NextGen Energy Finance
NextGen Energy Finance panel with Dan Pillemer, President of CardWorks; Billy Parish, CEO of Mosaic; Scott Harmon, CEO of Noesis; Connie Chern, Director of Financial Platform Opertions of SolarCity; and Graham Smith, Founder of Open Energy Group.
This panel consisted of CardWorks, Mosiac, Noesis, Open Energy Group, SolarCity, and was moderated by Morgan Stanley. The energy finance market includes three types of loans: commercial unsecured, consumer unsecured and asset-backed loans. SolarCity bonds are available to institutional and retail investors and they typically like to retain the assets on their balance sheet. Mosiac is focused on the residential solar sector, which is a $9 Billion financing market growing at 60% per year. Open Energy Group is focused on the commercial sector, which is growing at 30-60% annually. The financing market will be $50 Billion by 2020.
Noesis is focused on energy efficiency. The market for equipment sales is currently $30 Billion a year. CardWorks looks at solar lending, solar leasing, and energy efficiency lending. Public policy is important in this sector (for example, there’s a 30% tax credit that’s expected to go down to 10% in 2016). As for why online marketplace lenders might not compete in this space, deal sourcing and underwriting are very specific skills in this space. Also, this business has prime borrowers and thus is all about low cost of capital, which banks have an advantage in.