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Renewable Energy Vision
Expert analysis on the most pressing issues facing the renewable energy sector in the U.S and abroad from ACORE staff, members and supporters.

Clean Energy Investment Keeps On Rolling

Published on 22 Jun 2015  |   Written by    |  

The White House made a big announcement at the Clean Energy Investment Summit this Tuesday: they have procured $4 billion worth of independent commitments from the private sector to fund investments in clean energy and other carbon-cutting solutions. These commitments come from a wide range of organizations, like the University of California and Goldman Sachs. There are many takeaways to a high-profile statement like this, but most importantly, this announcement just continues the trend of private investment leading the way on clean energy.

The White House also announced the establishment of the Clean Energy Impact Investment Center. This new center will make information about energy and climate programs more accessible to the public, and it will help charitable foundations align investment in clean energy with their mission.  The center will also work with the U.S. Small Business Administration to help “private investment funds seeking long-term capital.” With renewable energy policies often in flux, the leadership and direction from government agencies will play a crucial role in our transition to a clean energy economy.

Vice President Joe Biden said at the Summit, "To state the obvious, I'm not an investment banker…[but] I wouldn't go long on investments that lead to carbon pollution. I'd bet on clean energy."

Private investment institutions seem to agree. “All stages of investment in clean energy… are being seen in the private sector as increasingly attractive areas of investment," said Dan Reicher, acting CEO of ACORE and executive director of the Steyer-Taylor Center for Energy Policy and Finance at Stanford University.

The White House emphasized in their announcement that past investments in renewables have paid off. The cost of solar energy installations has been cut in half since 2009, and other developments in wind energy, advanced battery storage, and energy efficiency have made clean energy not only more viable than ever, but also a profitable investment that will benefit American innovation and jobs.

Some politicians and investors continue to hurl arguments that renewable energy systems remain unviable and expensive in a market that has been built on fossil fuels. The White House’s announcement once again hints that the naysayers are wrong, showing that the senior leadership of the U.S. is ready to place their confidence in renewables and that consumers should do so as well. John Holdren, senior advisor to the President on Science and Technology, explained at the summit that the $4 billion investment is a “huge down payment” on a clean energy future, and renewable energy investments also represent a down payment on the American economy.

Renewable energy investments represent investments in thousands of American jobs in the energy sector, as well as real savings for consumers who are increasingly able to produce their own electricity or spend less money on their power bills.  For example, according to the financial advisory firm Lazard, utility-scale solar, geothermal energy, biomass, and energy efficiency are already cost competitive with natural gas and coal, even without subsidies.

This competiveness explains why investors are turning to renewables in droves. Innovative financing schemes like green bonds, real estate investment trusts (REITs), solar leasing, and solar securities have made renewable energy systems attractive and mainstream investments. These financing mechanisms have played a crucial role in the rise of clean energy, and it helps explain the popularity of ACORE’s annual Renewable Energy Finance Forum conference on Wall Street. (As an aside, ACORE will be live blogging the event in real time here.)

Investors are increasingly seeing that clean energy represents a way to mitigate the risk to their portfolios and livelihoods that climate change represents. Just as importantly, clean energy offers a way to boost their balance sheet. Dan Reicher summed it up well: “There is an increasing public perception that clean energy technologies have become mainstream and they offer a chance to both do well and do good.” With innovative clean energy technologies already competing with conventional fuels, and a new injection of $4 billion in investment, the future is clear – and renewable.

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