Under a cloud

The US residential solar market has weakened sharply, moving from years of growth into a clear contraction as installations fall and policy support fades.

For investors, the biggest concern is not just lower demand, but the strain this puts on solar ABS credit quality, especially after major sponsor bankruptcies reduced issuance capacity and exposed servicing and operational risks.

A few seasoned portfolios can still attract capital, but those deals look more like exceptions than signs of a broad recovery.

With limited policy relief in sight and liquidity remaining thin, solar ABS currently appears less attractive than other areas of structured finance on a risk-adjusted basis.