John Joshi

Posts by John Joshi

The key to broader penetration of solar energy depends on access to capital markets and innovative financial structures that can reduce the cost of capital for project finance as well as increase the investor base beyond the traditional tax-equity driven investors. There is a strong case for the DOE to establish the Advancd Research Project Agency-Capital (ARPA-C) that will function to support the broader adoption and commercialization of renewable energy through mechanisms, including credit enhancment and direct equity investments for capital market project aggregation warehouse facilities and securitization transactions.

While ARPA-E has been successful for the deveopment of new renewable technologies, the renewable sector can benefit from the expansion of ARPA-E to include capital to catalyze the breakthroughs for financial innovations. ARPA-C innovations can help bridge the funding gap that challenges renewable energy growth by providing structural support for renewable energy projects to develop capital markets solutions. Capital Markets structures can help reduce the total installed cost of solar electricity significantly – and combined with other DOE initiatives could help make solar power cost-competitive without additional subsidies. The Obama adminstration outlined in the March 20, 2011 publication “Blueprint for a secure energy future”, three major goals : Keep reading →

The heat index in NYC reached 106 degrees on Thursday, July 21st and climbed into Friday and the weekend.

According to news reports, Con-Edison started calling clients to cut back on electric usage and maintain the load at a lower level to avoid brown-outs and black-outs. Distributed power generation can help manage power loads for utilities and provide security for large industrial and commercial customers. Keep reading →

In a previous article we wrote about the developments with Bank of America, Prologis and NRG Energy and the Department of Energy (DOE) loan guarantee for a portfolio of distributed solar projects in the US. We observed that the framework that these firms had developed along with the DOE program could be a harbinger for a solar securitization market. We noted that for the market for solar structured transactions to grow within a capital markets approach, it would require standardization of solar power purchase agreements (PPA) and lease contracts. In this article we will explore a standardized PPA in more detail.

A solar PPA is an agreement between a developer/investor of solar energy and a customer/ off-taker to purchase the solar power at an agreed upon price in a long-term contract. The developer/investor installs, maintains and retains ownership of the solar facility on a customer facility – be it a rooftop or other property. The customer pays only for the power generated by the facility and not for the cost of the equipment and installation costs. Keep reading →

The big news of the week for solar was the US Department of Energy (DOE) loan guarantee for 733 MW of distributed rooftop solar projects. In case you missed the nuance, NRG, Prologis and Bank of America (BOA) are taking the first steps towards solar project securitization of rooftop installations. A few weeks ago NRG had announced they would be entering the rooftop solar sector and look at securitization as possible funding strategy.

This week’s news lifts the veil on the big plans that BOA, NRG and Prologis have hatched. We’ve been advocates of a securitization solution (see ASF Journal, Winter Edition 2011, “Securitization’s renewable opportunity,” by John Joshi) for solar leases and power purchase agreements for some time now and the recent news only confirms that it’s going to happen a lot faster than we expected. Keep reading →