emerging markets that are
not an issue in developed
regions, Schub said.
We have to look at “matters
like currency risk for foreign
investments, or the fact that in
many markets, utilities are not
creditworthy offtakers. Having
a PPA (power purchase agreement) with the utilities doesn’t
make a project bankable in
some countries,” he said.
Other Financing Trends
Corporate power purchase
agreements (PPA) have
become an important seg-
ment of the fnancial solu-
tions advancing renewable
energy development. They are
increasingly used by global
corporations — many U.S.-based — wherever they have assets.
Roberto Rodriguez Labastida, senior research analyst—ener-
gy, for Navigant, says the use of PPAs likely will grow, but we will
see a ceiling in the segment soon.
“Corporate PPAs will fatten,” he said. “Most of the corporates
have put their green targets in
place, and most of those targets
were put in place thinking that
energy costs would continue to
rise, and that perception now
He said that corporations
didn’t realize there were strong
trends in cost reductions for
“I think now those trends are
well-understood within corporate energy groups, so they will
not rush to put products in place;
they will go for the right structure for the right time to do it,”
In the U.S., solar fnancing
frm Open Energy is helping the
commercial and industrial sec-
tor increase its use of low-cost
solar power by standardizing loan processes for applicants.
The company has built an online fnancing center to make
funding more accessible for borrowers, according to Open Energy
Founder Graham Smith.
Open Energy’s customers are solar developers, who build and
own solar installations at universities, schools, hospitals, or industrial companies, and establish PPAs with the project host.
“Because they make that [PPA] commitment, it allows groups
like [Open Energy] to fnance that commitment,” Smith said.
“We can provide a loan and know that it’s going to be paid back
throughout that period.”
Open Energy’s online portal stores and collates information that
was traditionally handled manually, through repetitive paperwork
processes, according to Smith. The portal makes the application
process “cheaper and easier” for the borrower, he said.
Across the spectrum of those fnancial mechanisms that have
Marchlyn Mawr reservoir, the high level water source for Dinorwig
power station, a closed-loop pumped storage hydro facility in north
Wales. Credit: Hefin Owen, Flickr.