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Awardee Name: Certain Solar
Project Title: Next Generation Solar Finance
Funding Opportunity: SunShot Technology to Market (Incubator 10)
SunShot Subprogram: Technology to Market
Location: Boston, Massachusetts
Amount Awarded: $490,390
Awardee Cost Share: $122,600
Project Investigator: Adam B. Cohen
Certain Solar applies big data analytics, behavioral economics, and modern portfolio theory to reduce solar soft costs and improve solar bankability. Through its SunShot Incubator award, Certain Solar is developing a first-of-its-kind finance technology that quantifies and forecasts risks stemming from uncertainty in future energy prices. Certain Solar will create a new method for allocating financial risks and will demonstrate this technology through a pilot project.
Solar panels on residential rooftop, battery banks in basements, and energy-efficiency retrofits are all require upfront capital investments that will be paid back over time. While it is understood that these energy efficiency improvements will use less power from the grid, their future energy savings are uncertain. This uncertainty about future energy savings and future energy prices makes long-term financing of distributed energy projects a complicated process for both consumers and investors. Certain Solar’s project aims to quantify these risks and is pilot testing a new approach that better allocates energy finance risks to investors with matching risk tolerances.
Future energy prices are uncertain. Certain Solar develops cleantech financing that accounts for price uncertainty, making going solar a smarter and simpler choice for more Americans.
Solar finance innovations – such as power-purchase agreements and leases – have fueled the rapid diffusion of rooftop solar, reduced finance and customer acquisition soft costs, and brought substantial new sources of capital into the energy marketplace. Certain Solar is creating a data engine and new financial models that embed and reduce energy pricing risks. This project will help mitigate financial risks associated with solar projects that use future energy prices, making financial transactions more efficient and reducing soft costs.