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Experts Optimistic about State of Industry, Resurgence of Investments

(3BLMedia/theCSRfeed) - San Francisco, CA - Oct. 1, 2009 - The second annual Renewable Energy Finance Forum (REFF) - West
hosted by the American Council On Renewable Energy (ACORE) andEuromoney Energy Events in San Francisco brought together 410 investors, industry executives and policy makers for an engaging discussion on the state of the renewable energy industry. During the two-day session, the 61 speakers and panelists expressed optimism about the quality of projects in the pipeline as well as the available financing strategies âEUR" both public and private âEUR" following the recent
economic crisis.

âEURoeThere appears to be a surprising resurgence of renewable energy investments and finance in the past three months. In their flight to quality, the capital markets are now seeking out renewable energy venture capital, a new IPO window and new tax equity investors. We also see a return of international lenders to the U.S. project finance market,âEUR said ACORE President Michael Eckhart.

Speakers from leading renewable energy companies, investment institutions, nonprofits and government organizations focused on the impact that stimulus funding has had on renewable energy development and the need for government policies to continue to drive the industry forward. Matt Rogers, Senior Advisor to the U.S. Secretary of Energy, noted the Department of Energy has already given out more than $16 billion in stimulus funding and is slated to distribute a total of $30
billion by the end of the year. While there are other sources of federal money available, the real concern is what happens when the funding runs out. According to Dan Reicher, Director of GoogleâEUR(TM)s Climate Change and Environmental Initiatives, âEURoeWeâEUR(TM)re staring at the biggest cliff weâEUR(TM)ve ever faced when the stimulus runs out in 18 months.âEUR

Financial support from the federal government, however, is only one piece of the puzzle and needs to be supplemented with stronger public policy. This was underscored by various speakers, including:

  • San Francisco Mayor Gavin Newsom who outlined the cityâEUR(TM)s cutting-edge environmental programs and pushed for state and federal governments to take the lead on ambitious projects such as the cityâEUR(TM)s tidal-energy initiative, which is expected to be the largest in
    California.

  • Diarmuid OâEUR(TM)Connell, Vice President of Government and Regulatory Affairs at Tesla, who noted that while the Obama administration is helping facilitate funding, the governmentâEUR(TM)s past performance has not been encouraging. âEURoeA lot of work needs to be done from the public policy side. From a historical track record, it may be seen as impossible, but that doesnâEUR(TM)t mean itâEUR(TM)s not the right thing to do,âEUR he concluded.

  • Tim Newell, Senior Advisor to the U.S. Renewables Group, who said that the effect of federal policies on the industry has been neutral to negative this year because of the uncertainty surrounding the regulations and the impact on investments. The outlook for 2010 is better with more stimulus funding being made available and other policies taking effect.

In terms of private capital, investment executives noted that the economic situation is improving considerably with money flowing back into equity funds, the IPO market reopening and more attention being paid to project financing. Key takeaways regarding renewable energy financing include:

  • The industry has always been driven by tax credits, but the types of financing structures and the key players have changed over the years. Today, the tax partnership structure is the dominant one, but the emerging industry players now include regulated utility companies and private equity funds, noted Jerome Peters, Senior Vice President and Managing Director of Project Finance for TD Bank North America.

  • The majority of funding is concentrated on proven technologies such as solar and wind power, which means newer technologies face funding gaps, said Jim McDermott from U.S. Renewables Group. Since venture capital cannot help companies as they move from the research and development phase to commercialization, it is important for early stage technology investors to consider how bankers will view risk when approached for project financing.

  • The markets are improving, but there is still more capital available than good deals or projects so only the top 10 percent of deals are currently being executed, according to Anup Jacob, Partner of Virgin Green Fund.

  • As a result, the financial community needs to think about non-traditional funding structures or multi-layered financing strategies that combine federal funds and private capital, said Nancy Floyd, Founder and Managing Director of Nth Power LLC.

  • Finally, while the boom times are certainly gone for the industry, the fundamentals have not changedâEUR"a good deal with an experienced team will certainly draw investors, remarked Matt Ferguson, Principal and Leader of Reznick GroupâEUR(TM)s Renewable Energy Practice.

"In order to effectively build the foundation of this new energy economy, we need all the relevant players at the tableâEUR"from governments to project developers to financiers and labor groupsâEUR"to accelerate deployment of capital into the technologies we know can scale to the challenge,âEUR said Dan Adler, REFF-West conference co-chair and president of the California Clean Energy Fund. âEURoeThis mission was echoed at REFF-West, the premier event connecting sophisticated financial industry players with California's centers of clean tech innovation, facilitating unusually rich discussions that will accelerate meaningful and long-term growth in our industry.

About REFF-West
REFF-West is the largest renewable energy finance conference focused on West Coast energy issues. It is hosted by the American Council On Renewable Energy (ACORE), a nonprofit organization headquartered in Washington, DC, dedicated to raising the profile of renewable energy, and Euromoney Energy Events, a London-based wholly owned subsidiary of Euromoney Institutional Investor PLC and organizer of conferences to address topical issues in the energy sector. For more information,
please visit http://www.reffwest.com.

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