Achieving greater SWH market growth will require increased access to low-cost private-sector capital, which can fuel large-scale international market expansion. This, in turn, will require the creation or expansion of financing and business models that address persistent SWH market risks and barriers – including high upfront costs as well as real or perceived technology, design, operational, and maintenance risks. Policymakers and industry leaders have a role to play in creating the business and policy structures necessary for success.
This report focuses on the need for both “enabling policies” and “financial de-risking instruments,” which are essential to fostering creation of business and financing models that can attract investors and scale the Solar Water Heating (SWH) market. Enabling policies includes a variety of public and private initiatives that mitigate market barriers such as incentive programs, government regulations, and education and training programs.
Financial de-risking instruments – the main focus of this report – transfer or shift SWH investment risks to parties that are best suited to manage them. Examples include credit enhancements, financial or insurance contracts, as well as customer origination and servicing agreements. This report describes a set of examples and analyses where financial de-risking instruments have been successfully used by policy makers, financial professionals, and industry leaders in order to build the SWH market in developing countries.
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