Connective Tissue: Linking Investors and Developers Together More Efficiently
Posted with permission from the National Renewable Energy Laboratory (NREL). This NREL article/blog is not to be used to promote any commercial product or service or to imply an endorsement regarding the same by NREL or the U.S. Department of Energy.
Accessing capital to support renewable energy project development is a complex and time-consuming process. Finding investors who are comfortable with the technology, off-taker, and other project-related tasks can be a daunting task, akin to a brain surgeon going door to door looking for customers.
Fortunately, new tools enable investors and developers to find each other more quickly and at lower costs. And without door-to-door sales. The following describes several tools available to the renewable energy community for acquiring capital and investment opportunities.
The American Council on Renewable Energy (ACORE) and Clean Energy pipeline, a division of VB/Research Ltd., recently announced the launch of the Renewable Energy Finance and Investment Network (REFIN). According to the website, REFIN is “a subscription based tool that connects suppliers of capital and expertise with renewable energy project developers, entrepreneurs, and industry participants.” Subscription rates range from $150 per year to use the database to $300 per year to be a “listing” member. Early listing members of REFIN include Citigroup, Hudson Clean Energy Partners, and Deutsche Bank.
Solmarket is another online network connecting renewable energy development and financing entities. SolMarket was implemented by SolSystems, a development firm. Taking a different tack than REFIN, SolMarket specifically matches projects in need of capital and investors seeking investment opportunities. According to the website, “SolMarket facilitates transactions among investors, developers and engineers in the solar community through a streamlined origination and finance process.” SolMarket also provides standardized documents, modeling software, an automated financial pro forma, and a mechanism to manage all your contracts and other documents across multiple projects. Developers can create a user profile and register their projects for free. For investors, SolMarket charges a fee that for certain services that, according to the website, are “based on a specific project size, project type, etc.”
The United States Green Investment Network also links entrepreneurs and investors together, but expands the collaboration to energy efficiency projects, pre-commercial technologies, and environmental clean-up or emission reduction technologies. The network boasts over $162 billion in capital available for investment. According to the website, “[t]he Green Investment Network offers dealflow to investors looking for 1) green investment opportunities, and 2) carbon offset investments. The Green Investment Network offers investors direct access to the entrepreneurs, ideas, and resources that are building the U.S. and Global Green Economy. “Exactly what is meant by “direct access” is unclear, but the potential to link entrepreneurs and investors to enable product and project deployment could be highly valuable for the right parties. It’s free to upload your project information to the Green Investment Network for 90 days, but connecting to an investor will require a $199 “contact fee.” An additional $50 will buy “other services designed to enhance your investment proposal listing, increase its exposure on our site, and allow you to track that exposure.”
As these networks proliferate, entities seeking business partners may need to join more than one and continually refresh their search parameters and project status. Nonetheless, these newly devised networks represent a significant improvement in the communications among renewable energy developers and investors, and should ultimately speed up the project deployment process. Communications is, after all, the connective tissue that keeps industry humming.
Michael Mendelsohn is a Senior Analyst with the National Renewable Energy Laboratory’s project finance team and oversees the portfolio of solar photovoltaic and concentrated solar power analysis. His expertise spans 20 years and encompasses various aspects of renewable energy technologies, markets, policies, and finance.