Solar Loan Index: December 2022

December remittance reports showed mixed credit performance across securitized solar loan pools during the November collection period. KBRA’s Solar Loan Index posted annualized net losses of 1.19% for the month, down 9 basis points (bps) versus November’s reading, but up 55 bps compared to year-ago levels. Meanwhile, early- (30-59 days) and late-stage (60-119 days) delinquencies came in at 0.53% and 0.41%, respectively, 8 bps and 6 bps higher month-over-month (MoM) and 20 bps and 9 bps higher year-over-year (YoY) (see Figure 2). On a seasonal basis, annualized net losses remain in line with previous years; however, early- and late-stage delinquency rates are now at or above pre-pandemic levels (see Figures 4-6).

Solar loan prepayment rates continued to trend down, reaching a new low of 5.63%¹ during the month (see Figure 3 and Figure 7). The decline in solar loan prepayments was likely driven by the relatively low interest rates available for this…