

 

15 June 2017 guidance from the NCUA asserts that federal credit unions are authorized to issue and sell assets such 

as Ginnie Mae home mortgages, auto loans, and other assets (NCUA 2017). The practice, known as securitization, 

was not explicitly authorized for federal credit unions prior to the 2017 guidance. Securitization of assets by 

community banks is estimated at more than $28 billion in 2014 though small relative to total assets (Baily and 

Montalbano 2015). In general, securitization by CRFIs may be limited to larger institutions with asset volumes large 

enough to justify the transactional costs and expertise required. 

16 Previous NREL efforts targeted this data gap for the TPO market, but not for solar lending (NREL 2018). 
17

This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications.

4 Quantitative Indicators of PV Loan Performance 

This section provides summary statistics on PV loans made by CRFIs to complement the 

qualitative insights noted above. The data are anonymized and used to analyze loan and borrower 

characteristics as well as loan performance.

The data set contains high-level information from 6,770 loans, representing a combined PV loan 

portfolio exceeding $186 million across 22 different CRFIs. Massachusetts accounts for 57% of 

the PV loans in the data set and 67% of the loan value. These data were collected by the 

Massachusetts Clean Energy Center (MassCEC) and the Massachusetts Department of Energy 

Resources as part of the Mass Solar Loan Program (Mass Solar Loan 2018). NREL collected 

data for the remaining 43% of PV loans and 33% of loan value from individual CRFIs across the 

United States. Across the entire combined data set (6,770 loans), banks account for 32% of the 

PV loans and 38% of the loan value, and credit unions constitute the remaining 68% of PV loans 

and 62% of loan value. The loan data reflect performance through February 2018. 

These data entail several caveats. The PV loan program data were self-reported by the various 

CRFIs. Although the data were spot checked, a thorough audit to check consistency across 

institutions or for reporting accuracy was not conducted. The Mass Solar Loan Program data are

part of a state incentive program that includes a financially protective loan loss reserve fund,

which may impact lending practices such as borrower qualification and the interest rate. The 

institutions outside the Mass Solar Loan Program reported data through a standardized form, but 

each institution may collect and process their PV lending data uniquely, which could produce

subtle data differences across institutions. Thus, the data are useful for analyzing high-level 

trends. Future studies could improve the data-collection process and expand the scope of the 

analyses.

Table 2 categorizes the data by the value of each institution’s PV loan portfolio. Out of 6,770

total PV loans, 12 loans (< 0.2%) were reported as charge-offs, indicating the loan is unlikely to 

be repaid by the borrower. Hypothetically, if an average lender charged-off $15,000 for each of 

the 12 defaulted loans, the loss would represent about $26 per loan when spread across all 6,770

loans. This estimate is likely high, because some loan charge-off losses could be offset from a

claim to a loan loss reserve program or via the UCC-1 process when the home is sold or 

refinanced.

Table 2. PV Loan Sample Summary Statistics by CRFI Portfolio Size

PV loan 

portfolio

(million)

No. of 

CRFIs

Total

loans

No. of

loans

Avg.

seasoning

in 

months

FICO

≥ 720

FICO

681-

719

FICO

≤ 680

Chargeoffs

30 

days

late

60 

days

late

90 

days 

late

> $10 6 $138,699,859 4,929 12 78% 14% 8% 10 171 61 24

>$5–$10 4 $30,867,895 1,091 13 82% 11% 6% 0 4 0 0

>$1–$5 6 $13,886,826 658 14 76% 12% 11% 2 0 0 0

< $1 6 $2,851,725 92 4 88% 9% 3% 0 3 0 0

Totals 22 $186,306,305 6,770 12 178 61 24

Source: Mass Solar Loan 2018 and individual CRFI contributions
18

This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications.

There were 178 loans reported at least 30 days late, representing approximately 2.6% of the 

overall loan portfolio. Interviewees noted that short-term delinquencies can occur when 

borrowers are slow to set up automatic loan payments. Delinquencies drop substantially at the 

60- and 90-day marks.

17 According to some interviewees, loan delinquency rates may vary by 

loan “seasoning” (i.e., the time elapsed since loan closing). For example, delinquencies might be 

expected to peak at 2–5 years of seasoning according to some interviewees. As shown in Table 2

and Figure 4, most PV loans in the data set were substantially younger than 2 years. The lower 

seasoning of CRFIs with portfolios of $1 million or less compared with the rest of the institutions 

could indicate smaller institutions or relatively nascent solar loan program offerings.

Figure 4. Number of CRFI PV loans by seasoning18

Table 2 also summarizes borrower credit profiles, which are consistent across CRFIs of various 

PV loan portfolio sizes: 76%–88% of borrowers had credit scores of 720 or higher, 9%–14% had 

scores of 681–720, and 3%–11% had scores of 680 or lower. Even within the lowest credit 

category, many borrowers likely were still considered “prime”—that is, attractive enough to 

qualify for approval at relatively low interest rates. The “subprime” level typically starts around 

a 620-credit score. These statistics agree with interviewees describing typical PV borrowers with 

overall high credit quality, thus presenting less risk. The high credit quality of PV borrowers is 

 

17 Some institutions report cumulative delinquency payments (how many loans have ever been late even if they are 

now current), whereas others report point-in-time delinquency metrics (how many loans are delinquent at any given 

point in time). Thus, the delinquency data in Table 2 are likely higher than if all the reported delinquencies were 

based on point-in-time estimates, because many delinquencies are corrected over time. Conversely, the delinquency 

data in Table 2 are likely lower than they would be if each financial institution reported a cumulative metric showing 

the number of loans that have ever been delinquent during the loan’s operating period. 

18 Loan seasoning for Mass Solar Loan Program data is provided at the individual loan level, which is then averaged 

for each CRFI. Loan seasoning for CRFIs outside of the Mass Solar Loan Program is provided as a portfolio average 

for that CRFI. The number of loans shown in Figure 4 represents the total number of loans in each bin including 

both Mass Solar Loan Program and other CRFI data. 

193

3346

2384

256

591

0

500

1000

1500

2000

2500

3000

3500

4000

≤ 5 >5 to 10 >10 to 15 >15 to 20 >20

Number of Loans

Average Loan Seasoning (Months)
19

This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications.

also expected, because applicants must be homeowners and ideally have enough income to use 

the ITC effectively. Figure 5 provides a credit score summary of the total sample.

Figure 5. Credit score summary across entire sample of borrowers

8% 14% 78%

0% 20% 40% 60% 80% 100%

≤680 681-719 ≥720
20

This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications.

5 Conclusions and Future Needs

CRFIs have demonstrated the willingness and entrepreneurism to provide new loan products for 

growing distributed PV markets. Early qualitative perspectives and quantitative data suggest PV 

loans are performing very well, making expansion of loan offerings attractive for CRFIs already 

operating in this space and potentially attracting new entrants. Although most CRFI investment 

to date has targeted standalone distributed PV, other applications will likely emerge, such as 

community PV and PV coupled with battery storage.

Access to additional credit and market information is critical for accelerating the role of CRFIs 

and other financial institutions in supporting U.S. PV growth, including the following:

• Higher-fidelity PV loan performance and borrower credit data on par with the data 

readily available for other assets classes, especially improved geographic, historical, and 

borrower-classification data.

• Information on the presence of PV financing providers across different markets as well as 

detailed information on the type of financing products provided.

• Information provided through dedicated PV lending training or educational materials to 

existing and potential PV lenders, covering areas such as technical evaluation of PV 

equipment, assessment of industry risk profiles, and characterization of various PV 

financing products.

Public and private partnerships may be able to collect and disseminate such data throughout the 

United States. Working together, the industry can help existing providers grow their loan 

portfolios and reduce risks while enabling new financiers to enter the PV loan space and service 

areas where distributed PV loans can be offered widely and profitably.
21

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