NECEC Finance Series: Financing Renewable Energy

April 2011
T3 Advisors

On Wednesday, April 13, I represented T3’s CleanTech team at the New England Clean Energy Council’s Finance Series, where panelists from Northern Power, BlueWave Strategies and Groom Energy spoke about the challenges in financing renewable energy today.

Companies like BlueWave struggle with the absence of liquidity in the SREC (solar renewable energy credit) market as there’s no real market-clearing price, and ownership of the asset is unclear.  For wind companies like Northern Power, the REC market is meaningless as they don’t provide any real value.radopix - Fotolia-resized-600

Groom Energy had a different perspective, as most of their clients are corporations, making decisions to do a project based on a 12-month return on investment.  A hot topic for Groom is FAS 13, the imminent accounting change that will make leases and financial commitments that are currently OFF balance sheet ON balance sheet.  Groom felt that this was a bigger issue for their PPAs (power purchasing agreements) since it would effectively negate their value proposition.

All the panelists agreed that while there were a lot of challenges in the renewable energy financing space today, they’re clearly in business for a reason.  Groom Energy just raised capital, Northern Power’s Wind Turbines received financing to sell its turbines to Italy.

Clearly something is working in renewable energy finance, and as policy meets the speed of growing technology we’ll see additional resources for a continually evolving and exciting renewable energy economy.