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Leasing of Solar Energy Equipment

By Ellen Friedman, David Graybeal and William O'Brien
July 30, 2008

For traditional institutional equity investors in leveraged and single-investor equipment lease transactions, solar equipment may offer an attractive investment opportunity. Leasing solar equipment may also provide an attractive investment structure for traditional investors in power projects looking to expand investments in renewable energy projects.

The most attractive features of a lease structure to many investors are acquiring sole ownership of the asset and a hell or high water obligation of the lessee to make fixed rental payments. This fixed income stream also facilitates leveraging ownership of the asset by pledging the lease stream to a lender in cases where the economics of the investment are enhanced through leverage.

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