While underwriting of residential solar is based on the homeowner’s FICO score, and the utilities and large companies—such as Google and Wal-Mart—that purchase utility-scale power have ratings from the likes of Moody’s or Standard & Poor’s, there is no such system for small commercial entities. So Sunwealth developed its own underwriting process to assure the credit worthiness of its customers. And by pooling small commercial projects together and standardizing documentation, the firm reduces transaction costs enough to make financing these deals attractive.
Sunwealth retains a piece of each project and has structured the fund so that investors are paid out first. “So we are highly incentivised to choose the best projects,” Dings says. “We are eating our own cooking.”