FinTech/ESG: Solar Financier Loanpal Ties Up With Blackstone for $300M of Solar Loans

Blackstone will invest $300 million through GSO Capital in solar loans originating on Loanpal’s platform.

Loanpal, the fintech that is a market leader in financing of residential solar installations, announced Thursday that Blackstone (NYSE: BX) had committed to invest $300 million in solar loans originating on its platform. (CROWDFUND INSIDER)

The amount committed will enable 10,000 homeowners to finance their solar systems, thereby reducing their homes’ carbon footprint.

Loanpal solar loans

Loanpal offers instant residential solar loans through its technology-enabled loan platform. Over 130,000 customers have deployed solar at their homes using Loanpal funding aggregating $4 billion. These installations generate over  1 Tera Watt Hour of carbon-free energy per year.

In turn, Loanpal’s high-quality borrowers attract funding on the platform from financial institutions.

“Our investment will enable Loanpal to continue to expand throughout the United States, and we believe represents an attractive opportunity for our investors to earn compelling risk-adjusted returns and invest in the growing demand for renewable energy,” said Rob Camacho, Senior Managing Director and Co-Head of GSO’s Structured Products group, and Rob Horn, Senior Managing Director and Co-Head of GSO’s Energy group.

Climate change

“To solve Climate Change we need to deploy 10 trillion dollars in the US to replace fossil fuel sources of energy,” said Tanguy Serra, President and Chief Investment Officer at Loanpal. “As opposed to fossil fuel-based energy, renewable power has no feedstock and no ongoing costs so all that matters are the upfront capital expense and solving for scale deployment. As one of the largest asset managers in the world, Blackstone is an ideal partner for Loanpal. Climate Change will get solved by deploying billions of dollars per month at stable returns over the next decade.”

COVID-19 to affect the solar market

A report by Wood Mackenzie says, however, that residential solar finance in 2020 will not enjoy the kind of growth rates seen in 2019 – primarily due to the COVID-19 pandemic.

Wood Mackenzie said loan defaults were yet not a concern, though the real picture will emerge once the pandemic-related support measures from the government wind down.

However, of worry is the likelihood that solar installers may go out of business resulting in a fall in loan volumes.

Wood Mackenzie has reduced its 2020 and 2021 U.S. residential solar forecast by 31 percent and 26 percent, respectively, due to the economic impacts caused by the virus.

The report said that Loanpal retained the top spot in solar financing in 2019, however.

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