INDUSTRYFINANCIAL


Benchmarking report announced


Solar energy subsidies are appearing all over the globe and local areas often dive into the excitement rather than take a breath before entering the swim towards soalr energy. An Australian research report released on benchmarking for funding that identifies and examines funding models for solar research, development and demonstration (RD&D) activity.


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aker & McKenzie’s report entitled “Global Benchmarking Report – Solar


RD&D Funding Sources and Models” identifies a range of funding models used to support solar and renewable energy RD&D internationally. In addition to grant funding models, these include venture capital-style funds, loans and equity, loan and performance guarantees. The report examines each model and assesses it against a set of criteria to determine its applicability to the Australian solar RD&D landscape. A key feature of the report is the extensive use of case studies to illustrate the variety of funding models in use internationally.


The launch of the report comes only days after the announcement of a new partnership between the United States and Australia to pursue joint solar energy research with the aim of making solar power competitive with conventional energy sources. The partnership was announced by Prime Minister Julia Gillard and US Secretary of State Hillary Clinton in Melbourne.


The ASI is a $150 million Australian Government initiative to support solar R&D in Australia and forms part of the Government’s $5.1 billion Clean Energy Initiative. One of the ASI’s strategic focus areas is the promotion of Sustained Investment in Solar Energy Innovation in Australia, and as part of this work the ASI and Baker & McKenzie have been working together to examine new ways in which solar energy technologies may be funded through the innovation chain, to complement existing financing mechanisms.


The financing of solar RD&D carries unique risks and attracts diverse investors. Significantly, the R&D and demonstration components of solar RD&D differ in important ways. Solar technologies at the R&D stage in the innovation cycle face relatively long timeframes to market readiness,


while technologies at the demonstration stage have a comparatively short commercialisation horizon but require greater funding in order to finance capital-intensive demonstration facilities. Consequently, each will be better suited to different types of finance and attract different investors, and may equally require different public funding and incentive structures to attract necessary capital.


ASI Research Investment Manager Olivia Coldrey said, “the ASI’s current funding model certainly allows us to keep Australia at the forefront of solar energy R&D in the medium term but we are looking further out, to support the continued growth and development of Australia’s solar sector. The report represents an important piece of thought leadership as part of the global effort to catalyse increased public and private investment into the development and deployment of solar energy technologies, and we’re delighted to work with Baker & McKenzie in seeking to advance solar energy innovation in this way.”


Speaking about the completion of the report, Baker & McKenzie Partner Paul Curnow said, “the findings of this report stem from significant and ongoing engagement with our global and domestic clients. Our significant global renewable energy and clean technology expertise has enabled us to identify a broad range of funding models from around the world, and to assess which of those might best be adapted to support solar RD&D in Australia. This is the first time that such a report has systematically reviewed and analysed different funding models for solar RD&D. Not only will these results be of interest in this country, but will have applicability beyond Australia and be relevant to policy makers and investors into solar around the world.”


© 2010 Angel Business Communications. Permission required.


www.solar-pv-management.com Issue X 2010


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