Mitigating global climate change requires an accelarated adoption of carbon neutral electricity production technologies. Solar photovoltaic electricity generation has the potential to contribute greatly to this effort, so facilitating its adoption is of utmost importance. The literature has prosposed to securitize solar assets as one powerful way of doing so and first securitizations of residential and commerical solar facilities have already been introduced to the market. However, global uptake of this new method of financing is still slow, due to lacking standardization of the assets and the securities themselves, legal frameworks and valuation frameworks. This work addresses the research gap in valuation methods by combining the valuation for power purchase agreements and the finance-mathematical models for collateralized debt obligations. We provide an end to end valuation framework for securitized solar power purchase agreements that is easily adaptable to individual security structurings. This framework is applied to data of Australian residential photovoltaic installations proving the financial viability of the concept. We find that securitizing residential solar PPAs in Australia is profitable for the customers, installation companies, intermediaries and investors, alike. Hence, we conclude that this approach has the potential to fuel solar uptake around the world with the enormous supply of capital managed by institutional investors.      «

Mitigating global climate change requires an accelarated adoption of carbon neutral electricity production technologies. Solar photovoltaic electricity generation has the potential to contribute greatly to this effort, so facilitating its adoption is of utmost importance. The literature has prosposed to securitize solar assets as one powerful way of doing so and first securitizations of residential and commerical solar facilities have already been introduced to the market. However, global uptake...     »