Chris Cather's Instablog Chris Cather is a finance professional and organizer of the Solar Energy Heats Up: Financing Deals in the US and Europe conference. With over ten years of experience as a consultant in finance and project management, he has worked across sectors including energy, telecom, financial, and international organizations. Clients include Pace Global Energy, Pyramid Research, The World Bank and the Department of Justice. He specializes in financial modeling and forecasting, market analysis and business development and has done projects for Cohen Specialists, an American Stock Exchange specialist firm, and equity research for The Motley Fool. Chris Cather http://seekingalpha.com Solar Sector: What are the drivers for new projects? http://seekingalpha.com/instablog/424904-chris-cather/40565-solar-sector-what-are-the-drivers-for-new-projects?source=feed 40565 Upstream solar module manufacturers like Evergreen Solar (ESLR) and First Solar (FSLR) sell to developers of residential, commercial, utility scale and government segment solar projects.
 
What’s driving those projects?
 
Mike Niver, Director of Project Finance at SolarCity, the California-based provider and installer was a panelist at the Novogradac Financing Renewable Energy Conference in Washington, D.C. in mid November. Already a strong solar brand with an established presence in California, SolarCity is ramping up for expansion. Niver looks for three conditions when targeting new states: favorable subsidies, plenty of sun, and retail rates he can compete with. All vary dramatically from state to state.
 
SolarCity expanded its residential segment to Oregon in October and Colorado in December as a result of those state’s robust subsidy regimes. Evergreen and First Solar are two of SolarCity’s module suppliers for the residential and other segments.
 
Along with China, ESLR and FSLR view the US as an “emerging market” and will undoubtedly keep their eye on the evolving state solar subsidy landscape.
 
Disclosure: Author owns share in the Claymore/MAC Global Solar Energy Index ETF (TAN), which has holdings in FSLR and ESLR.


Disclosure: Disclosure: Author owns share in the Claymore/MAC Global Solar Energy Index ETF (TAN), which has holdings in FSLR and ESLR.]]> Sat, 19 Dec 2009 16:16:15 -0500 Upstream solar module manufacturers like Evergreen Solar (ESLR) and First Solar (FSLR) sell to developers of residential, commercial, utility scale and government segment solar projects.
 
What’s driving those projects?
 
Mike Niver, Director of Project Finance at SolarCity, the California-based provider and installer was a panelist at the Novogradac Financing Renewable Energy Conference in Washington, D.C. in mid November. Already a strong solar brand with an established presence in California, SolarCity is ramping up for expansion. Niver looks for three conditions when targeting new states: favorable subsidies, plenty of sun, and retail rates he can compete with. All vary dramatically from state to state.
 
SolarCity expanded its residential segment to Oregon in October and Colorado in December as a result of those state’s robust subsidy regimes. Evergreen and First Solar are two of SolarCity’s module suppliers for the residential and other segments.
 
Along with China, ESLR and FSLR view the US as an “emerging market” and will undoubtedly keep their eye on the evolving state solar subsidy landscape.
 
Disclosure: Author owns share in the Claymore/MAC Global Solar Energy Index ETF (TAN), which has holdings in FSLR and ESLR.


Disclosure: Disclosure: Author owns share in the Claymore/MAC Global Solar Energy Index ETF (TAN), which has holdings in FSLR and ESLR.]]> fslr eslr solar Government Financing Slow to Drive Deals in Solar Sector http://seekingalpha.com/instablog/424904-chris-cather/36285-government-financing-slow-to-drive-deals-in-solar-sector?source=feed 36285  
 
Are government tax credits, grants and loan guarantees, driving demand for solar energy in the US market?
 
Yes, but it’s a slow process.
 
Those were some of the takeaways from the Novogradac Financing Renewable Energy Conference as it convened in Washington, D.C. last week from November 10 – 12 bringing together solar and other renewable industry players.
 
As a solar sector contributor, I covered the conference for Seeking Alpha over the three day period from early morning coffee over market update sessions with panelists to late night sponsor receptions where “coffee turned to scotch”. I was awake enough of the time to get fresh updates while making some great new industry contacts.
 
Financing deals through tax credits and cash grants
The conference focused on “deals” or downstream solar and other renewable projects and how they are financed, so first, a little background. Traditional renewable energy projects in the United States are financed by tax credit equity (“dollar for dollar” reduction in tax liability). Through 2016, solar projects are eligible for a 30% Investment Tax Credit (ITC). Upstream solar cell manufacturers, like JA Solar (JASO), one of the conference presenters, would supply developers and benefit from this process.
 
The credit crisis dramatically reduced the number of tax credit equity investors to around twelve. Responding to the crisis, the American Recovery and Reinvestment Act of 2009 (ARRA) initiated US Treasury payments in lieu of the 30% ITC. The IRS issued guidance in August 2009 saying the same 30% credit could now be taken as a tax-exempt cash grant expiring at the end of 2010.
 
But applying for solar cash grants have proven to be a time consuming process. Stephen Tracy, CPA and advisor on renewable energy deals for Novogradac, the conference sponsor, says that developers aren’t seeing 60 day turnarounds for grant applications as stated in IRS guidance.
 
Rounds of questions over solar system valuations and inclusion of soft costs to determine the 30% payment have led to multiple month delays beyond the 60 day window. According to Keith Martin, attorney with Chadbourne & Parke, as of early November the solar sector had received only $5 million out of a $1 billion disbursement of US Treasury payments with the balance allocated to the wind sector. The good news is that banks are making bridge loans secured by pending grants.
 
Bankable deals?
Citigroup (C), US Bank (USB) and TD Bank (TD), three of the tax equity investors still standing, were panel participants on Wednesday. The consensus was that they are being more selective about what they consider to be bankable deals, and then only arranging financing for clients in an existing relationship.
 
Which is not to say that banks are not arranging financing for their best customers like solar module manufacturer SunPower (SPWRA). On the third quarter conference call in October available here on SA, SunPower references its $100 million agreement with Wells Fargo (WFC) supporting the PPA market. But smaller deals, especially with new developers with projects under 1 megawatt are having trouble attracting investors.
 
Creative financing
However, necessity is the mother of invention. Innovative capital structures and creative financing have emerged as pointed out in the June Renewable Energy Finance Forum (REFF) – Wall Street New financing methods replacing tax equity include:
o   Use of Treasury grant
o   Private equity
o   Deferred sponsor fees
o   Sponsor equity
o   State subsidies
 
Consolidate or perish?
Partially as a result of the new financing environment, vertical integration is the new Darwinian reality. As Tracy points out, “any inefficiency will cost you.” Manufacturers are reaching downstream to acquire developers and build out their supply chains. The First Solar (FSLR) acquisition of OptiSolar and more recently the acquisition of utility-scale developer SunEdison by MEMC (WFR), the silicon company are contributing to a dramatically different solar industry.
 
Crystal ball
And finally, Mike Niver, Director of Project Finance at SolarCity, the California solar provider is thinking about the long-term health of the solar sector. He sees long-term subsidy regimes as more sustainable than, rich, but short-lived programs. He points to the federal ITC extension to 2016 but would like to see the grant extended beyond 2010.
 
Disclosure: Author owns share in the Claymore/MAC Global Solar Energy Index ETF (TAN), which has holdings in JASO, SPWRA, FSLR and WFR.
 
]]> Wed, 18 Nov 2009 11:28:47 -0500  
 
Are government tax credits, grants and loan guarantees, driving demand for solar energy in the US market?
 
Yes, but it’s a slow process.
 
Those were some of the takeaways from the Novogradac Financing Renewable Energy Conference as it convened in Washington, D.C. last week from November 10 – 12 bringing together solar and other renewable industry players.
 
As a solar sector contributor, I covered the conference for Seeking Alpha over the three day period from early morning coffee over market update sessions with panelists to late night sponsor receptions where “coffee turned to scotch”. I was awake enough of the time to get fresh updates while making some great new industry contacts.
 
Financing deals through tax credits and cash grants
The conference focused on “deals” or downstream solar and other renewable projects and how they are financed, so first, a little background. Traditional renewable energy projects in the United States are financed by tax credit equity (“dollar for dollar” reduction in tax liability). Through 2016, solar projects are eligible for a 30% Investment Tax Credit (ITC). Upstream solar cell manufacturers, like JA Solar (JASO), one of the conference presenters, would supply developers and benefit from this process.
 
The credit crisis dramatically reduced the number of tax credit equity investors to around twelve. Responding to the crisis, the American Recovery and Reinvestment Act of 2009 (ARRA) initiated US Treasury payments in lieu of the 30% ITC. The IRS issued guidance in August 2009 saying the same 30% credit could now be taken as a tax-exempt cash grant expiring at the end of 2010.
 
But applying for solar cash grants have proven to be a time consuming process. Stephen Tracy, CPA and advisor on renewable energy deals for Novogradac, the conference sponsor, says that developers aren’t seeing 60 day turnarounds for grant applications as stated in IRS guidance.
 
Rounds of questions over solar system valuations and inclusion of soft costs to determine the 30% payment have led to multiple month delays beyond the 60 day window. According to Keith Martin, attorney with Chadbourne & Parke, as of early November the solar sector had received only $5 million out of a $1 billion disbursement of US Treasury payments with the balance allocated to the wind sector. The good news is that banks are making bridge loans secured by pending grants.
 
Bankable deals?
Citigroup (C), US Bank (USB) and TD Bank (TD), three of the tax equity investors still standing, were panel participants on Wednesday. The consensus was that they are being more selective about what they consider to be bankable deals, and then only arranging financing for clients in an existing relationship.
 
Which is not to say that banks are not arranging financing for their best customers like solar module manufacturer SunPower (SPWRA). On the third quarter conference call in October available here on SA, SunPower references its $100 million agreement with Wells Fargo (WFC) supporting the PPA market. But smaller deals, especially with new developers with projects under 1 megawatt are having trouble attracting investors.
 
Creative financing
However, necessity is the mother of invention. Innovative capital structures and creative financing have emerged as pointed out in the June Renewable Energy Finance Forum (REFF) – Wall Street New financing methods replacing tax equity include:
o   Use of Treasury grant
o   Private equity
o   Deferred sponsor fees
o   Sponsor equity
o   State subsidies
 
Consolidate or perish?
Partially as a result of the new financing environment, vertical integration is the new Darwinian reality. As Tracy points out, “any inefficiency will cost you.” Manufacturers are reaching downstream to acquire developers and build out their supply chains. The First Solar (FSLR) acquisition of OptiSolar and more recently the acquisition of utility-scale developer SunEdison by MEMC (WFR), the silicon company are contributing to a dramatically different solar industry.
 
Crystal ball
And finally, Mike Niver, Director of Project Finance at SolarCity, the California solar provider is thinking about the long-term health of the solar sector. He sees long-term subsidy regimes as more sustainable than, rich, but short-lived programs. He points to the federal ITC extension to 2016 but would like to see the grant extended beyond 2010.
 
Disclosure: Author owns share in the Claymore/MAC Global Solar Energy Index ETF (TAN), which has holdings in JASO, SPWRA, FSLR and WFR.
 
]]> fslr jaso spwra wfr c usb td wfc solar energy How will ARRA funding impact Evergreen Solar, Trina Solar and Solar Fun? http://seekingalpha.com/instablog/424904-chris-cather/34952-how-will-arra-funding-impact-evergreen-solar-trina-solar-and-solar-fun?source=feed 34952
New tax credits, grants and loan guarantees through the American Recovery and Investment Act (ARRA) administered through the Department of Energy can only be used for solar projects in the United States. With the global revenue mix of public solar module manufacturers, will it even have much of an effect on valuations, especially short-term?
 
Recently, a NY private equity firm contacted me with this very question for three solar stocks in their portfolio: Evergreen Solar (ESLR), Trina Solar (TSL) and Solarfun (SOLF).
 
The US market for solar modules remains the smallest, but most likely fastest growing country market out of total global revenue for ESLR, TSL, and SOLF. US revenue as a percentage of global revenue is highest as of Q2 2009 for ESLR at 24% and still relatively small for both SOLF and TSL at 1 – 2%.
 
In this context, the short-term impact of new US Government financing mechanisms may accelerate new downstream solar projects for which the portfolio companies are suppliers. Fellow Seeking Alpha contributor Kelvin Schulle, point this out here.

However, in a broader context, as mentioned, the US represents a small percentage of overall revenue. Interestingly, the portfolio companies are using diverse financing techniques for projects that will supply their non-US markets including the US Ex-Im Bank and Chinese government. And some non-US banks are being used for customer financing in the US.

As mentioned in this summer’s Renewable Energy Finance Forum (REFF) – Wall Street, renewable energy deal cap structures are evolving. A typical deal may be 55% debt, 30% US Gov. grant, 15% equity. Overall, US dealflow of solar projects should ramp in 2010.

Specifically, there were some interesting comments surrounding the growth of US markets and the effects of ARRA financing during the second quarter conference calls. The transcripts on Seeking Alpha are hyperlinked below.

 Of the three portfolio companies, Evergreen Solar has the largest US presence growing sequentially from Q1 to Q2 from 20% to 24%. The call suggested pent-up demand on commercial and utility scale projects that would benefit from guidance on the DOE Loan Guarantee and Treasury Grant Programs issued in August.

Trina Solar currently has a small US presence but sees the US as an “emerging” and its fastest growing global market accounting for as much as 15 – 20% of global revenue in Q4. TSL noted an increase in US module orders financed by state and city solar programs in California and Florida.

For Solarfun, as of Q2, percentage of global revenue in US is small, maybe around 1%, but expected to ramp in Q3 and Q4. A recent sales office opened in California and alliances formed with US strategic partners.
 Stay tuned. The Novogradac Financing Renewable Energy Conference meeting in Washington, D.C. November 11th and 12th will convene solar developers and financiers and should provide some valuable insights. I will be covering the conference for Seeking Alpha and will report on all the fun.
Disclosure: Contributor Chris Cather owns share in the Claymore/MAC Global Solar Energy Index ETF (TAN), which has holdings in ESLR, TSL and SOLF.
]]> Mon, 09 Nov 2009 12:45:55 -0500
New tax credits, grants and loan guarantees through the American Recovery and Investment Act (ARRA) administered through the Department of Energy can only be used for solar projects in the United States. With the global revenue mix of public solar module manufacturers, will it even have much of an effect on valuations, especially short-term?
 
Recently, a NY private equity firm contacted me with this very question for three solar stocks in their portfolio: Evergreen Solar (ESLR), Trina Solar (TSL) and Solarfun (SOLF).
 
The US market for solar modules remains the smallest, but most likely fastest growing country market out of total global revenue for ESLR, TSL, and SOLF. US revenue as a percentage of global revenue is highest as of Q2 2009 for ESLR at 24% and still relatively small for both SOLF and TSL at 1 – 2%.
 
In this context, the short-term impact of new US Government financing mechanisms may accelerate new downstream solar projects for which the portfolio companies are suppliers. Fellow Seeking Alpha contributor Kelvin Schulle, point this out here.

However, in a broader context, as mentioned, the US represents a small percentage of overall revenue. Interestingly, the portfolio companies are using diverse financing techniques for projects that will supply their non-US markets including the US Ex-Im Bank and Chinese government. And some non-US banks are being used for customer financing in the US.

As mentioned in this summer’s Renewable Energy Finance Forum (REFF) – Wall Street, renewable energy deal cap structures are evolving. A typical deal may be 55% debt, 30% US Gov. grant, 15% equity. Overall, US dealflow of solar projects should ramp in 2010.

Specifically, there were some interesting comments surrounding the growth of US markets and the effects of ARRA financing during the second quarter conference calls. The transcripts on Seeking Alpha are hyperlinked below.

 Of the three portfolio companies, Evergreen Solar has the largest US presence growing sequentially from Q1 to Q2 from 20% to 24%. The call suggested pent-up demand on commercial and utility scale projects that would benefit from guidance on the DOE Loan Guarantee and Treasury Grant Programs issued in August.

Trina Solar currently has a small US presence but sees the US as an “emerging” and its fastest growing global market accounting for as much as 15 – 20% of global revenue in Q4. TSL noted an increase in US module orders financed by state and city solar programs in California and Florida.

For Solarfun, as of Q2, percentage of global revenue in US is small, maybe around 1%, but expected to ramp in Q3 and Q4. A recent sales office opened in California and alliances formed with US strategic partners.
 Stay tuned. The Novogradac Financing Renewable Energy Conference meeting in Washington, D.C. November 11th and 12th will convene solar developers and financiers and should provide some valuable insights. I will be covering the conference for Seeking Alpha and will report on all the fun.
Disclosure: Contributor Chris Cather owns share in the Claymore/MAC Global Solar Energy Index ETF (TAN), which has holdings in ESLR, TSL and SOLF.
]]> eslr tsl solf solar energy Renewable Energy Finance Forum (REFF) – Wall Street: Looking to Washington for Guidance on New Financing http://seekingalpha.com/instablog/424904-chris-cather/11325-renewable-energy-finance-forum-reff-wall-street-looking-to-washington-for-guidance-on-new-financing?source=feed 11325  

The PowerPoint slide said it all: Bank of America Merrill Lynch.

 

A dramatically transformed financial landscape was the setting for the late June Renewable Energy Finance Forum (REFF) – Wall Street in midtown Manhattan. This year’s REFF brought together renewable energy industry leaders and sent a message to Washington: give us guidance on the promised grants and loan guarantees to get capital flowing to finance deals in solar, wind and other cleantech sectors.

 

REFF echoed the current finance zeitgeist: Washington has replaced New York as the new global financial center. Hosted by the industry’s principal advocacy group, the American Council on Renewable Energy (ACORE) brought together investors, lenders and developers to partner with Wall Street in shaping policy in both the short and long term.

 

The end of tax equity?

Historically, solar and wind project finance has been driven by tax equity owing to government Investment and Production Tax Credits and lack of project cash flows required by lenders for debt coverage. As a result of the credit crisis, tax equity investors like Lehman Brothers and AIG have either disappeared or lost their tax appetite with no liability to offset. Responding accordingly, new products are being offered by DOE and Treasury converting the ITC/PTC into a grant and guaranteeing loans but with little guidance to date.

 

Neil Auerbach, Managing Partner of Hudson Clean Energy Partners was especially outspoken on the future of tax equity and the emergence of private equity. Some highlights:

 

  • Transitional period in renewable energy financing with a shifting financial landscape
  • $134b RE investment required to hit 10% target by 2012 will introduce new cap structure: 55% debt, 30% US Gov. grant, 15% equity
  • Tax equity will not fund needed investment in RE
  • Private equity will replace tax equity
  • Tax equity increases cost of debt
    • Tax equity financed debt:10 – 15%
    • Typical project finance debt: 5 – 7%
    • Target cost of RE debt:  4.5 – 5%

 

  • Every 100bp increase in cost of debt adds $2.00 - $5.00 per MWh to RE generation

 

The afternoon panel on New Equity Markets with JP Morgan (JPM), Goldman Sachs (GS), TD Bank (TD), GE Energy Financial Services (GE) reiterated earlier panelist comments on private equity funds as emerging players.

 

Goldman Sachs, one of the first banks to make a commitment to invest in renewable energy in 2005, prefers making private equity investments in existing tax equity client relationships such as SunEdison, the solar energy developer.

 

Both Goldman and JP Morgan made clear that they are still active tax equity investors and open for business.

 

Stricter investment criteria for developers

The equity financing environment won’t get any easier for developers The consensus on the Global Financial Markets panel with Morgan Stanley (MS), UBS (UBS), Citigroup (C)  Bank of America (BAC) – Merrill Lynch, Credit Suisse (CS), and Good Energies?

Increased selectivity about RE investments. What are the new investment criteria?

 

  • Increased selectivity on what is and isn’t bankable including:
    • Long term offtake agreement/20 year PPA
    • Proven technology
    • Cash flow for 12 – 18 months
    • Competitive advantage

 

But not so fast.

 

Some conference participants weren’t buying the banking infomercial. Stephen Tracy works with boutique CPA firm Novogradac and specializes in advising clients on tax equity. His take: “The discussions were interesting but the Bankers appear to be talking too theoretically about the perfect loan and credit participants. I would like to hear more discussion about available debt financing for other than the largest and best capitalized market participants.”

 

While bankers may be too focused on bankable deals and limiting themselves to existing client relationships, other shops are more focused on project economics and the nuts and bolts of getting deals done with innovative financing techniques.

 

What happens next?

Each day was summarized nicely with takeaways and the conference ended with a Crystal Ball panel to look into the future. Some common themes emerged:

 

  • 2009 will be flat with deal flow increasing in 2010
  • Public/private financing collaboration critical
  • Debt/equity mix of deals will change
  • RE industry is waiting on grant/guarantee policy guidance and increased capital flows
  • Pent up demand will increase deal flow once guidance issued
  • Fewer players will remain in industry once smoke clears
  • Developers should make every effort to mitigate risk
  • No substitute for strong deal elements
  • Innovative capital structures are the new reality: vendor/utility financing/partnerships combined with post-guidance DOE grants/guarantees

 

Significantly, the renewable energy industry and Wall Street are looking beyond the next several years and will partner with advocacy groups like ACORE to shape policy and structure renewable energy markets for the long-term.

 

It’s sure to be a bumpy ride for solar, wind and other renewables. But, it will be fun.

 

Disclosure: At the time of writing this article the author held no significant direct interest in the companies listed.

 

]]> Fri, 03 Jul 2009 12:06:14 -0400  

The PowerPoint slide said it all: Bank of America Merrill Lynch.

 

A dramatically transformed financial landscape was the setting for the late June Renewable Energy Finance Forum (REFF) – Wall Street in midtown Manhattan. This year’s REFF brought together renewable energy industry leaders and sent a message to Washington: give us guidance on the promised grants and loan guarantees to get capital flowing to finance deals in solar, wind and other cleantech sectors.

 

REFF echoed the current finance zeitgeist: Washington has replaced New York as the new global financial center. Hosted by the industry’s principal advocacy group, the American Council on Renewable Energy (ACORE) brought together investors, lenders and developers to partner with Wall Street in shaping policy in both the short and long term.

 

The end of tax equity?

Historically, solar and wind project finance has been driven by tax equity owing to government Investment and Production Tax Credits and lack of project cash flows required by lenders for debt coverage. As a result of the credit crisis, tax equity investors like Lehman Brothers and AIG have either disappeared or lost their tax appetite with no liability to offset. Responding accordingly, new products are being offered by DOE and Treasury converting the ITC/PTC into a grant and guaranteeing loans but with little guidance to date.

 

Neil Auerbach, Managing Partner of Hudson Clean Energy Partners was especially outspoken on the future of tax equity and the emergence of private equity. Some highlights:

 

  • Transitional period in renewable energy financing with a shifting financial landscape
  • $134b RE investment required to hit 10% target by 2012 will introduce new cap structure: 55% debt, 30% US Gov. grant, 15% equity
  • Tax equity will not fund needed investment in RE
  • Private equity will replace tax equity
  • Tax equity increases cost of debt
    • Tax equity financed debt:10 – 15%
    • Typical project finance debt: 5 – 7%
    • Target cost of RE debt:  4.5 – 5%

 

  • Every 100bp increase in cost of debt adds $2.00 - $5.00 per MWh to RE generation

 

The afternoon panel on New Equity Markets with JP Morgan (JPM), Goldman Sachs (GS), TD Bank (TD), GE Energy Financial Services (GE) reiterated earlier panelist comments on private equity funds as emerging players.

 

Goldman Sachs, one of the first banks to make a commitment to invest in renewable energy in 2005, prefers making private equity investments in existing tax equity client relationships such as SunEdison, the solar energy developer.

 

Both Goldman and JP Morgan made clear that they are still active tax equity investors and open for business.

 

Stricter investment criteria for developers

The equity financing environment won’t get any easier for developers The consensus on the Global Financial Markets panel with Morgan Stanley (MS), UBS (UBS), Citigroup (C)  Bank of America (BAC) – Merrill Lynch, Credit Suisse (CS), and Good Energies?

Increased selectivity about RE investments. What are the new investment criteria?

 

  • Increased selectivity on what is and isn’t bankable including:
    • Long term offtake agreement/20 year PPA
    • Proven technology
    • Cash flow for 12 – 18 months
    • Competitive advantage

 

But not so fast.

 

Some conference participants weren’t buying the banking infomercial. Stephen Tracy works with boutique CPA firm Novogradac and specializes in advising clients on tax equity. His take: “The discussions were interesting but the Bankers appear to be talking too theoretically about the perfect loan and credit participants. I would like to hear more discussion about available debt financing for other than the largest and best capitalized market participants.”

 

While bankers may be too focused on bankable deals and limiting themselves to existing client relationships, other shops are more focused on project economics and the nuts and bolts of getting deals done with innovative financing techniques.

 

What happens next?

Each day was summarized nicely with takeaways and the conference ended with a Crystal Ball panel to look into the future. Some common themes emerged:

 

  • 2009 will be flat with deal flow increasing in 2010
  • Public/private financing collaboration critical
  • Debt/equity mix of deals will change
  • RE industry is waiting on grant/guarantee policy guidance and increased capital flows
  • Pent up demand will increase deal flow once guidance issued
  • Fewer players will remain in industry once smoke clears
  • Developers should make every effort to mitigate risk
  • No substitute for strong deal elements
  • Innovative capital structures are the new reality: vendor/utility financing/partnerships combined with post-guidance DOE grants/guarantees

 

Significantly, the renewable energy industry and Wall Street are looking beyond the next several years and will partner with advocacy groups like ACORE to shape policy and structure renewable energy markets for the long-term.

 

It’s sure to be a bumpy ride for solar, wind and other renewables. But, it will be fun.

 

Disclosure: At the time of writing this article the author held no significant direct interest in the companies listed.

 

]]>