Episode 45: Michael Terrell

Head of Energy Market Development at Google

This Earth Day, let’s celebrate corporate leadership on clean energy

You might be surprised by who’s currently leading the charge in the commercial solar market.

As we head into Earth Day weekend, it’s easy to get caught up in the attacks on clean energy. There is no question that federal tax reform, the International Trade Case and withdrawing from the Paris Climate Treaty created a year of uncertainty for the U.S. solar industry. Despite these obstacles, there are a lot reasons to remain optimistic regarding our clean energy future. I continue to be inspired by the leadership of major corporations like Google, Apple and Microsoft, who according to latest Solar Means Business report from the Solar Energy Industry Association are major contributors to 3 Gigawatts of installed solar in 2017.

Earth Day was founded nearly 50 years ago, and within the first decade President Carter put solar panels on the White House roof. But for nearly 3 decades following that the industry barely grew. Now, the latest Market Insights Report released last month continues to demonstrate the resiliency of the industry as costs continue to decline and investments continue to rise. It should come as no surprise that the industry continues to grow. We need to be celebrating this for Earth Day!

SEIA Solar Means Business

As of the end of 2015, there was nearly 25 GW of solar PV installed in the United States. In the last two years, the solar industry has more than doubled its total installed capacity to 53.3 GW. And the industry is on track to more than double over the next five years. That means an average of over 15 GW of PV capacity will be installed annually in the U.S. between now and 2023.

A changing financial landscape

The Commercial and Industrial (C&I) solar markets (representing 80% of non-residential pv) remain a still untapped opportunity for continued market growth. While, the non-residential sector grew 28% year-over-year, this was primarily driven by regulatory demand pull-in from looming policy deadlines in California and the Northeast, in addition to the continued build-out of a robust community solar pipeline in Minnesota.

Unfortunately, project finance remains a challenge for the C&I market, but there continues to be innovations addressing these soft costs. Last fall, SEIA released a white paper examining Commercial Property Assessed Clean Energy (C-PACE). C-PACE a allows a property owner to finance 100 percent of the cost of solar and/or energy efficiency upgrades as a voluntary property tax assessment on a commercial building for 10-30 years.

In addition to new C-PACE opportunities, the financial landscape continues to evolve to bring new capital into the market. CleanCapital is at the forefront of this financial revolution. We are changing the paradigm by bringing liquidity to a historically capital inefficient clean energy marketplace. To date, we’ve acquired nearly $100 million in operating solar assets across ten US states consisting of high-quality school, universities, and government facilities.

CleanCapital Acquisitions Through 2017

Will investors join corporations and pave the road to 100+ GW of U.S. solar?

As demonstrated in the latest Solar Means Business Report, the private sector remains committed to a clean energy future, but very few institutions have invested. To ensure that we remain on track, we need to empower institutional investors with information that helps them understand clean energy investments and the underlying risk. Earlier this month, CarVal Investors partnered with CleanCapital to pursue $1 billion in clean energy investments. CarVal is forging the path for other investors to tap into the distributed energy markets.

Our proprietary technology platform identifies, screens, and manages clean energy projects enabling project owners an opportunity to exit their portfolios while providing investors unique access to the clean energy investment market. We’re excited to provide capital to cash strapped project and cash flowing assets to potential investors and in the process fund the journey to 100+ GW of U.S. solar.

Interested in learning more? Let us know.

Innovative and Resilient: Global Clean Energy Economy is Unstoppable

This post was co-authored by Jon Powers and Zoe Berkery.

Good news! Despite a range of uncertainties in 2017 and the beginning part of 2018, clean energy remains a strong economic driver with untapped investment opportunity. Clean energy investments are high, the private sector continues to be a driving force, and corporations are demanding clean energy at unprecedented levels.

There are a lot ways to look back at 2017 when it comes to clean energy and the economy. There were many uncertainties facing the industry in 2017 that challenged the clean energy markets in new and unforeseen ways, however a recent report from the Business Council for Sustainable Energy (BCSE) and Bloomberg New Energy Finance (BNEF), the Sustainable Energy in America Factbook demonstrates how innovative and resilient the global and domestic clean energy market remains.

As pointed out by a recent Wall Street Journal article, action by the Trump Administration like “tariffs may slow the rate of solar expansion, local and state policies requiring utilities to procure renewable energy will continue to help create a baseline market for solar power”

Clean Energy is an Investment Opportunity

Clean energy is maturing as an asset class ripe for investment. With 18.4 GW of global clean energy deployed in 2017, it’s not a surprise that more and more institutional investors continue to be drawn to these stable, long term cash flows. As a result, global clean energy investment rebounded in 2017 to the second-highest amount on record. In total $333 billion was invested in the sector in 2017, second only to the $360 billion spent in 2015.

Private Sector and Localities Back Clean Energy

The federal government may have backtracked from national and international engagement on climate change issues in 2017, but the private sector companies showed a united front regarding their commitment to address climate change.

After the President indicated the U.S. would withdraw from the Paris Treaty, the “We Are Still In” movement responded with 2,642 mayors, governors, CEOs, college presidents, faith organizations, tribal leaders, and other small businesses (including CleanCapital) with renewed commitments to address climate change and reduce emissions. Similar initiatives like the U.S. Climate Alliance, includes 16 governors representing over 40% of the U.S. population and $7.4 trillion in economic output.

Federal-level actions posed a number of threats to the clean energy economy beyond Paris,  from trade cases to tax reform, the market was rife with uncertainty. Despite these policy uncertainties, the clean energy market expanded rapidly in 2017, demonstrating the industry’s resiliency. For example, according to the BCSE Factbook, wind and solar capacity in the US has increased more than 471% since 2008 (from 25 GW to 143 GW). Renewable generation soared 14% in 2017, adding 18.4 GW of capacity, now accounting for 18% of total U.S. generation—double the contribution a decade ago.

US Electricity Generation by Fuel Type

Corporations Demand Clean Energy

The Factbook also highlights that corporations continue to play an increasingly powerful role in the global energy transformation, demanding cleaner energy and seeking to capture savings from energy efficiency efforts. In the US, off-site corporate clean energy contracts rose to 2.9 GW in 2017, second only to the surge seen in 2015. Some of the world’s largest corporations now have ambitious clean energy goals, including Google, Apple and Facebook which continue to contract more clean energy. Kimberly-Clark, T-Mobile, General Mills and Cummins all signed their first clean energy contracts in 2017.

Renewable Capacity Contracts by Corporations

Source: 2018 Sustainable Energy in America Factbook

In addition, renewables increasingly just make better economic sense. New solar PV plants can now undercut new coal builds on a levelized cost of energy (LCOE) basis in the U.S.  LCOE measures the lifetime cost over the lifetime energy production of a system, plant or technology in order to more fairly compare costs of various types of energy technologies. In other words,  LCOE is a summary measure of the overall competitiveness of different generating technologies.

LCOE is a summary measure of the overall competitiveness of different generating technologies

Source: 2018 Sustainable Energy in America Factbook

The bottom line is clean energy is here to stay and will continue to grow. These reports show that it is no longer an alternative energy, but a mainstream source of power. Now more than ever before it is going to be incumbent upon innovators to overcome the new challenges imposed by the federal government. CleanCapital is working to be a key player in this global clean energy transformation to more efficiently originate and invest in the clean energy infrastructure that is so critical to the future of the global economy.

See the whole 2018 Sustainable Energy Factbook here.

Episode 12: Kate Brandt

Lead for Sustainability at Google