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After an exciting day of keynotes and discussions, the opening panel of the second day of the Renewable Energy Finance Forum (REFF West) began with a focus on investment banking perspectives on solar project financing. Bringing together a selection of top energy bankers from leading institutions that are active in renewable energy financing, the panel discussed movements and trends in the present and near future term and how the financial landscape has changed over the last 12 months.
By Charles Guo 9/24/13
Are firms in the renewable energy industry going out of business, or are they consolidating to set course to finally scale? Industry experts ranging from financiers to manufactures from the solar energy industry shared their foresights into the hotly followed solar energy industry. The panelist collectively agreed that this industry is just starting to rise. Three key strategy drivers of growth for the industry will need to come from tech innovation, globalization, and cost reduction. While instillation cost of solar PV has dropped tremendously in the last five years, the industry needs financing costs to come down even further before the industry can truly take-off. Industry experts are optimistic that the advance of data aggregation for the industry will allow investors to better understand and manage risks in their investments for this sector. As more firms develop financial vehicles to increase liquidity in the sector, experts expect capital injections to accelerate.
Sebastian Leyton 9/23/13
Small renewable projects represent a market that has not been fully taken advantage of, mainly due to issues relating with their access to financing. This doesn’t refer that the projects itself have issues, but implies that lenders mainly involved in project finance are more interested in larger projects, which involve sums over USD 100 million. Those projects are able to support the costs of a time intensive transaction and the corresponding fees, and represent a good opportunity of striking a good deal by achieving financial closing to most parties for the amounts involved. However, this doesn’t imply that small projects are not a lucrative market to be exploited and clearly represents a business opportunity.