The residential solar sector is getting an infusion of securitization funding, as Enpal, a Berlin-based provider of residential energy systems, partners with M&G, an investment manager from the U.K., to launch a warehouse facility.
The joint EUR 700 million ($815.8 million) warehouse facility for residential solar and heat pump loans get support from a group of leading banks, including
Lenders have already provided $697.1 million in financing to Enpal's customers, which can rent or buy the solar and heating systems. The systems include solar panels, electric vehicle chargers, battery storage, smart meters and heat pumps, according to Enpal.
The joint warehouse facility suggests Enpal and M&G are teeing up a consistent securitization program.
"This new structure enables us to scale even more capital efficiently," according to a statement from Enpal co-founder and chief financial officer Viktor Wingert, adding the arrangement lets Enpal bring "modern energy solutions to thousands of households without high upfront costs."
In a broader industry context, Enpal and M&G's move comes at a complex moment for securitizations backed by energy infrastructure and home efficiency equipment, according to early feedback from the ABS East industry conference underway in Miami.
"Home improvement ABS has taken center stage as solar ABS issuance has waned," Kroll Bond Rating Agency said. In the U.S., a spate of issuer bankruptcies, expiring investment tax credit, and rising energy bills have dimmed the lights on solar ABS. Heat pumps, energy efficient windows and HVAC systems, however, are thriving as consumers upgrade their homes, KBRA said.
Issues around the solar market seem to have impacted Enpal to a smaller degree, however, with its more diverse business lines and its European market.
"Our partnership with M&G, has become a cornerstone of our refinancing engine," said Gregor Burkart, senior vice president of asset financing.
