INDUSTRY I MARKET
2011. Despite this significant decrease in panel prices, many organizations still balk at the cost and complexity associated with financing and monetizing solar assets. This is especially the case now that programs like the highly regarded Section 1603 Federal Grant Program, which had simplified project financing and stimulated a good deal of investment in renewable energy, have expired, leaving many in charge of sustainability decisions uncertain about immediate financial benefits.
In fact, financing and monetizing solar assets could be considered the most difficult aspects of solar project development. This is particularly the case for small organizations with limited operating histories. The financial structures can be complicated and many companies lack the intricate understanding to monetize tax credits and depreciation benefits needed in a post-Section 1603 Federal Grant
Program environment. In addition, while Power Purchase Agreements (PPAs) have grown in popularity, the challenges associated with negotiating, structuring, and financing these deals can frustrate potential customers.
Too many people at the party A lot of the friction and lost dollars in present day deals can be attributed to the inefficiency of dealing with multiple third-parties throughout each phase of solar development. Most traditional models require a partner for development, a different one for finance, another for installation, etc. Each of these groups brings their own set of advisors, motivations and baggage to an installation, only complicating matters further. It’s like the old saying goes – there are just too many cooks in the kitchen. These non-equipment,
non-labor costs can pile up fast. This is especially the case when it comes to the legal aspects of more complex financial structures. Successful projects require an ability to navigate and negotiate with teams of attorneys representing multiple constituencies. Lack of efficiency can result in delays and legal costs that can quickly erode project margins and returns.
So, while panel and equipment prices have decreased, arranging permits, accounting, appraisals, legal counsel and audits for multiple parties are now the
Issue V 2014 I
www.solar-international.net 21
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80