Renewable Energy Project Finance Feed Renewable Energy Project Finance RSS Feed en Insights into PV LCOE Through a New Degradation Study <div class="field field-type-text field-field-blog-ss-title"> <div class="field-items"> <div class="field-item odd"> Insights into PV LCOE </div> </div> </div> <div class="field field-type-text field-field-blog-ss-teaser"> <div class="field-items"> <div class="field-item odd"> Solar photovoltaic (PV) module and system degradation continues to be an important and unresolved variable in the PV industry. </div> </div> </div> <p>Solar photovoltaic (PV) module and system degradation continues to be an important and unresolved variable in the PV industry.<sup><a href="#references">1</a></sup> One of the principal uses for degradation data in the calculation of levelized cost of energy (LCOE) calculation&mdash;a metric used by actors across the PV value chain for decision-making purposes (e.g. benchmarking PV against other sources of generation, and setting power purchase agreement [PPA] rates). One of the most common ways to input degradation in an LCOE model is via a flat rate (0.5%/year is a typical default value), which discounts the nameplate capacity cumulatively each year of project life. However, the available degradation data do not necessarily privilege such an approach, and this begs the question: is the industry standard for degradation accounting in project finance models delivering the most accurate LCOE?</p> <p>A new journal article produced by the National Renewable Energy Laboratory with the Colorado School of Mines and DNV GL offers some perspective on this question. The article&mdash;&quot;<a href="">Compendium of Photovoltaic Degradation Rates</a>,&quot; published in Progress in PV&mdash;is an update on degradation research that has been ongoing for several years (a summary of the article will be available in a forthcoming post). But in the appendix, the authors introduce the concept of the &quot;degradation curve,&quot; the shape of the decline in panel performance over time and its potential effects on solar LCOE. Traditional degradation rate modeling assumes a linear curve over time, with the same chunk of energy loss occurring year after year, in stepwise fashion. But what if the curve were not linear? What if it were exponential or stepwise? Moreover, what if the assumption that the nameplate capacity serves as the baseline for the degradation rate is problematic? Perhaps it would be appropriate to discount the nameplate&mdash;say 5% because of consistently occurring losses from, say, manufacturing defects or workmanship flaws&mdash;and base the degradation rate and curve off of that figure?</p> <p>In an appendix to the article, the authors detail the results of a Monte Carlo analysis they conducted to study the effect of various degradation rates, curves, and baselines on the LCOE for a 100-kW plant in Colorado. The four scenarios were:</p> <ul> <li>Linear degradation at 0.5%/yr of nameplate capacity (this represents a sort of industry &quot;standard&quot;)</li> <li>Exponential degradation</li> <li>2-step degradation, where performance remains flat until year 12 and then drops off linearly</li> <li>Linear degradation at 0.16%/yr of 90% of the nameplate capacity</li> </ul> <p>Figure 1 displays each of these curves, illustrating their effect on nameplate capacity over time. Note, the curves all meet at the same point by year 25 (at around 87% of nameplate capacity).</p> <div style="width:786px; margin:1em auto;"><img alt="" src="/finance/files/blog/20160706-graph1.png" width="786" height="600" /><br /> <p class="caption">Figure 1. Different degradation rate input curves as a function of time. Linear degradation at a rate of 0.5%/year (red circles), an exponential decline (blue diamonds), a two-step profile (green crosses) and a linear decline (orange crosses) starting at 90% of nameplate rating are shown.</p> </div> <p>Figure 2 shows the most important factors affecting LCOE in a sensitivity analysis. The point at which the curves converge in each degradation scenario represents the analysis mean, or the most likely cost of energy given those particular degradation conditions. Two-step degradation (the green curve in Figure 1) produced the lowest LCOE at 10.2&cent;/kWh, with the standard 0.5% linear curve coming in second at 10.5&cent;/kWh. The most significant factors in the analysis are the discount rate and the initial cost, assumed to have an average of $1.60/W for a 100-kW utility-scale installation.</p> <div style="width:699px; margin:1em auto;"><img alt="" src="/finance/files/blog/20160706-graph2.png" width="699" height="600" /><br /> <p class="caption">Figure 2. Spider plot of the impact of all input parameters on LCOE. The four different compartments represent the four different degradation curves that are labeled on top. In addition, the mean for each compartment is given.</p> </div> <p>These plots raise a host of questions: How would stakeholders in the PV value chain be affected if field experience tells us that degradation behaves, say, more exponentially than linearly? Will solar project sponsors experience compressed margins as their production falls out of line with anticipated levels and their per-kilowatt-hour revenue is not sized to cover the gap? Will manufacturers have to alter their warranties, insurance coverage, marketing, etc.? Will operations and maintenance service providers retool their scopes and cost structures? Will lenders and other financiers reconcile a variety of degradation rates, curves, and baselines and size their investments accordingly (similar to the way lenders base debt size on a spread of exceedance probabilities)? In the competitive power business, a delta of 0.8&cent;/kWh&mdash;as shown between the highest and lowest cost scenario means in Figure 2&mdash;could make the difference between a winning bid and a losing bid in a market where cheap gas is on the margin.</p> <p>While this analysis may offer more by way of questions than answers, the questions are provocative and present something of a challenge to conventional practice of PV project modeling. The linear method of calculating the effects of degradation may provide a reasonable initial approximation of LCOE, but how should alternative methods be accounted for? And, as we learn more about how PV generators actually perform and degrade over time, will compensation rates for those generators change accordingly? Accommodating such changes could entail several shifts within the PV value chain. More data are needed before any such shifts would be required, but it is something the industry want to have on their radar.</p> <p style="margin-top:50px; font-size:90%;" id="references"><sup>1</sup><em>The impacts from degradation in larger PV systems have been somewhat mitigated in recent years as installers increasingly oversize the DC side. This means that the inverters (and not the module capacity) limit output&mdash;a practice known as &quot;clipping.&quot; With a system overbuild on the DC side, the effects of degradation are masked (because there is additional backup capacity compared to a 1:1 DC to AC build) though it does not affect the degradation rate.</em></p> Wed, 06 Jul 2016 17:00:53 +0000 Editor 4132 at Put a Fence around It: Project Finance Explained <div class="field field-type-text field-field-blog-ss-title"> <div class="field-items"> <div class="field-item odd"> Project Finance Explained </div> </div> </div> <div class="field field-type-text field-field-blog-ss-teaser"> <div class="field-items"> <div class="field-item odd"> Project Finance is a commonly used financing structure for large infrastructure projects... </div> </div> </div> <p>Project Finance is a commonly used financing structure for large infrastructure projects which offers companies and investors many benefits over traditional corporate finance. While it has certain limitations and requirements, project finance can be used to raise a large amount of funds in an efficient manner. Renewable energy projects in the U.S. are often well suited to fit within these requirements and this structure has been used to raise over $100B to deploy tens of gigawatts of systems across the country.</p> <p>In traditional corporate finance a company can raise capital by offering an equity ownership stake in the company itself &ndash; and a claim to any distribution of cash the company may make. A company can also raise corporate debt, providing interest payments and a claim to the company&rsquo;s assets should a default occur. To assess these investment opportunities equity and debt holders look to the health of that company and its ability to generate a return. Project finance, on the other hand, is a method in which a company, often referred to as a project sponsor, raises capital through a special purpose vehicle (SPV)&mdash;essentially a &ldquo;shell&rdquo; holding company&mdash; and equity and debt holders rely on the cash flows of the assets in this entity to recover their investment. The SPV is owned by the project sponsor and other investors, all of which in turn own the project.</p> <p><img height="429" width="450" alt="" src="/finance/files/resize/blog/Project-Finance-Explained-450x429.png" /><img height="431" width="450" alt="" src="/finance/files/resize/blog/Corporate-Finance-450x431.png" /></p> <h2>Advantages to Project Sponsor</h2> <p>Project finance offers many advantages over traditional corporate finance. First, project finance greatly minimizes risk to the project sponsor, as compared to traditional corporate finance, because any investor can only rely on the SPV and its assets for repayment in the case of default or dissolution. This is known as &ldquo;non-recourse&rdquo; financing. Secondly, SPV&rsquo;s can potentially raise less expensive capital by separating the riskiness of a project sponsor from that of a project. If the risk of a project is less than that of the overall risk of the project sponsor, investors may be willing to accept a lower return. This is often true for renewable energy developers which act as project sponsors because project development is riskier than project operation.</p> <p>Another reason a project sponsor may want to use non-recourse financing is because debt can be raised at the SPV level (i.e. not the corporate level) and therefore it can have a significantly smaller effect on that company&rsquo;s balance sheet and therefore financial health.</p> <p>SPVs also have the potential to offer more flexibility in how a financial arrangement is structured, particularly in financing renewable energy projects. In many cases renewable energy projects generate a significant amount of tax benefits, in the form of tax credits and deductions (i.e. capital expenses depreciated at an accelerated rate). Many project sponsors cannot efficiently utilize these benefits, but SPV&rsquo;s allow project sponsors to partner with other investors (called &ldquo;tax-equity&rdquo; investors) to efficiently use these benefits (see: Feldman and Bolinger (2016) for further information on the various types of financing structures involving tax benefits).</p> <p>Project finance expands the potential investor pool to other sources as well. Recently, project sponsors have developed new investment products for renewable energy projects that share many of the attributes of traditional project finance but at a larger scale. These products include &ldquo;yieldcos&rdquo; and asset backed securities (ABS) (for further information on these structures please see Feldman and Bolinger (2016)). Each of these financing options has its particular limitations, however bringing in other sources of capital allows sponsor equity providers to focus more of their capital on growing their core business rather than being tied up in projects.</p> <h2>Advantages to Other Equity &amp; Debt Providers</h2> <p>When a project has a long-term offtake agreement with a highly creditworthy institution, investors in a project receive guaranteed, long-term benefits directly, without getting mixed into a large corporate balance sheet. This is particularly beneficial for senior secured lenders which have first rights to any cash generated from the project. &nbsp;&nbsp;</p> <p>Additionally, in the case of tax-equity investors, many of the tax benefits accrue to the project independent of other risks, such as the financial strength of the offtaker or project sponsor, or the performance of the system (except in the case of the production tax credit). Tax equity also does not typically make an investment until the project is operational, and therefore does not have any construction risk as well. This means that as long as there is not a change in ownership during the period when the tax credits are vesting (5 years for the ITC), tax equity will earn a significant portion of their return without too much project-level risk exposure.</p> <h2>Not every project is suitable for project finance</h2> <p>While project finance arrangements can be economically beneficial they do take considerable effort to set up; this is particularly true for first-time project sponsors or technologies, and for non-standardized transactions. Additionally, due to the various investors and corporate entities, there are greater disclosure and reporting requirements than traditional corporate finance. Large projects are typically the only ones able to bear the fixed costs associated with setting up project finance legal structures and agreements between parties.</p> <p>Additionally, because investors are reliant solely on the project for their return, they require a project to have a low level of risk. In order to manage risks renewable energy projects typically contract cash flows with energy offtake agreement, often referred to as a power purchase agreement (PPA). Under a PPA the SPV sells the output from the project to an offtaker, which is obligated to purchase the output of the project for a defined period of time at a specified price. Offtake agreements remove price risk and the risk of finding a buyer, depending instead on the reliability of a project and the credit strength of an offtaker; project finance is only used when both are strong.</p> <h2>Management of Risk by Equity &amp; Debt Providers</h2> <p>In order to validate the low levels of project risk, equity and debt provider typically perform a large amount of due diligence so they can better understand the risks associated with a project. Standardized documents and operating procedures and independent project evaluation can minimize transaction times and create more transparency. Due to the various parties involved in a project finance transaction a key risk mitigation strategy is properly structuring each contractual agreement between participants.</p> <p>One of the critical elements in contract structure is determining investor seniority to a project&rsquo;s cash flows. The higher the seniority, the less risk one has in a project. Lenders almost always have the first claim on cash flows, followed by tax equity investors, and then project sponsors. Some tax equity investors will not enter a transaction and many require a return several hundred basis point higher if there is project debt, and thus they are put in second position (Martin 2015).</p> <p>Another important aspect in structuring a contract is instituting change control processes, which require investor and/or lender approval to make any changes to a project over the course of construction and completion. Equity and debt providers can also require achieved project milestones before releasing any funds to a project. In fact, construction financing for renewable energy projects is often separate and distinct from term project finance, as some investors will only enter a transaction when a project is operational.</p> <p>Equity and debt providers can also manage risk through project diversification. For example, distributed PV projects are often aggregated together in &ldquo;warehouse facilities&rdquo; and sold as a bundle to investors. In this way, investors do not rely on the creditworthiness of one offtaker, but on a diversified group.</p> <h2>Considerations</h2> <p>Project finance allows companies to minimize corporate risk, achieve lower rates of return by separating project risk from corporate, access a broader array of investors, utilize tax benefits more efficiently, and keep a significant amount of liabilities off of a corporate balance sheet. While there are certain restrictions which may limit the type of projects which can utilize project finance, it is highly suitable for many large-scale infrastructure projects, and has been pivotal for the record levels of renewables deployed over the last decade.</p> <p>For further reading on this topic, please see the following resources:</p> <ul> <li>Comer, Bruce. 1996. &ldquo;Project Finance Teaching Note: FNCE 208/731 Fall 1996 Professor Gordon M. Bodnar.&rdquo; The Warton School. <a href=""></a></li> <li>Feldman, David, and Mark Bolinger. 2016. <em>On the Path to SunShot: Emerging Opportunities and Challenges in Financing Solar</em>. Golden, CO: National Renewable Energy Laboratory. NREL/TP-6A20-65638. <a href=""></a>(forthcoming)</li> <li>Groobey, Chris, John Pierce, Michael Faber, and Greg Broome. 2010. &ldquo;Project Finance Primer for Renewable Energy and Clean Tech Projects.&rdquo; Wilson, Sonsini, Goodrich &amp; Rosati. <a href=""></a></li> <li><span style="font-family:calibri; font-size:11.0pt">Martin, Keith. 2015. &ldquo;Solar Tax Equity Market: State of Play.&rdquo; <em>Chadbourne &amp; Parke Project Finance News</em> (May 2015).</span></li> <li>Public-Private Partnership Infrastructure Resource Center. <a href=""></a></li> </ul> Mon, 29 Feb 2016 23:30:30 +0000 David Feldman 4131 at A Peek into YieldCo’s Relative Cost of Capital: An Analysis of a Recent Transaction <div class="field field-type-text field-field-blog-ss-title"> <div class="field-items"> <div class="field-item odd"> YieldCo’s True Cost of Capital </div> </div> </div> <div class="field field-type-text field-field-blog-ss-teaser"> <div class="field-items"> <div class="field-item odd"> Analysis from a recent transaction provides valuable insight. </div> </div> </div> <p><em><strong>By Lang Reynolds</strong></em></p> <p>YieldCos represent a surging trend in renewable energy finance and a valuable innovation to access relatively low-cost capital for the right players. Along with securitization and other financial innovations, YieldCos represent a critical pathway to support renewable energy project deployment and market growth past incentive expirations.</p> <p>The general purpose of a YieldCo is to lower the cost of finance through a specialized investment. By 1) transferring the project off balance sheet, and 2) refinancing the project at a lower cost of capital, sponsors can free up more capital with which to deploy more projects, and sell the energy for a competitive price. Importantly, YieldCos are generally affiliated with a parent company (i.e., a developer or asset investor), but represent a separate investment mechanism.</p> <p>However, exactly how (or even if) currently operating YieldCos are achieving this low cost of capital relative to their parent companies has not been entirely transparent. Luckily, NRG Yield's (NYLD) purchase of the Alta Wind facility last summer offers just enough transparency to suggest that, at least in this particular transaction, the YieldCo does appear to enjoy a lower cost of capital than its parent company, NRG. This article will walk through some back-of-the envelope calculations pertinent to the transaction to illustrate how this works.</p> <h2>The Transaction</h2> <p>On June 4th, 2014, NYLD announced the purchase of Alta Wind from Terra-Gen Power LLC. With a capacity of 947 MW, this wind facility in Tehachapi, California is the largest in North America [<a href="#references">2</a>]. &nbsp;NYLD has a right of first offer (ROFO) to procure &quot;drop-down transactions&quot; from NRG's development portfolio. And although other assets were procured thru the ROFO prior to the Alta Wind deal, this was the first renewable energy asset in the YieldCo marketplace with publicly-disclosed terms. The table below describes key terms of the Alta Wind transaction.</p> <table cellspacing="0" cellpadding="3" class="data"> <tbody> <tr style="background-color:#036; color:#fff;"> <td colspan="2"><strong>Alta Wind &mdash; Transaction Overview</strong></td> </tr> <tr> <th style="text-align:left; font-weight:normal;">Developer/Operator</th> <td>Terra-Gen Power LLC</td> </tr> <tr class="gray"> <th style="text-align:left; font-weight:normal;">Purchaser</th> <td>NRG Yield, Inc</td> </tr> <tr> <th style="text-align:left; font-weight:normal;">Nameplate Capacity</th> <td>947 MW</td> </tr> <tr class="gray"> <th style="text-align:left; font-weight:normal;">Power Purchase Agreement Counterparty</th> <td>Southern California Edison</td> </tr> <tr> <th style="text-align:left; font-weight:normal;">Weighted Average Contract Life</th> <td>22 Years</td> </tr> <tr class="gray"> <th style="text-align:left; font-weight:normal;">Purchase Price</th> <td>$870MM + $1,600MM Assumption of Debt</td> </tr> <tr> <td colspan="2"><span style="font-size:.8em; font-style:italic;">Source: [<a href="#references">3</a>], [<a href="#references">4</a>]</span></td> </tr> </tbody> </table> <p>Completed on August 12, 2014, the Alta acquisition was funded through a 50/50 split of equity and debt. For the equity, NYLD closed a common stock offering for net proceeds of $630 million, $442 million of which were slated for the Alta purchase. For the debt, NYLD issued $500 million in senior unsecured notes due in 2024 with a coupon rate of 5.375%. Note: This debt issuance was increased by $100 million and underwriters of the equity offering exercised their option to purchase an additional 1.58 million shares, reflecting strong demand for both capital offerings [<a href="#references">4</a>],[<a href="#references">5</a>].</p> <h2>Cost of Capital Analysis</h2> <p>Now let's look at exactly how the Alta Wind transaction illustrates the difference between NYLD's cost of capital and that of its parent company, NRG.</p> <p>We'll start with the equity. Hypothetically, if two companies are making the same acquisition at the same purchase price, the one with a higher equity valuation (i.e. the stock price) would enjoy a lower cost of equity. That is, a higher equity valuation allows a company to issue fewer shares, thereby reducing any dilution of distributions per share. In the case of the Alta Wind transaction, NYLD's equity value rose over 100% from its IPO up to the purchase announcement, resulting in a significantly higher valuation relative to its parent, NRG. At the time of the transaction, investors valued NYLD equity at almost twice the EBITDA (earnings before interest, taxes, depreciation, and amortization) of NRG over the six months prior to the equity offering. This suggests that NYLD enjoyed, at the time, cost of equity advantage over its parent.</p> <p>Next, let's take a look at the debt. The NYLD bond issue executed to fund the transaction was priced with a 5.375% coupon. As shown in the table below, this is a full 87.5 basis points lower than both of NRG's debt offerings in 2014. While the benchmark 10-Year Treasury yield fell ~24 basis points from the time of NRG's two debt issuances to NYLD's, this difference accounts for less than one third of the total spread between the offerings.</p> <p>Therefore NYLD appears to also enjoy a significant cost of debt advantage compared to NRG.</p> <table cellspacing="0" cellpadding="3" class="data"> <tbody> <tr style="background-color:#036; color:#fff;"> <th style="text-align:left;" scope="col">Issuer</th> <th style="text-align:center" scope="col">NRG</th> <th style="text-align:center" scope="col">NRG</th> <th style="text-align:center" scope="col">NYLD</th> </tr> <tr class="gray"> <th style="text-align:left; background-color:#036; color:#fff;" scope="row">Offering Size</th> <td style="text-align:center;">$1,100MM</td> <td style="text-align:center;">$1,000MM</td> <td style="text-align:center;">$500MM</td> </tr> <tr> <th style="text-align:left; background-color:#036; color:#fff;" scope="row">Offering Date</th> <td style="text-align:center;">Jan-14</td> <td style="text-align:center;">Apr-14</td> <td style="text-align:center;">July-14</td> </tr> <tr class="gray"> <th style="text-align:left; background-color:#036; color:#fff;" scope="row">Maturity</th> <td style="text-align:center;">2022</td> <td style="text-align:center;">2024</td> <td style="text-align:center;">2024</td> </tr> <tr> <th style="text-align:left; background-color:#036; color:#fff;" scope="row">Type</th> <td style="text-align:center;">Senior Unsecured</td> <td style="text-align:center;">Senior Unsecured</td> <td style="text-align:center;">Senior Unsecured</td> </tr> <tr class="gray"> <th style="text-align:left; background-color:#036; color:#fff;" scope="row">Coupon</th> <td style="text-align:center;">6.25%</td> <td style="text-align:center;">6.25%</td> <td style="text-align:center;">5.375%</td> </tr> </tbody> </table> <h2>Summary</h2> <p>Based on this transaction, NYLD appears to possess advantages in both the debt and equity components of cost of capital over its parent company, providing tangible support to the cost of capital argument for forming a YieldCo. However, it remains to be seen how much of this advantage can be maintained over time and to what degree it persists across other YieldCos. For example, it could be difficult to improve upon the cost of capital of a diversified utility such as NextEra; however for a pure-play developer with a relatively higher cost of capital, the spread could likely be more favorable. Furthermore, market conditions, especially interest rates, are expected to significantly affect the YieldCo business model. That is, distribution yields would need to keep pace with any significant increase in interest rates to maintain investor interest.</p> <p>Given the nascent state of the YieldCo marketplace, many questions are yet to be answered and outcomes are yet to be determined. Future acquisitions by other YieldCos, provided they make use of the public markets as the Alta Wind transaction did will shed more light into the relative financing costs of YieldCos and their parent companies. Over time, YieldCos, securitizations, and other financial innovations could provide significant capital-raising capabilities for developers and owners of renewable energy projects, thus reducing financial barriers to scaled deployment and competitive cost of energy.</p> <h2 id="references" style="margin-top:50px;">References</h2> <p>2. &quot;NRG Yield to buy North America's largest wind power plant.&quot; SNL Energy. Accessed August 28, 2014: <a href=";KPLT=2">;KPLT=2</a>.<br /> 3. Urdanick, M. (2014). &quot;A Deeper Look into YieldCo Structuring.&quot;&nbsp; <a href=""></a>. <br /> 4. &quot;NRG Yield closes common stock offering SNL nyld equity offering.&quot; SNL Energy. Accessed August 28, 2014: <a href=";KPLT=2">;KPLT=2</a>. <br /> 5. &quot;NRG Yield Operating upsizes, prices senior note offering.&quot; SNL Energy. Accessed August 28, 2014: <a href=";KPLT=2">;KPLT=2</a>.</p> Thu, 07 May 2015 21:02:50 +0000 Editor 4126 at Note: Status of Website <div class="field field-type-text field-field-slideshowhead"> <div class="field-items"> <div class="field-item odd"> Note: Status of Website </div> </div> </div> <div class="field field-type-text field-field-slideshowtext"> <div class="field-items"> <div class="field-item odd"> <p>The website was principally populated with content from renewable energy modeling tools, analyses and securitization activities that were largely finalized in 2015. Due to frequent requests for the analyses, models and information, the content on this website is currently preserved and will be migrated to a new website in 2018. For current and ongoing finance analyses, please see the <a href="/finance/content/note-status-financerenrelgov-website" rel="nofollow">following links</a> or contact <a href="" rel="nofollow"></a>.</p> </div> </div> </div> <p>The website was principally populated with content from renewable energy modeling tools, analyses and securitization activities that were largely finalized in 2015. Due to frequent requests for the analyses, models and information, the content on this website is currently preserved and will be migrated to a new website in 2018.&nbsp; For current and ongoing finance analyses, please see the following links or contact <a href=""></a></p> <ul> <li><a href="">Terms, Trends, and Insights: PV Project Finance in the United States, 2017</a></li> <li><a href="">Wind Energy Finance in the United States: Current Practice and Opportunities</a></li> <li><a href="">Green Banks</a></li> <li><a href="">PV Project Finance in the United States, 2016. Terms, Trends, and Insights</a></li> <li><a href="">Solar Energy Prospecting in Remote Alaska: An Economic Analysis of Solar Photovoltaics in the Last Frontier State</a></li> </ul> Thu, 16 Apr 2015 00:31:33 +0000 financewebadmin 4125 at Residential Solar and the Uniform Commercial Code: A Primer on Solar-Financiers’ Rights in a Home Foreclosure <div class="field field-type-text field-field-blog-ss-title"> <div class="field-items"> <div class="field-item odd"> Solar, Security Interests, and the UCC </div> </div> </div> <div class="field field-type-text field-field-blog-ss-teaser"> <div class="field-items"> <div class="field-item odd"> Could the characterization of solar assets under the Uniform Commercial Code complicate residential solar financing? </div> </div> </div> <p>U.S. residential solar PV has been growing at a breakneck pace. Annual installations have increased nearly five-fold in the past five years and, in 2014, surpassed annual commercial capacity additions for the first time in the history of PV market tracking. Additionally, nearly a third of the entire solar industry's workforce&mdash;comprising over 174,000 employees&mdash;works in residential solar [<a href="#references">1</a>, <a href="#references">2</a>, <a href="#references">3</a>].</p> <p>Consistently high growth notwithstanding, residential solar remains something of a new phenomenon, and several industries are still trying to understand what it means for their businesses. One question being asked by housing regulators, mortgage bankers, ratings agencies, and others is: how do security interests in solar assets affect the claims in the case of default? And what rights do solar financiers have with regard to mortgage holders?</p> <p>This article will address these questions, but will first provide some background on the Uniform Commercial Code (UCC), a critical piece of the puzzle. If you are already familiar with the workings of the UCC, then it may be best to skip to the section on &quot;Why It Matters.&quot;</p> <h2>Security Interests and the UCC</h2> <p>Many solar financiers today offer at least the following three products: leases, power purchase agreements (PPAs), and loans. The first two are third-party ownership (TPO) products&mdash;i.e., ownership of the system remains with the financier and the customer pays a monthly sum (fixed or dependent on energy production) to access that system. In a loan arrangement, the customer owns the system and remits to the financier a monthly payment of principal and interest to pay down the debt.</p> <p>To protect themselves against customer defaults and other credit events, financiers will commonly take a security interest in the solar system that they have financed. In addition, they officially give notice of their rights to the system (the collateral) so that they may legally take possession of it if the customer breaches its contract (and so that another financier cannot). In the case of TPO, the financier already owns the system, but will usually take a security interest and file a financing statement to give notice of its position, just the same as it would for a loan.</p> <p>Financiers can take security interests as per the UCC, which is a set of legal rules for creating and enforcing rights in property subject to sales, leases, loans, and other types of transactions. Because all states have adopted the code, it serves as the overarching legal framework for commercial/financial transactions in the United States.</p> <p>A financier can receive a security interest if the debtor has rights In general, financiers can &quot;perfect&quot; their security interest in collateral&mdash;that is, to make it effective against competing claims from other creditors&mdash;by filing a UCC-1 Financing Statement [<a href="#references">4</a>]. They will typically do this with the secretary of state where the borrower is located, at which point the filing serves as the notice of lien to all interested parties. A financier may also choose to file a UCC-1 in the real property records (usually through the county clerk) because this gives an added layer of protection, and because solar collateral could be considered a &quot;fixture&quot; under state real estate law&mdash;more on this in the next section.</p> <p>Additionally, Section 9-103 of the UCC allows lenders a special type of security interest known as a &quot;purchase money security interest&quot; (PMSI). A PMSI arises where money from a loan is used to purchase the collateral for that loan. In other words, if a borrower will be using a loan to purchase a solar system, the lender would want to take a PMSI in that solar system as per the UCC. PMSIs have the distinct advantage of prioritizing the filer over all other lienholders on the asset. That means that the PMSI-perfected lender has first rights to the collateral and any recoveries in the case of a default.</p> <h2>Why It Matters: Fixtures vs. Personal Property</h2> <p>PMSIs will hold up if the collateral is regarded as personal property under the UCC. This may not be the case if they are regarded as &quot;fixtures.&quot;</p> <p>Fixtures represent something of an intermediate category between real property and personal property. Section 9-102 of the UCC defines fixtures as &quot;goods that have become so related to particular real property that an interest in them arises under real property law&quot; [<a href="#references">5</a>]. The category of fixtures can include installations such as a central air unit or a solar system.</p> <p>The last part of the definition&mdash;about an interest arising in the fixture under real property law&mdash;has implications for solar financiers. Say a particular state makes the determination that solar systems are indeed fixtures [<a href="#references">6</a>]. Now say that a homeowner in that state installs a solar system on his/her roof and then a few years later defaults on his/her home mortgage loan. <strong>If the mortgage holder forecloses on that home as a result, then it may be able to claim rights to the system as per the provisions of state real estate law. This could, in effect, prevent the solar financier from repossessing its collateral or obtaining first claim on any recoveries from that collateral.</strong></p> <p>Obviously, this represents a business risk for the residential solar industry, and many finance/installation companies have consequently taken the position that solar assets are personal property, not fixtures [<a href="#references">7</a>]. Their contracts (leases, PPAs, and loan documents) contain language specifying them as such, although this language does not bind the real estate mortgagee unless he/she also signs that same contract, or signs a disclaimer of any interest in the solar system.</p> <p>But even if homeowners and the solar industry intend that rooftop PV installations are personal property, the ultimate deciders on this issue are the state courts and arbiters who would be called upon to resolve any competing claims of the solar financier and the mortgage lender. Currently, there are no legal precedents in any state related to solar PV assets [<a href="#references">8</a>], so the legal outcomes are uncertain.</p> <h2>What Can Be Done?</h2> <p>There is an opportunity here. Instead of waiting for a legal dispute between a mortgage holder and a solar financier to go to court, the solar and mortgage banking industries could proactively seek an open dialogue to help each other mutually benefit from recognition of the solar asset class. For example, the two industries could mutually adopt some standard form of recognition that would allow the solar financiers to reach an agreement with new homeowners in previously foreclosed properties within, say, 90 days of the new owners buying the property (whether subject to the existing mortgage or a new one). This would sidestep any legal confrontations in the case of a foreclosure, and it would give solar financiers the opportunity to try and recover some cash flow on their collateral. If the solar industry could start such a dialogue with Fannie Mae and Freddie Mac, it stands to resolve potential conflicts with a large portion of the U.S. mortgage market, not to mention open the door for other mortgage banks to follow suit.</p> <p>The mortgage industry could be in a position to benefit as well. Solar systems owned by the homeowner (i.e., loan-financed or purchased outright) have been shown to increase the value of the homes on which they're installed [<a href="#references">9</a>, <a href="#references">10</a>, <a href="#references">11</a>]. Moreover, recent guidelines from HUD indicate that solar systems can be financed with mortgages (allowing for a mortgage increase of up to 20% in excess of the maximum insurable limit) [<a href="#references">12</a>]. This which would increase principal amounts and therefore revenue potential for lenders. Lastly, homeowners that go solar in markets with a relatively high cost of electricity and access to net metering may enjoy positive cash flow even after taking out debt to finance their system. That is, it may cost a homeowner less, on a monthly basis, to service his/her solar loan than it would to pay the utility for all his/her electricity. This stands in contrast to some other types of consumer debt (such as credit cards or auto loans), where savings are not often part of the decision to assume an obligation.</p> <p>As the cost of residential solar energy declines and as more markets open up, it will become ever more critical for the solar and mortgage industries to work together to avoid costly legal encounters and patchwork solutions.</p> <h3 id="references" style="margin-top:50px;">References and Notes:</h3> <p>[1] Solar Energy Industries Association &amp; Greentech Media Research. (2015). U.S. Solar Market Insight 2014 Year in Review.</p> <p>[2] Solar Energy Industries Association &amp; Greentech Media Research. (2014). U.S. Solar Market Insight 2013 Year in Review.</p> <p>[3] The Solar Foundation. (2015). National Jobs Census 2014. Available at: <a href=""></a></p> <p>[4] Filing a UCC-1 is not the only way to perfect a security interest, though it is the most common. For example, sometimes a security interest can be perfected &quot;automatically,&quot; i.e. without any filings or actions on the part of the creditor.</p> <p>[5] Cornell University Law School. &quot;Uniform Commercial Code: &sect; 9-102. Definitions and Index of Definitions.&quot;&nbsp; Available at: <a href=""></a></p> <p>[6] Section 9-301 (3) of the UCC states that the &quot;local law of that jurisdiction&quot; (i.e. state realty law) governs perfection of a security interest by filing a fixture filing. In other words, the determination of whether or not a solar system is a fixture or personal property will be made on a state-by-state basis.</p> <p>[7] A UCC-1 Financing Statement can be used for a &quot;fixture filing.&quot; However, it is important to note that a fixture filing in the real property records does not, in and of itself, necessarily characterize the items affixed to the home as fixtures</p> <p>[8] However, there has been case law where solar water heaters were held to be fixtures under the UCC. See re Arlett, 22 B.R. 732, 732-35 (Bankr. E.D. Cal. 1982), and Energy Control Services v. Arizona, 658 P.2d 820 (1982).</p> <p>[9] Hoen, B.; Wiser, R.; Thayer, M.; Cappers, P. (2012). Residential Photovoltaic Energy Systems in California: The Effect on Home Sales Prices. Berkeley, CA: Lawrence Berkeley National Laboratory. Available at: <a href=""></a></p> <p>[10] Hoen, B.; Adomatis, S.; Jackson, T.; Zivin-Graff, J.; Thayer, M.; Klise, G.; Wiser, R. (2015). Selling into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes. Berkeley, CA: Lawrence Berkeley National Laboratory. Available at: <a href=""></a></p> <p>[11] Desmarais, L. (2013). The Impact of Photovoltaic Systems on Market Value and Marketability: A Case Study of 30 Single‐Family Homes in the North and Northwest Denver Metro Area. Colorado Energy Office. Available at: <a href=""></a></p> <p>[12] The U.S. Department of Housing and Urban Development. (2015). FHA Single Family Housing Policy Handbook. II.A.2.a.v.(C), pg. 114. Available at: <a href=""></a></p> Tue, 14 Apr 2015 22:44:18 +0000 Travis Lowder 4124 at Best Practices Guides Now Available <div class="field field-type-text field-field-blog-ss-title"> <div class="field-items"> <div class="field-item odd"> Best Practices Guides Now Available </div> </div> </div> <div class="field field-type-text field-field-blog-ss-teaser"> <div class="field-items"> <div class="field-item odd"> Best practices guides in System Installation and Operations &amp; Maintenance now available for download. </div> </div> </div> Thu, 02 Apr 2015 23:08:27 +0000 financewebadmin 4123 at SAPC Mock Term Sheet Available <div class="field field-type-text field-field-blog-ss-title"> <div class="field-items"> <div class="field-item odd"> SAPC Mock Term Sheet Available </div> </div> </div> <div class="field field-type-text field-field-blog-ss-teaser"> <div class="field-items"> <div class="field-item odd"> Developed by the SAPC Legal Team, this term sheet proposes an innovative structure that incorporates securitization debt with tax equity investment. </div> </div> </div> Fri, 06 Feb 2015 21:19:25 +0000 financewebadmin 4119 at Loans vs. Leases <div class="field field-type-text field-field-blog-ss-title"> <div class="field-items"> <div class="field-item odd"> Loans vs. Leases </div> </div> </div> <div class="field field-type-text field-field-blog-ss-teaser"> <div class="field-items"> <div class="field-item odd"> Two new NREL analyses look at the benefits, challenges, and tradeoffs of financing solar installations with loans vs. third-party contracts. </div> </div> </div> Fri, 30 Jan 2015 21:34:23 +0000 financewebadmin 4118 at CREST Unlocked! <div class="field field-type-text field-field-blog-ss-title"> <div class="field-items"> <div class="field-item odd"> CREST Unlocked! </div> </div> </div> <div class="field field-type-text field-field-blog-ss-teaser"> <div class="field-items"> <div class="field-item odd"> All Cost of Renewable Energy Spreadsheet Tool models are now available without password protection and can be freely modified </div> </div> </div> Solar Wind Biomass Geothermal Fri, 23 Jan 2015 18:55:24 +0000 financewebadmin 4117 at A Deeper Look into Yieldco Structuring <div class="field field-type-text field-field-blog-ss-title"> <div class="field-items"> <div class="field-item odd"> Yieldcos: A Deeper Dive </div> </div> </div> <div class="field field-type-text field-field-blog-ss-teaser"> <div class="field-items"> <div class="field-item odd"> A close look into these voguish renewables financing structures </div> </div> </div> <p>By: Marley Urdanick</p> <p>Yieldcos seem to be the renewable energy financing mechanism in vogue lately. As the newest 2014 headliners, TerraForm Power and NextEra Energy attract media attention, and NRG Yield continues to exceed expectations, many industry stakeholders are asking: what is a yieldco and why is it attractive from an investment and finance perspective? To answer these questions, this article summarizes key elements of the yieldco structure and provides an overview of the current U.S. market.</p> <h2>The Basics</h2> <p>A yieldco is a dividend growth-oriented public company, created by a parent company (e.g., SunEdison), that bundles renewable and/or conventional long-term contracted operating assets in order to generate predictable cash flows. Yieldcos allocate cash available for distribution (CAFD) each year or quarter to shareholders in the form of dividends. This investment can be attractive to shareholders because they can expect low-risk returns (or yields) that are projected to increase over time. The capital raised can be used to pay off expensive debt or finance new projects at rates lower than those available through tax equity finance, which can exceed 8%.</p> <p>The case for yieldcos can be compelling, especially as an alternative to master limited partnerships (MLPs) and real estate investment trusts (REITs). Yieldcos, sometimes referred to as &quot;synthetic MLPs,&quot; are structured to simulate the avoided double-taxation benefit of MLPs and REITs. This means that rather than taxation taking place twice (once at the corporate level and again at the shareholder level), the yieldco is able to pass its untaxed earnings through to investors [<a href="#references">1</a>]. This is achieved by matching strong positive cash flows (income from assets) with losses that exceed taxable income (losses due to renewable asset depreciation and expenses). These &quot;net operating losses&quot; reduce the company's taxable income so that the company is taxed on lower annual earnings, or may not even owe taxes at all. Net operating losses can &quot;carry forward&quot; for future taxable events and therefore, many yieldcos do not expect to pay significant income tax for a period of years. Additionally, dividends may also receive favorable tax treatment at the shareholder level if the returns are treated as return <em>of</em> the original investment, as opposed to return <em>on</em> investment. When earnings are taxed at only one level, the company is able to raise capital from shareholders more affordably [<a href="#references">2</a>]. Class A Common Stock shareholders typically receive a 1099-DIV form for tax purposes, rather than the K-1 form associated with MLPs. This is good news for many investors accustomed to the K-1, which can be cumbersome across multiple states and have limitations on utilization in a tax return [<a href="#references">3</a>].</p> <p>Below is a general representation of the yieldco organizational structure, adapted from NRG Yield. The parent company must own a majority share of the yieldco (Class B Common Stock), while public shareholders are entitled to a minority share (Class A Common Stock). &nbsp;The revenue generated from projects owned and/or operated by &quot;operating subsidiaries&quot; is passed through this structure to deliver returns to shareholders.</p> <div style="width:560px; margin:25px auto;"><img width="560" height="480" alt="Bubble chart of a hypothetical yieldco structure showing the relationship between &#039;Parent Company&#039; (upper left), &#039;Public Shareholders&#039; (upper right), &#039;Yieldco Inc.&#039; (middle tier) and &#039;Operating Subsidiaries&#039; (bottom)" src="/finance/files/blog/blog_20140903.jpg" /></div> <p>Renewable energy projects face some uncertainty during the development stage but tend to produce low-risk cash flows once they are operating [<a href="#references">5</a>]. Yieldcos have the potential to unlock the value of these renewable assets. Yieldcos may attract new investors who may otherwise perceive unacceptable risk or lack the appropriate channels to invest capital in renewables. In exchange for the opportunity to invest in relatively low-risk assets, yieldco investors typically receive 3%&ndash;5% returns and long-term dividend growth targets of 8%&ndash;15% [<a href="#references">6</a>] [<a href="#references">7</a>]. For instance, TerraForm Power's prospectus targets a 15% compound annual growth rate in CAFD over a three-year period. &nbsp;Investor return is directly linked to the operating performance of the underlying assets and the resulting CAFD, 70%&ndash;90% of which is distributed as dividends.</p> <p>Each yieldco establishes a dividend policy and method for calculating CAFD; a generalization based on NRG's CAFD calculation is illustrated in Figure 2 below [<a href="#references">4</a>]. Generally, a yieldco will distribute quarterly earnings (in the example below, $40M), less: interest and tax paid, maintenance capital expenditures, and principal payments on existing debt ($26M), and reserves for prudent conduct of business ($3M). About 70 - 90% of the remaining CAFD ($11M) is paid out shareholders.</p> <div style="text-align:center" class="calloutwide"> <p>CAFD = [Quarterly Earnings] &ndash; [Interest and Tax paid + Maintenance and CapEx + Principal Payments] &ndash; [Reserves]</p> <p>CAFD = [$40 M] - [$26 M] &ndash; [$3 M] = $11 M</p> <p><strong>Figure 2. Generalized CAFD Calculation (in millions)</strong></p> </div> <h2>Which Companies Can Use The Yieldco Model?</h2> <p>To date, Yieldcos have been spinoffs of large industry players with the capital necessary to purchase third-party assets or build projects themselves [<a href="#references">8</a>]. They can emerge from unregulated arms of large utilities that own a mix of renewable and traditional generating assets (e.g., NextEra), independent power producers (IPPs), and pure-play solar or wind developers [<a href="#references">9</a>]. Currently, six renewable energy yieldcos operate in the US market: NRG Yield Inc., Pattern Energy Group, Inc. (NASDAQ:PEGI), TransAlta Renewables, Inc. (TSE:RNW), Abengoa Yield Plc (NASDAQ:ABY), Next Era Energy Partners, LP (NYSE:NEP), and TerraForm Power, Inc. (NASDAQ:TERP). TerraForm Power closed its initial public offering on July 23, 2014 [<a href="#references">10</a>].</p> <p>Table 1 presents the current landscape of yieldcos in the United States (each yieldco listed has at least one project operating in the United States, but many have projects in their portfolio operating outside the United States as well). Each yieldco's portfolio is assembled according to each parent company's expertise and the desire to balance income with tax benefits. Some yieldcos have chosen to include conventional assets, while others have elected to remain a pure-play renewable. Since 2013, yieldcos have acquired over 8 GW of assets in their portfolios (renewables account for 78%) and have raised a total of $3.8 billion.</p> <table cellpadding="3" class="data"> <caption>Table 1. The Yieldco Landscape</caption> <tbody> <tr class="gray"> <td>&nbsp;</td> <th scope="col">Portfolio</th> <th scope="col">Renewable Assets (MW-electric)</th> <th scope="col">Total Assets (MW)</th> <th scope="col">Total Capital Raised</th> <th scope="col">Market Cap</th> <th scope="col">Yield (Annual)</th> </tr> <tr> <th scope="row">NRG Yield, Inc.&nbsp;</th> <td>Conventional,&nbsp;solar, wind, thermal</td> <td>1401</td> <td>2984</td> <td>$840 million</td> <td>$3.9 billion</td> <td>5.45%</td> </tr> <tr> <th scope="row">Pattern Energy Group, Inc.</th> <td>Wind</td> <td>1932</td> <td>1932</td> <td>$938 million</td> <td>$1.9 billion</td> <td>6.25 %</td> </tr> <tr> <th scope="row">Abengoa Yield Plc.</th> <td>Solar, wind, conventional, electric transmission</td> <td>710</td> <td>1010;<br />1018 mi</td> <td>$829 million</td> <td>$3.0 billion</td> <td>3.6 %</td> </tr> <tr> <th scope="row">TransAlta Renewables, Inc.</th> <td>Wind,hydro</td> <td>1378</td> <td>1378</td> <td>C$346million<br />(US$323)</td> <td>$1.3 billion</td> <td>7.5 %</td> </tr> <tr> <th scope="row">NextEra Energy Partners, LP</th> <td>Wind, Solar</td> <td>989</td> <td>989</td> <td>$406 million</td> <td>$3.1 billion</td> <td>6.25%</td> </tr> <tr> <th scope="row">TerraForm Power, Inc.</th> <td>Solar</td> <td>523</td> <td>523</td> <td>$500 million</td> <td>$3.0 billion</td> <td>4.5% <br />(expected)</td> </tr> </tbody> </table> <p>All market cap information gathered from Bloomberg on August 1, 2014, unless noted otherwise. Asset, capital raised, and yield data from Kaye Scholer [<a href="#references">11</a>]</p> <p>One detail that a parent company may consider when moving forward with a yieldco is the potential effect on credit rating. When a parent company moves operating assets off of its balance sheet and into the yieldco, it may be left with the same debt liability [<a href="#references">9</a>]. If credit rating agencies perceive this change in assets-to-liabilities as a risk, they could downgrade the parent company's credit rating. However, this has yet to occur.</p> <h2>Portfolio size and structure</h2> <p>For a developer interested in this structure, Martin [<a href="#references">2</a>] suggests that a yieldco hold at least $500 million in operating project value and enough shares sold to raise at least $100 to $200 million in the initial public offering. Diversification of risk related to construction, system operation, offtaker creditworthiness, and geography may strengthen portfolios. For instance, all of the yieldcos listed in Table 1, with the exception of NRG yield, own a combination of U.S. and non-U.S. assets with varying offtaker characteristics. It is good to keep in mind that the portfolio is more likely a function of the yieldco's business model and the parent company's management expertise, and not &quot;one size fits all.&quot;</p> <p>For example, TerraForm Power's portfolio contains many small- to mid-size distributed generation (DG) projects. Two of the most notable assets within TerraForm's initial portfolio are the 46.5 MW &quot;U.S. Projects 2014<em>&quot; </em>and 19.6 MW <em>&quot;</em>Summit Solar Projects<em>.&quot; </em>Each project is a conglomeration of 42 and 50 sites, respectively, with offtakers that include utilities, municipalities, commercial, and governmental entities [<a href="#references">12</a>]. This profile differs from a yieldco portfolio like NRG's, which houses a mix of large, conventional, utility-scale solar and thermal projects.</p> <p>To ensure steady revenue streams, yieldcos may stock their portfolios with a diverse mix of assets. Asset types may include conventional generation, renewable energy (solar, wind, biomass, hydro, thermal, etc.), as well as transmission lines and natural gas pipelines. Abengoa Yield's portfolio includes 86 miles of transmission lines, while TerraForm Power's portfolio holds solar DG projects and is expected to acquire natural gas and hybrid energy assets in the future [<a href="#references">13</a>] [<a href="#references">12</a>]. NRG Yield chose to assemble an initial portfolio of approximately 36% conventional generating assets, 16% renewable, and 48% thermal energy/co-generation. The NRG Yield portfolio contains 25 assets across 10 states [<a href="#references">14</a>].</p> <h2>&quot;Drop downs&quot; Fuel the Yieldco</h2> <p>In order to retain favorable tax benefits and steady yields, the yieldco business model calls for acquisition of new generation assets as initial portfolio assets approach their contract expirations. This pipeline of assets, or &quot;drop downs,&quot; is intended to fuel the yieldco with stable cash flows to deliver above-average dividend growth with below average risk [<a href="#references">7</a>]. This drop-down schedule is critical to maintaining cash-flows and beneficial tax treatment and subsequently, is essential to the yieldcos future growth and viability as a long-term financing structure. To reduce the uncertainty of future cash flows and ensure access to assets, agreements such as right of first offer or call rights are common between the yieldco and the parent company. Yieldcos can continue to schedule drop downs for as long as the company wishes to maintain its tax advantaged status and sufficient supply of new operating assets exist [<a href="#references">15</a>] or until the business strategy dictates otherwise.</p> <h2 id="references">References</h2> <p>[1] Porter, L., Hurley, P., Bradley, D. (2013). &quot;Alternative Investment Structures.&quot; <em>Navigant</em>. Accessed July 29, 2013: <a href=""></a></p> <p>[2] Martin, K. (December 2013). &quot;Yield Cos Compared.&quot; Chadbourne &amp; Parke LLP.</p> <p>[3] Settle, E. (August 2014). Personal Communication.</p> <p>[4] NRG Yield, Inc. (February 2014). <em>Form 10-K Annual Report for the Fiscal Year ended December 31, 2013</em>. U.S. Securities and Exchange Commission.</p> <p>[5] Conneally, Tim. (July 2014). &ldquo;SunEdison&rsquo;s Transformative Solar Yieldco.&rdquo; Green Chip Stocks. Accessed July 22, 2014: <a href=""></a>.</p> <p>[6] Coster, P. (May 2014). <em>Clean Tech: YieldCo Primer</em>. J.P. Morgan North America Equity Research.</p> <p>[7] Goldman Sachs Group, Inc. (May 2014). &quot;YieldCo 101.&quot; Global Investment Research.</p> <p>[8] Rottman, M. (July 2014). Personal Interview.</p> <p>[9] Terzo, G. (November 2013). &quot;Moody's says YieldCos could put bondholders at risk.&quot; SNL.</p> <p>[10] Market Watch. (July 2014). &quot;SunEdison, Inc. and TerraForm Power, Inc Announce Closing of Initial Public Offering.&quot; <a href=""></a></p> <p>[11] Kaye Scholer LLP/Clean Energy Pipeline. (July 2014). U.S. Renewable Energy: Choices &amp; Challenges</p> <p>[12] TerraForm Power, Inc. (May 2014). <em>Form S-1 Registration Statement</em>. U.S. Securities and Exchange Commission.</p> <p>[13] &nbsp;Abengoa Yield, Plc. (April 2014). <em>Form F-1 Registration Statement</em>. U.S. Securities and Exchange Commission.</p> <p>[14] &nbsp;NRG Yield, Inc. (May 2014). &quot;Investor Presentation: Citi Global Energy and Utilities Conference.&quot;</p> <p>[15] Testa, D. (June 2014). &quot;Feed the Beast': YieldCo earnings prospects reliant on supportive renewables policy.&quot; SNL.</p> Wed, 03 Sep 2014 20:29:46 +0000 4111 at