Macquarie moves into solar finance market

Australia’s leading investment bank has entered the solar financing market, in what is likely to boost the rooftop and commercial solar industry.

Macquarie Group’s operational briefing, which was released in February, reveals the company “recently commenced financing of solar in Australia”. The news follows the group’s investment overseas, including in the UK where involvement with residential solar company Freetricity has been credited with reviving the region’s solar market.

According to RenewEconomy journalist Giles Parkinson, it is generally acknowledged in the Australian solar industry the next major breakthrough in the market will be in finance.

“Financing is a critical component of the cost of solar. If major banks such as Macquarie enter the market and are followed by the ‘big four’ – as many say they are poised to do – then the cost of capital is likely to reduce significantly. So far, only smaller and niche financing houses – as well as private investors – have provided finance to rooftops solar,” Mr Parkinson said.

Last year, UK public housing contractor Herbert T Forrest, received up to £120 million (AUD$197 million) from Macquaire Bank to fund solar-power installations across Britain, targeting low-income homeowners and social housing tenants. The company will use the funds across three years to install panels on residential rooftops at no upfront cost for customers.

The group also recently set up a joint venture with Tokyo-based building construction corporation Maeda Corporation to develop clean energy, with a focus on large-scale solar projects, throughout Japan. The two parties are targeting 300MW of generation capacity and investment of ¥100 billion (AUD$1 billion) in renewable energy businesses in the first three years.