ACORE’s US PREF releases analysis on the impact U.S. policy has had on renewable energy investment and provides a snapshot of the road ahead, including new and innovative financing mechanisms for the industry.
Washington, D.C., April 24, 2014–Today, the US Partnership for Renewable Energy Finance (US PREF), a program of the American Council On Renewable Energy (ACORE), released a white paper entitled "Renewable Energy Finance, Market & Policy Overview" that aggregates the numerous policy mechanisms affecting renewable energy projects in the U.S. and provides an analysis of the impact these policies have had on private sector investment in the industry. The white paper also looks at innovative financing mechanisms the industry has recently developed including Securitization, YieldCos, and Green Bonds.
“In the past 10 years, over $300 billion has been invested in the U.S. renewable energy sector,” stated Michael Brower, CEO of ACORE. “This investment has had a significant impact on economic development in the U.S., creating hundreds of thousands of jobs in the sector.”
“Federal tax policy has worked, stimulating strong private investment in the past several years and significant system cost reduction, with wind down 43% and solar down 80% since 2008,” stated Todd Foley, SVP for Policy and Government Relations at ACORE. “However, lack of policy certainty puts new investment and market momentum at risk.” While capital markets are strong, new investment in renewable energy fell by over 33% from 2011 to 2013, signaling a significant amount of private capital that has been sidelined as a result of an uncertain market.
Despite this policy uncertainty, the industry has developed important finance innovations including the YieldCo, Green Bond, and Securitization finance structures. A successful YieldCo, NRG Yield, Inc., raised almost $431 million in its initial public offering in July 2013. NRG Yield is a unit of NRG Energy Inc. with 1.3 GW of solar and wind generation. The PREF analysis provides success stories and further details on all three of these mechanisms.
“The success of the YieldCo, Green Bond, and Securitization structures shows the resiliency of the renewable energy finance market,” stated Timothy Kemper, US PREF member and National Co-leader for the Renewable Energy Industry Practice at CohnReznick. “New finance structures, coupled with policy certainty, will enable a strong, diverse market to see increased private sector investment and growth in U.S. renewable energy infrastructure in the coming years, contributing to economic development and job creation.”
US PREF Analysis: “Renewable Energy Finance, Market & Policy Overview” can be downloaded here.
ACORE, a 501(c)(3) non-profit membership organization, is dedicated to building a secure and prosperous America with clean, renewable energy. ACORE seeks to advance renewable energy through finance, policy, technology, and market development. Additional information is available at www.acore.org.
ABOUT US PREF:
US PREF is a coalition of senior level financiers who invest in all sectors of the energy industry, including renewable energy. Members educate the public sector to assure renewable energy finance legislation impacts the market as efficiently and effectively as possible, with the goal of helping to unlock capital flows to renewable energy projects in the United States. US PREF is a program of ACORE. Additional information is available at www.uspref.org.