Debt capital raises are expected to rise by ~4X y/y in 2023, with the lending arms of PE firms such as KKR, Hannon Amstrong, Blackstone and Brookfield backing customer financing programs of installers such as Sunnova Energy, Sunrun and SunPower. Meanwhile, equity raises are also expected to increase significantly as firms with proprietary technology solutions scale-up to capture a larger market share of this booming segment.
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Efforts to curb power bills, IRA tax credits are increasing adoption of distributed systems, spurring investor interest. The 30% federal tax credits offered under the IRA has cut the cost of installations, with an average residential system witnessing up to 30% cut, or ~$7,500, while saving ~$9,000 in electricity bills over its lifetime. Additionally, availability of flexible and low-cost financing as well as option to participate in net metering programs will also incentivize the adoption of distributed systems in order to hedge high power prices.