3 wishes for SPI Conference next week

Posted by Tim Buchner    October 17, 2014

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This will be my fifth year in a row attending the Solar Power International (SPI) conference. This year, I hope to see solar industry preparing for a tidal wave of continued growth.

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Big Opportunity for Solar in US schools

Posted by Haresh Patel    October 17, 2014

On September 18, The Solar Foundation released ‘Brighter Future: A Study on Solar in U.S. Schools’. Analyzing 125,000 schools, the study found that there are roughly 72,000 schools that could save money by implementing solar. Today, only 3,727 schools have done so. This means that about five percent of the potential market has been tapped.

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Do We Really Need ITC at 30 Percent?

Posted by Haresh Patel    October 13, 2014

Last week I had the privilege of representing Mercatus in Washington DC at a working group hosted by the White House called ‘Innovations to Drive Increased Capital Flows into the Solar Market’. Leadership from major solar developers, investors, and government agencies convened to discuss 1. Growing the primary solar market, and 2. How a young industry like solar could accelerate development of a secondary market. Despite this lofty agenda, concerns about the step down of the Investment Tax Credit (ITC) from 30% to 10% in 2016 seemed to permeate the entire conversation. My perspective on the issue was only shared by a few…

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Everything You Need to Know About Commercial Solar in 2014

Posted by Haresh Patel    October 6, 2014

As the costs of financing commercial solar projects decrease, many businesses gain from integrating a cheap, clean, predictable source of energy into their operations. Just ask some of the US’s biggest companies like Walmart, Costco, Kohl’s, Apple and IKEA who are all leading in the utilization of commercial solar to improve their own bottom lines.

By providing solutions that reduce the costs associated with financing solar projects to roughly 60% of the US commercial and utility solar market, Mercatus has gained a unique overview of the industry. In the North America Solar Trend Report for first half of 2014, we summarize our perspective based on data from over 2,500 actual solar projects of more than 50 investors and 300 developers in the US commercial and utility solar sector.

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REFF West: The Future of Technology in Energy

Posted by Haresh Patel    September 23, 2014

Technology is creating powerful new opportunities to accelerate the financing, development and distribution of renewable energy. Recently, at the Renewable Energy Finance Forum West, I co-moderated a dynamic panel that shared their views on how technology will impact renewables.

My co-moderator for the panel - Nicholas Eisenberger of Pure Energy Partners - brought up an interesting fact about the recent evolution in technology. He said that the amount of processing power you could buy for $1000 in 2003 was the equivalent size of an insect’s brain. In 2010, it was the size of a mouse’s brain. And today you can buy the processing power of the entire human race. That’s a mind-boggling statement, but it accurately reflects just how far technology has come in a very short amount of time.

There were three underlying themes that the panelists discussed.

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The Fight for Low-Cost Capital Part III: MLPs

Posted by Haresh Patel    September 19, 2014

In the previous two parts of this series, we talked about how important it is to get your process right now so you can properly leverage new opportunities to raise capital. One of those opportunities - yieldcos, discussed in Part I - is already here. Companies are spinning off yieldcos to invest in new projects and refinance high-cost capital.

The second new capital mechanism - REITs, discussed in Part II - may be here soon. President Obama nudged the door to REITs open by allowing them to invest in certain solar assets. If some legislators get their way, the door could soon be blown open and REITs could be allowed to invest in all types of solar equipment and projects.

A third capital structure is also on the horizon. It is known as an MLP, master limited partnership, and it has been around since the early 1980s. An MLP is structured as a partnership to give owners significant tax benefits. However, they can be traded on a public exchange just like a corporation.

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3 Best Practices for Energy Investors to Get the Most Out of Your Data

Posted by Haresh Patel    September 12, 2014

Everyday you collect thousands of points of data. From transactions that you close to those that fall through the cracks, there’s data to be collected. Even conversations with prospects, clients, and competitors offer opportunities to collect valuable information.

Of course, if you don’t collect the right data.. “data is garbage in garbage out.” It also doesn’t have much value if you don’t do anything with it. Regardless of industry, successful companies know how to collect the right data and get the most out of it and translate it into information. They parse information for valuable insight and then they turn that insight into action. Information and insight is worthless, unless it has the power to change a decision.

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The Fight for Low-Cost Capital Part II: REITs

Posted by Haresh Patel    September 2, 2014

In part I of this series, we talked about how it is now more important than ever for solar companies to position themselves to leverage new opportunities for capital. The companies that are best able to efficiently deploy capital, close deals, and return cash flow to investors will win the fight for capital.

As discussed in part I, yieldcos represent the best current opportunity for low-cost capital. However, new opportunities lie on the horizon. Perhaps one of the most exciting is the real estate investment trust. Long used as a way to raise capital in the real estate industry, REITs are gaining steam as renewable energy capital mechanisms.

What is a REIT?

A REIT is a type of company that invests primarily in real estate for the purpose of distributing income back to its owners. REITS were created by Congress in 1960 to encourage large-scale investments in commercial and income generating properties. Today, all REITS either invest in or manage real estate or invest in or underwrite mortgages for people to buy real estate.

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3 Best Practices For Investors in working With Solar Developers

Posted by Haresh Patel    August 29, 2014

Does this sound familiar? You and a developer reach a deal on a project. Everything looks good. You have the pricing in place. The project appears to be shovel-ready. You’re ready to close the deal and move on to the next one.

Then everything changes. After doing their diligence, the analysts and legal team tell you that the pricing doesn’t line up. The project either needs to be renegotiated or dropped. Now, instead of closing a deal, you’re figuring out how to save it.

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4 Important Lessons Solar Companies Can Take From The Mortgage Industry

Posted by Haresh Patel    August 22, 2014

One of the benefits of being in a relatively young and evolving industry is that we can learn from more established industries and apply those lessons to our own processes.

The mortgage industry is a great place to look for guidance. Here are four key takeaways that solar companies can put in practice to increase automation and streamline their efforts:

Disciplined processes. The most successful mortgage companies have extremely defined origination and underwriting processes in place. Each person in the process has a specific role and they only do the tasks assigned to that role. There’s no ambiguity or uncertainty around what each person’s tasks are to move the application towards closure.

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