Market Analysis Insights
Where is All the Utility Investment? Are Utilities Missing an Opportunity to Finance Solar and Storage?Submitted by Michael Mendelsohn on Mon, 10/14/2013 - 3:14pm
It's an exciting time for the solar industry. Deployment is up sharply—photovoltaics (PV) alone have seen 73% annual growth, on average, from 2000 through 2012, and costs are down dramatically over that same period .
Improving the availability of capital to renewable energy (RE) projects represents a critical component to lowering the overall cost and scaling the adoption of RE technologies. Public capital—investment raised in the financial markets through securitized instruments and pooled investment vehicles—is a potential means of achieving these goals.
A Transition to a Securitized Market? Perhaps Credit Enhancements Offer an Opportunity to Leverage Market InvestmentSubmitted by Michael Mendelsohn on Fri, 05/17/2013 - 9:00am
How does the solar industry transition from the current project-based financing structure to one where more capital is available at faster speed and lower cost ? That was the question discussed by various industry stakeholders in a recent meeting of the Solar Access to Public Capital (SAPC) working group convened by NREL. The answer the industry seeks might lie in public capital vehicles, such as asset-backed securities, master limited partnerships, and other mechanisms designed to pool projects and allow investment via a liquid, tradable product. These vehicles could increase the availability of capital because they represent a simpler and lower-cost mechanism for investors, such as pension and insurance funds, to commit capital to solar projects .
For developers trying to monetize the federal tax benefits for a given project, finding a tax equity partner can be a lonely process. Tax equity investors consist of a limited pool of suitors—investment bankers and a few other firms—who can tolerate the array of risks associated with this type of investment, including:
Direct ownership of solar systems offers an array of benefits generally not available to third-party finance. And new loan programs are making it easier to achieve that goal.
Renewable energy deployment has increased in recent years thanks to two primary turbo chargers: federal tax policies that incentivize investment and state renewable portfolio standards (RPS) that require utilities to procure increasing amounts of renewable energy to serve their load obligations .
How Do We Lower Solar Installation Costs and Open the Market to Securitized Portfolios: Standardize and HarmonizeSubmitted by Michael Mendelsohn on Wed, 11/07/2012 - 10:00am
Soft costs can be pretty tough. The cost of solar installations can be generally separated into "hard" costs — representing primary components such as modules, racking, inverters — and soft costs including legal, permitting, and financing.
A better (more cost effective) mousetrap? How much do U.S. tax benefits cost per kWh of solar production?Submitted by Michael Mendelsohn on Wed, 09/19/2012 - 9:00am
I frequently wonder: what is the cost to the taxpayer/ratepayer of the various benefits (federal, state, utility) bestowed on renewable energy projects, and is there a more cost-effective way to support these fledgling technologies? Also, how do U.S.
Good data can be hard to come by. Let's take solar production data. According to the Energy Information Administration (EIA), solar electricity production facilities— including photovoltaic (PV) and concentrating solar power (CSP) — produced a total of roughly 1,800 GWh in 2011 .
Will Solar Projects Need Tax Equity in the Future? Yes, but Baby Steps Toward Securitization Improve the SituationSubmitted by Michael Mendelsohn on Wed, 04/18/2012 - 9:00am
I've written in various places about the need for tax equity to finance renewable energy projects—particularly solar. I was under the assumption that tax equity may be a thing of the past. Now, I'm not so sure. You may know that the investment tax credit (ITC) declines from 30% to 10% of eligible capital costs in 2017.