Over the past four years, we have seen tremendous progress in the development and deployment of renewable energy technologies that should give us all hope that America can lead in the global clean energy economy. These technologies are helping to create new jobs and new industries domestically, while reducing carbon pollution and helping to address the challenges of climate change.
Want more reasons to be optimistic about driving progress in the development and deployment of renewable energy? Just look at some of the most significant challenges we face -- and how easy it could be to overcome them. While the technological advances are exciting, there is also important work to do in the other aspects of clean energy, particularly as it relates to financing. For a variety of reasons, including provisions in the tax code, it can cost over 10 percent more to finance a renewable energy project than it does a traditional energy project. But with a few small changes in how we finance renewable energy projects, we can help to make it easier and more affordable to bring clean energy to families and businesses nationwide.
A few things to keep in mind:
1. Renewable energy is reliable, the technologies work, and costs are dropping dramatically. Deploying the technologies globally and at scale has helped costs to decline far faster than almost anyone could have anticipated. Solar costs, for example, are down more than 75 percent over the last four years. As Neil Auerbach of Hudson Clean Energy put it, "renewable energy is the only energy source that gets cheaper the more it is deployed."
2. As the industry gets to scale, the importance of reducing non-hardware (or so called "soft costs") becomes increasingly important. In the case of solar, equipment costs now account for just 46 percent of the total costs of an installed system, with 54 percent of the total coming from everything else, including installation, financing, insurance and permits. There are ways to bring these soft costs down that don't require major technology breakthroughs. That's why the Energy Department is partnering with industry to look at everything from standardizing building permits to construction techniques to new insurance products to do just that.
3. Helping to expand access to and reduce the cost of financing projects is a critical step in significantly reducing overall project costs. Renewable energy projects in the U.S. rely upon an old-fashioned, antiquated form of financing that's different from how other parts of the U.S. economy are financed. Rather than using bond or stock markets, projects depend on non-capital markets sources of investment, like banks, where the cost of capital can approach typical private equity rates of return of 12-15 percent. The Energy Department has been pursuing multiple avenues to help expand capital markets financing for renewable energy that could potentially halve the cost of accessing equity capital and drive down other costs of financing as well. Again, these reductions in costs don't require going to the lab; they involve applying financing techniques that are widely used in other parts of the economy, but have not yet been applied to this sector.
4. In addition to deploying cleaner sources of energy, we can achieve dramatic reductions in carbon pollution by investing in cost-effective energy efficiency improvements. Financing is a key constraint here as well, since lenders are not certain that investments in efficiency will either work as advertised, whether the borrower will save or spend the savings, or whether the building will be worth more after the investments have been made. Additionally, a lack of standardized contracts makes it difficult to bundle small projects into securities that would attract the interest of institutional investors. Despite these difficulties, we are working with industry and other stakeholders to find solutions to these contracting and data challenges. And like with renewable energy, we can be optimistic because technology isn't the binding constraint - it's about finding ways to mobilize proven financing instruments that already exist elsewhere and applying it to this growing global sector.
5. If we begin thinking about energy projects as financial assets, as well as energy assets, we can help to encourage additional, smart investments in these industries. Currently, renewable energy and energy efficiency projects offer investors something that, between a volatile stock market and low interest rates, is very difficult to find: current yields.
Basically, we have an asset-liability mismatch. The banks and non-capital markets that are currently the primary financiers in the renewable energy sector are generally looking for short-term yields. Renewable energy projects, however, are typically longer-term investments that provide stable returns over long periods of times (15 or 20 years, for example). Longer-term investments like these are very appealing to pension funds or insurance companies that need long-term yields to match their long-dated liabilities. However, because renewable energy projects currently aren't able to seek investment in capital markets, new classes of investors who want to invest in renewable energy projects can't. Fixing this mix-match would reduce financing costs for projects, further reducing the overall cost of clean energy. That's good for investors, good for project developers, and good for American consumers.
6. We can be optimistic because most Americans support investments in clean energy. This includes strong bipartisan support for clean, renewable energy at the state level, with over a dozen states currently developing their own clean energy finance entities.
But while reasons remain to be hopeful about the progress of the industry, there are serious headwinds that could have a significant impact on America's clean energy industry, and we cannot be complacent. We are making gains globally in the clean energy race, but much of that progress is due to government programs and support that are coming to an end. In fact, 75 percent of U.S. government support programs -- including the 1705 loan guarantee program, the 1603 program to provide tax grants in lieu of tax credits and the Production Tax Credit -- have expired or are set to expire soon.
Throughout our country's history -- from aviation to agriculture, from biotechnologies to computer technologies -- the federal government has supported the private sector to keep the United States at the technological forefront of important industries. To seize the clean energy opportunity, we must do so again - and we must act now.
Around the world, countries recognize that renewable energy represents one of the biggest economic opportunities for the global economy. There are some in Washington, however, who think we can't compete with other countries, who think that we have already lost the clean energy race.
I can tell you firsthand, the clean energy industry in the U.S. is able and prepared to produce real energy for American consumers.
By combining America's historic leadership in technological and manufacturing innovation with improvements in how we finance renewable energy and energy efficiency projects across the country, we can once again lead the world in this critical sector.
Stefanie Penn Spear: Kenny Loggins and Gary Burr Share Their Passion for the Environment
Lots more on how OTEC works at The On Project.
http://www.theonproject.org/otec/?utm_source=huffpost&utm_medium=web&utm_campaign=mscomment
Natural gas is "our" energy source that can be consumed to almost 100% energy efficiency. Natural gas can be consumed so efficiently that COOL exhaust will be vented into the atmosphere.
Natural gas can be consumed so efficiently that the WATER can be recovered from these combusted exhaust gases, and this clean, distilled water is very usable.
The technology of Condensing Flue Gas Heat Recovery is designed to recover almost all of the heat energy out of the waste exhaust gases. This recovered energy can then be used back in the building or facility as space heating, or heated domestic or process water, or at a university or hotel to heat the swimming pools.
America wants to reduce global warming? Reduce CO2 emissions. Conserve water?
Be more competitive with the world in manufacturing. We have an advantage with cheap natural gas.
It is time to educate our governments and industries that what natural gas energy is not wasted today, will be there to be used another day.
Lobbying to prevent action on Chinese dumping was not paid for by Chinese interests either.
The green energy industry is being targeted.
Pretending like they aren't already spending over a billion per year to trash green energy and prevent government action is head in the sand folly.
• Project size shouldn't be less than $50 MM (USD)
• Annual percentage rate 6% - 8%, loan maturity 5yrs, 10yrs, longer (to be negotiated)
• “Balloon loan", with no penalties for the earlier payoff
(but only after 1 (one) year from obtaining the loan, and paying the interest for a full 1 year).
• Administrative Fee 7% (payable from the loan disbursements only).
• Closing Fee ($300 - $500K) Security Bond
• The followings may qualify as other collateral: Evaluation Reports for Mining Projects in need for funding (done in compliance with specific standards), Power Purchase Agreements (PPAs, for energy related Projects), etc (to be considered on per project basis).
EXAMPLE OF PROJECTS RECENTLY FUNDED:
• Three Tank Oil Refinery with Seaport $ 3B
• 63 Mega Watts Hydro-Power Plant $ 200MM
• Public School Classrooms $ 3B
• Three Solar Power Plants $ 1B
• University Expansion / Hospital & Hotel $50MM
• Boutique Hotel Theme Parl $150MM
• Lusury Assisted Senior Living Village $50MM
• Govt Toll Road $ 2B
• Renewal energy Plant $155Mm
For Details Contact: Al Krauza, Bentley Ventures 949-293-3331
bentleyventures@gmail.com
RESTORE PACE!
Secondly, what is it about 100% of successful renewable energy programs all over the world being driven by a single proven program - GENEROUS FEED IN TARIFFS that this country can't seem to understand? Are you hoping we don't know that the rest of the world is paying regular people fair prices for producing high-value energy right where and when it's needed and is not 100% devoted to Big Energy no matter how expensive and destructive that energy is?
GENEROUS FEED IN TARIFFS FOR SOLAR UNDER 100KW
If you would just get those 2 simple, free, proven policies in place, everything from unemployment to global warming to the water crisis, to property values, to economic slumps to dead wilderness to our failed democracy will sort itself out!
PACE LOANS AND FEED IN TARIFFS. WE WILL DO THE REST.
Green Illusions: The Dirty Secrets of Clean Energy and the Future of Environmentalism. The production of solar panels is incredibly toxic (some toxins staying in the atomsphere 10,000 years) and produce very little energy and don't last very long.
Having said the above, I believe solar energy is one of the very best sectors to invest in the stock market. I wrote about this recently on my blog: http://how-to-make-money-with-penny-stocks.blogspot.com/2012/08/solar-energy-stocks-hot-sector-worth.html including some stats and facts.
Joe Wolfe
"CAPITAL HOMETEADING NOW! -- EXPAND CAPITAL OWNERSHIP."
http://www.cesj.org/homestead/strategies/community/clc-linkprocess.pdf
Decentralizing energy is much more urgent than is generally understood, due to the little recognized vulnerability of the power grid to solar storms. Surprisingly, such a storm can cause blackouts lasting for months. Prevention is becoming possible. A massive program to protect the nation is a National Security issue. See www.aesopinstitute.org
Installing 50 million more solar roofs as quickly as possible, including local energy storage and a switch to disconnect from the grid when it fails, would be a wise initial step.
Black Swans, highly improbable energy innovations with enormous implications are being born.
See Cheap Green and Moving Beyond Oil on the Aesop website for a few of them.
The door is open for a bold American initiative that can change the economic landscape, if we are wise enough to take action while there is still sufficient time.
Did you bother to look at the rest of the world? There are some countries light years ahead of us.
How you you guys get these reporting jobs?
We're doomed. The two party system ensures that now (See Harry Reid comments recently). And you thing we can lead on the green front?
btw..... I have reduced our energy bills at home 65% with more big jumps down soon to happen. A family of five using less than $100.00/month on electric.... How sweet is that !
It is not like I;m not trying to do my part. Many others are too. Just not Washington !