In part I of this series, we talked about how it is now more important than ever for solar companies to position themselves to leverage new opportunities for capital. The companies that are best able to efficiently deploy capital, close deals, and return cash flow to investors will win the fight for capital.
As discussed in part I, yieldcos represent the best current opportunity for low-cost capital. However, new opportunities lie on the horizon. Perhaps one of the most exciting is the real estate investment trust. Long used as a way to raise capital in the real estate industry, REITs are gaining steam as renewable energy capital mechanisms.
What is a REIT?
A REIT is a type of company that invests primarily in real estate for the purpose of distributing income back to its owners. REITS were created by Congress in 1960 to encourage large-scale investments in commercial and income generating properties. Today, all REITS either invest in or manage real estate or invest in or underwrite mortgages for people to buy real estate.