Clean Energy Finance

Finance Solutions at the State, Regional and Local Levels

Developing solutions to funding and finance challenges is key to expanding clean energy markets. Clean Energy Group works to accelerate clean energy economic and community development at the state, regional, and local level through new learning networks of key public finance officials.

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Clean Energy Group’s financing work is focused on supporting the deployment of solar+storage systems throughout building portfolios through partnerships with low-income housing developers, solar companies, city officials, federal agencies and financial institutions. We do this by developing new financing approaches and funding resources to accelerate project development and attract new investment for clean resilient power in low income communities for housing and community facilities, as well as for small and medium size businesses and entrepreneurs to build out the resilient power infrastructure.

Market Development through Integrated Development Finance

The goal of this work is, through access to well-structured financing resources and other support, to obtain commitments for portfolios of resilient power projects from housing developers and others. Flexible financing on commercially reasonable terms, together with smart incentives and technical assistance, are needed for an integrated development finance approach that will accelerate the growth of this early stage market.

This work involves:

  • Identifying key project finance risks and addressing financing gaps.
  • Structuring credit enhancement to create a low cost source of debt capital for national development finance entities that project developers can use for affordable housing and community projects—and that entrepreneurs can use to build out their services in low income communities.
  • Working to create aggregated credit facilities for securitized financial transactions to scale project pipelines.

Filling Project Pipelines

To help build project pipelines, Clean Energy Group works with project developers by providing technical assistance and small grants to pay for third-party technical services and predevelopment costs associated with resilient power projects. This work strives to secure commitments for portfolios of resilient power projects from housing developers, cities and others. Our Technical Assistance Fund (TAF) grants pay for technical and financial analysis of potential projects and can be used for predevelopment costs for resilient power systems installations.

Leveraging New Capital Investment

The Resilient Power Project‘s focus on finance issues builds on Clean Energy Group’s earlier work about the critical role credit enhancement plays in attracting new sources of capital investment. That was explored in Reduce Risk, Increase Clean Energy. A thorough review of the clean energy and green bond markets, and the demand characteristics of the various segments of institutional investors, was discussed in What Investors Want.

Clean Energy Group is using this experience to propose foundation program-related investments (PRIs) structured as credit enhancement to attract new sources of impact investment for solar+storage projects and enterprises. There are a wide range of credit enhancement strategies, including guarantees, subordinated debt, loan loss and debt service reserves and interest rate buy-downs. Credit enhancement mitigates many of the uncertainties and credit risks associated with new technologies such as solar+storage. It is an essential tool for attracting flexible, lower-cost capital to this early resilient power market.

Through these finance efforts, many more projects will be completed and greater standardization will occur over time in regard to deal and finance terms and documents. This is essential in order to reduce costs for project developers and to bridge the way to easily accessible, low-cost, long-term institutional capital.

Latest Blog Posts

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At the end of 2016, the clean energy trade press was filled with upbeat stories about various renewable energy technology breakthroughs, cost reductions, and tipping points. But, if there’s one energy problem we did not solve last year, it is equity.

Resilience for Free: Protecting Vulnerable Communities

Clean Energy Group, through its Resilient Power Project, has released a new report analyzing the economics of resilient solar PV and battery storage (solar+storage) systems for multifamily affordable housing.
3dfoto/Bigstock.com

Financing Clean Energy for Climate Adaptation

A new report by Clean Energy Group proposes bundling loans for resilient power projects, such as solar PV with battery storage, to get this clean energy market to scale.
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