Posts from the ‘Finance’ Category

Munich Re Sees $658 Million in Renewable Energy Insurance Sales

Feb. 15 (Bloomberg) — Munich Re, the world’s largest reinsurer, may generate 500 million euros ($658 million) in annual revenue within five years from insuring renewable energy projects, including protecting against the risk that their solar suppliers become insolvent.

If solar module output falls below guaranteed levels and the manufacturer is unable to meet liabilities because of insolvency, Munich Re will protect the project investor, management board member Thomas Blunck said.

via Munich Re Sees $658 Million in Renewable Energy Insurance Sales – Businessweek.

PACE Financing on the Rebound

Property-assessed clean energy, or PACE, financing has had a rough ride over the past few years, but it’s poised for a comeback. On the home front, we’ve got federal regulators considering ways to unblock a financing model that could spur billions of dollars in residential energy retrofits. And on the commercial side, we’ve got some showcase projects that could unlock a market even bigger in scope.

That’s not bad, considering the death many analysts were predicting for the PACE model in 2010. That’s when the Federal Housing Finance Agency told mortgage giants Fannie Mae and Freddie Mac that they couldn’t underwrite mortgages for homes that sought to pay back home energy efficiency upgrades, solar panels and other projects through property taxes.

via PACE Financing on the Rebound : Greentech Media.

Assessing the Risks in Solar Project Development

Over the next four years, 5.7 GW of utility-scale solar PV projects is expected to be built in the U.S. and another 1.3 GW in Canada for a total of 7 GW. Both amounts represent a significantly larger volume than what has been installed to date and is expected to be the dominating type of solar installation for that period of time. Yet, 7 GW only represent a fraction of the total capacity of large-scale solar PV projects initiated and under development in the same period, illustrating that solar project development still is a high-risk undertaking.

The reasons so few projects materialize are many; ranging from inexperience at the hand of the developer, to site specific problems, technical issues, regulatory problems and permitting issues — all affect the financial and technical viability of a project. In the end, failure to develop projects at some point in the development process comes at considerable cost for the project developer as well as the solar industry as a whole

via Assessing the Risks in Solar Project Development | Renewable Energy News Article.

Passive Loss Rules and You

As my colleague Mike Mendelsohn has noted in several analyses, the relatively constrained tax equity market may limit the amount of investment flowing to renewable energy projects. [1] [2] To help bolster the supply of tax equity, high-net-worth individuals could moonlight as renewable energy investors much in same way a corporation would. However, unlike corporations, individual investors are subject to passive loss rules that will likely mitigate the value of federal incentives for renewable energy projects.

Passive loss rules can restrict renewable energy investment in two ways:

The rules stipulate that individuals, as passive investors, can only apply the tax credits or depreciation to other forms of passive income. In the context of renewable energy projects, most individual investors who are not actively participating in the day-to-day operation and management decisions of the project would likely be considered as passive by the Internal Revenue Service. [3]

Most individuals do not earn that much passive income. Qualifying passive income is generally limited to either (1) rental income or (2) income from a project in which the investor does not materially participate either in the management or normal business activity.[4]

via Passive Loss Rules and You | Renewable Energy Project Finance.

Germany Maps Out Financing Plan for Renewable Energies

And the federal KfW bank group has introduced a new plan to further accelerate this shift to renewables, with increases in multimillion euro business loans now available. As more renewable energy is generated, energy management and storage are also receiving increased focus. Germany Trade & Invest, together with representatives of Germany’s six E-energy model regions, will be at this year’s E-world from February 7-9 in Essen to highlight opportunities for international companies in these growing market segments.

via World of Renewables – Renewable Energy News, Technology, Products, Finance, Companies, Events, Jobs and more – Germany Maps Out Financing Plan for Renewable Energies.

Sandia tool determines value of solar photovoltaic power systems

Consistent appraisals of homes and businesses outfitted with photovoltaic (PV) installations are a real challenge for the nation’s real estate industry, but a new tool developed by Sandia National Laboratories and Solar Power Electric and licensed by Sandia addresses that issue. Sandia scientists, in partnership with Jamie Johnson of Solar Power Electric, have developed PV ValueTM, an electronic form to standardize appraisals.

Funded by the Department of Energy’s Office of Energy Efficiency and Renewable Energy, the tool will provide appraisers, real estate agents and mortgage underwriters with more accurate values for PV systems.

via Sandia tool determines value of solar photovoltaic power systems.

Understanding Wind Farm Exposures and Managing Risk

Wind energy is becoming one of the most widely used sources of renewable energy. In fact, according to the American Wind Energy Association, the wind energy industry has added more than 35 percent of all the new power generating capacity since 2007. As the industry grows in popularity, new developers continue to enter the market, and existing developers may likely expand their investments in wind farms.

As developers know, constructing a wind farm is a multi-step, complex process where each phase, from site selection to maintenance and operations, necessitates attention to detail. But those immersed in the industry understand that the risks come from every direction and at every stage, even before the first blade turns, to capture energy from the wind.

To cope with those risks, it is critical that wind farm developers find insurance that addresses the unique exposures of their business. Their goal in choosing an insurer should be the seamless delivery of coverage that helps them manage risk throughout the lifecycle of operation.

via Understanding Wind Farm Exposures and Managing Risk | Renewable Energy News Article.

Why Solar Securitization Makes Sense

Solar structured transactions within a capital markets securitization approach can help increase the penetration of solar. In this article we will explore ideas for solar securitization in more detail.

Renewable energy generation and distributed solar generation in particular has made considerable progress over the last few years. Firm like Solar City on the residential side and Tioga Energy on the commercial side have helped move distributed solar forward. While there has been considerable progress, the current estimates are that only about 30k solar leases have been implemented on the residential side and a much lower amount for commercial PPA. The potential is vast, with 44 million rooftops in the United States. While there are differences in the residential and commercial markets the potential for securitization exists in both markets. Though in this article we focus on the commercial sector in more detail then the residential, the core issues are similar in both markets.

via - Renewable Energy Magazine, at the heart of clean energy journalism.

Clean Power Finance Expands Residential Solar Financing Products to New Markets

SAN FRANCISCO, Feb 01, 2012 (BUSINESS WIRE) — Clean Power Finance, the online marketplace for residential solar financing and sales software, today announced the availability of its residential solar finance products in the states of Colorado, Massachusetts and New Jersey. Initially only available in California, the solar leases and power purchase agreements (PPAs) Clean Power Finance manages and markets are now accessible to qualified solar sales and installation customers in other states to brand and market as their own financing solutions to homeowners.

via Clean Power Finance Expands Residential Solar Financing Products to New Markets – MarketWatch.