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Question

Do you have insights on renewable financing and insights on crowdlending?

George Katilus IV's picture
Student Tufts University

Graduate Student @ Tufts University, Innovation and Management Business Development Intern @ Vineyard Power Cooperative

  • Member since 2021
  • 2 items added with 276 views
  • Oct 4, 2021
  • 276 views

Hello there,

I'm a graduate student who is investigating ways to combat climate change and exploring methods to accelerate the development of renewables projects in the United States. Through industry experience at a community power cooperative, I noted that project financing for small- to mid-level development projects is the largest pain point, next to regulatory barriers. There are currently numerous crowdlending platforms popping up in the European market for this type of financing and would love to chat with people who have given/received small- to mid-size project financing in the United States. Feel free to reply with insights, or contact info if I can get in touch with you!

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Hi George,

My consulting experience in the energy arena indicates that good, solid projects are easier to fund from a financial prospective.

1. Make sure you have at hand a great project. 
It provides a hefty internal rate of return (IRR) when the discounted cash flow considers a competitive power price (USD/MWh).

2. Look for power traders to make sure that there is market interest for the power made available by this project.
If yes, it makes sense then I would look for investors having already at hand power market prices, internal rate of return of the project and the required capital expenditure.

Whenever I was in a position to come up with a very consistent project, it was fairly easy to find investors! You need to show solid numbers, room for "safety margins", viable power prices ...then you are ready to look for investors!


 

George Katilus IV's picture
George Katilus IV on Oct 5, 2021

Thanks, Rafael,

 

What is your opinion on pooling together smaller investors/lenders to fund vetted projects?

Rafael Herzberg's picture
Rafael Herzberg on Oct 6, 2021

If you already have a good access to these investors/lenders that's a way to pursue, for sure! 

Some solar farms (a few MWs each) I know here in Brazil, have been developed this way. The developer and his friends "teamed up" and funded the project. 

They first closed a deal with the client (long term PPA - Power Purchase agreement) and then built the PV farm. Accordingly, every month thye are charing the energy the farm was deliveing to this client.

Actually they followed my idea of setting the power price as a % of the regulated rates published by the regulator for that specific location. By so doing, it was a win-win. The client was able to get a dicount on what would have to be paid to the local utility and for the investors/developer it was better than charging a fixed price (regulated rates are expected to rise well above inflation).

 

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