How technology adds value for clean energy investors

Reposted from FinTek News, published 4/4/19.

CleanCapital Solar Tech
Solar Tech

CleanCapital is sometimes described as a fintech company. While I’m not sure that label really suits us, it’s certainly true that my experience with fintech provided the ‘light bulb’ moment that led to founding CleanCapital. Today, technology underpins all that we do.

Clean energy assets present enormous opportunity.

Renewable energy is at a ‘hockey stick’ moment for worldwide growth. Bloomberg New Energy Finance projects that $11.5 trillion will be invested in new power generation capacity between 2018 and 2050, with $8.4 trillion of that going to wind and solar and another $1.5 trillion to other zero-carbon technologies like hydro and nuclear.

Why are investors so bullish on renewable energy? Clean energy sources will make up 80% of the world’s new energy capacity through 2050, with renewables providing at least 50% of the world’s electricity that year. That creates enormous opportunity for infrastructure investment. Investors looking to add real assets to their portfolios are drawn to solar, wind, and storage generation for a number of attractive attributes. Renewable power infrastructure portfolios boast stable cash flows, low volatility, diversification of risk, and alignment with investors’ ESG goals.

But barriers to entry pose challenges for investors.

Despite growing demand for these investment opportunities, the complexity of clean energy deals has historically kept investors away.

As an attorney working on landmark clean energy financing deals, I saw how the lack of standardization in contracting, regulations, and diligence made it near-impossible to invest in distributed clean energy assets at scale. Having seen how fintech was streamlining other industries, like student loans, I sensed an opportunity to leverage technology to simplify the process and enable more investors to buy in.

Any given clean energy acquisition is comprised of close to a hundred documents; multiply that by the ten, 20, or 60 projects that make up a single portfolio and you’ll get a sense of the organizational issue at hand. A buyer often works with five to ten parties in addition to the seller to close an acquisition, so project management and communication are also a challenge. We envisioned a technology-based solution that would organize information and process flow.

Our tech-based solution will power the transition to a clean energy economy.

Today, our leading edge platform enables us to underwrite, diligence, and manage renewable energy portfolios efficiently. The response from the market has been robust; industry leaders, including BlackRock, rely on our platform capabilities to meet the demand for clean energy investment and deliver value to clients. Going forward, I envision greater adoption of technology, including data analytics, in all facets of clean energy investment to underpin the dramatic growth of these resources around the world.