Jan.Schwabe Cory.Renewable Energy Project Financing
Renewable Energy Project Financing: Impacts of the Financial Crisis and Other Observations Karlynn Cory Paul Schwabe Solar Electric Power Association Webinar National Renewable Energy Laboratory January 28th, 2010 NREL is a national laboratory of the U.S. Department of Energy Office of Energy Efficiency and Renewable Energy operated by the Alliance for Sustainable Energy, LLC
Presentation Overview 1
• NREL energy analysis financing activities
2
• Financial crisis & RE project development
3
4
5
6
• Federal sector opportunity • Utility scale solar opportunity • Feed-In-Tariffs • Conclusions
National Renewable Energy Laboratory
2
Innovation for Our Energy Future
NREL Financing Activities, by Sector Private Sector
Residential
Medium C&I
Policy and market analysis Project screening Feasibility analysis Technical info. expert
Incentive analysis Policy and market analysis Program design evaluation
Policy and market analysis Project screening Feasibility analysis Technical info. expert
Policy analysis/planning Market analysis Financing info. support
Public Sector
Med. Federal Govt.
State and Local Govt.
Distributed Systems National Renewable Energy Laboratory
Large C&I
Large Federal Govt.
Large Systems 3
Innovation for Our Energy Future
Tax Equity Project Financing Post financial crisis, insufficient traditional tax equity investment to fully support near-term RE growth, however late 2009-2010 market is recovering •Investor base ↓ (currently ~12 investors?) Equity IRRs ↑ •IOUs eligible for ITC (though utility tax normalization issues will apply)
Supplemented by ARRA1603 cash grant program •MACRS not eligible
Short-term, uncapped program opportunity •Solar projects received greatest number of grant awards •Wind projects received lion’s share of $ allocations
“This was not a large universe to begin with (Tax Equity Investors)…..and (immediately post crisis) tax equity returns secured at any price” National Renewable Energy Laboratory
4
Innovation for Our Energy Future
ARRA 1603 Grant Announcements (1.19.10) Project Type
Project Detail
# of Projects
Grant Allocations ($)
Wind Facility
Large Wind Small Wind
34 10
1,890,365,755 309,675
Solar
Solar Electricity Solar Thermal
146 12
76,301,509 764,278
Biomass
Biomass
6
71,437,547
Landfill
4
12,864,644
Geothermal
Geothermal
6
119,408,948
Hydropower Facility
Hydro
2
4,078,644
Combined Heat & Power System
CHP
2
436,473
Fuel Cell
Fuel Cell
3
1,870,235
225
2,177,837,708
TOTAL Source: http://www.ustreas.gov/recovery/docs/Web%20Posting.xls
# of Projects (n, %)
Grant Allocations ($m, %)
10, 4% 6, 3%
$77, 4% $84, 4% $119, 5%
7, 3%
$6,
Presentation Overview 1
• NREL energy analysis financing activities
2
• Financial crisis & RE project development
3
4
5
6
• Federal sector opportunity • Utility scale solar opportunity • Feed-In-Tariffs • Conclusions
National Renewable Energy Laboratory
2
Innovation for Our Energy Future
NREL Financing Activities, by Sector Private Sector
Residential
Medium C&I
Policy and market analysis Project screening Feasibility analysis Technical info. expert
Incentive analysis Policy and market analysis Program design evaluation
Policy and market analysis Project screening Feasibility analysis Technical info. expert
Policy analysis/planning Market analysis Financing info. support
Public Sector
Med. Federal Govt.
State and Local Govt.
Distributed Systems National Renewable Energy Laboratory
Large C&I
Large Federal Govt.
Large Systems 3
Innovation for Our Energy Future
Tax Equity Project Financing Post financial crisis, insufficient traditional tax equity investment to fully support near-term RE growth, however late 2009-2010 market is recovering •Investor base ↓ (currently ~12 investors?) Equity IRRs ↑ •IOUs eligible for ITC (though utility tax normalization issues will apply)
Supplemented by ARRA1603 cash grant program •MACRS not eligible
Short-term, uncapped program opportunity •Solar projects received greatest number of grant awards •Wind projects received lion’s share of $ allocations
“This was not a large universe to begin with (Tax Equity Investors)…..and (immediately post crisis) tax equity returns secured at any price” National Renewable Energy Laboratory
4
Innovation for Our Energy Future
ARRA 1603 Grant Announcements (1.19.10) Project Type
Project Detail
# of Projects
Grant Allocations ($)
Wind Facility
Large Wind Small Wind
34 10
1,890,365,755 309,675
Solar
Solar Electricity Solar Thermal
146 12
76,301,509 764,278
Biomass
Biomass
6
71,437,547
Landfill
4
12,864,644
Geothermal
Geothermal
6
119,408,948
Hydropower Facility
Hydro
2
4,078,644
Combined Heat & Power System
CHP
2
436,473
Fuel Cell
Fuel Cell
3
1,870,235
225
2,177,837,708
TOTAL Source: http://www.ustreas.gov/recovery/docs/Web%20Posting.xls
# of Projects (n, %)
Grant Allocations ($m, %)
10, 4% 6, 3%
$77, 4% $84, 4% $119, 5%
7, 3%
$6,
