Cash is King in Renewable Energy Development

CleanTech Blog
Friday, September 18, 2009

It is a buyer’s market for those developing large wind, solar, bioenergy, biofuel, and other renewable energy projects. In 2009, land is less expensive , equipment cost less, deliveries are faster, and warranties longer. It is a buyer’s market if you have cash, yet it continues to be a difficult time to secure debt financing. This message was consistent from the majority attending the FRA Renewable Energy Finance and Investment Summit this week. I chaired the renewable fuels track and had a chance to talk with a number of developers and financers of renewable energy and fuels.

Demand for renewable energy is at a record high as U.S. utilities in about 30 states struggle to meet RPS (renewable Portfolio Standards). These utilities want to sign PPA (Power Purchase Agreements) for 5 to 20 years of wind power, solar, bioenergy, geothermal, and other renewable production. In the future, to meet targets these utilities may need to directly develop, own, and operate these RE plants. Many would need PUC (public utility commission) approval to make this part of their business model.

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