ABS photovoltaic panels

What is a solar ABS rating?

Solar ABS ratings reflect the positive attributes of solar receivables. Obligors are homeowners with average FICO scores well above 700. Tax credits can materially subsidize borrower costs, and federal policy in support of solar energy is established and growing.

Is solar ABS a good investment?

Additionally, the growing awareness and affordability of solar power has allowed solar ABS issuers to reassign solar contracts upon a house sale to the new owners, with little to no loss of expected cash flow. Potentially attractive investment opportunities Solar ABS can offer an attractive risk/reward profile for fixed income investors.

Is solar ABS a green securitization?

Fitch expects an increasing number of residential solar originations and, consequently, solar ABS, in line with more global green securitizations as discussed in our Green Securitisation: Development and Challenges report.

Is solar ABS a reliable source of debt financing?

Solar ABS continues to establish itself as a reliable source of debt financing for the residential solar industry. 25 precedent Solar ABS transactions have been successfully closed since 2013, for an aggregate issuance volume of over $4.9BN across offerings of different sizes, tenors and ratings. Market highlights include:

How is solar ABS collateralized?

Solar ABS are collateralized by the underlying PV systems, with credit enhancement consisting of (i) overcollateralization, (ii) subordinate bonds, (iii) general reserve account, (iv) inverter replacement reserve account, and (v) excess spread.

Can solar ABS be considered for green certification?

Solar ABS can be considered for green certification as the underlying assets securitized contribute to climate change mitigation. Obtaining a green rating label opens access to a broader investor base including investors with sustainable investment mandates.