The collapse of Silicon Valley Bank (SVB) is generating questions about the viability of the clean energy companies it financed, as the bank had long been a favorite of renewable startups because of its understanding of the clean tech marketplace and clean tech-focused financing tools. The bank had self-purportedly funded 62 percent of U.S. community-solar projects as of a year ago, and several major companies are still looking to find new lines of credit in wake of the bank’s failure.
Many companies have remained unscathed though, saying that they had either little exposure to SVB or were reassured by the federal government’s promises to make them whole. The Federal Reserve is funding other banks to avoid a series of bank failures, and President Biden sought to comfort investors saying in a statement that “small businesses across the country that deposit accounts in these banks can breathe easier knowing they can pay their workers and pay their bills. And their hard working employees can breathe easier as well.” However, CEO Kiran Bhatraju of Arcadia – the largest domestic producer of community solar – told Utility Dive the bank’s collapse will “have an impact on the broader industry.”
Clean technology industry analysts think there are enough remaining banks and credit lines to help companies that were relying on SVB from going under.
“We believe … demand from major financial institutions for exposure to both residential and utility-scale solar will be able to fill the void in lending facilities, particularly on the heels of the [Inflation Reduction Act],” analysts at Scotiabank told clients.
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