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Renewable Energy Investment on the Rise

By Rick Laezman | Mar 15, 2012
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While the economy may be down, enthusiasm for renewable power is not. In fact, investment in renewable-energy projects is on an upward trend and expected to continue in that direction.

According to a recent study by the Boston-based law firm MintzLevin, capital demands for renewable projects is robust. The green paper, “Renewable Energy Project Finance in the U.S.,” analyzes project financing trends for utility--scale renewable-power projects going back several years and offers a forecast into the year 2013.

According to the report, renewable financing has recovered from the economic crisis of 2008 and has weathered the ensuing slowdown equally well. In 2010, renewable projects secured a total of $18.5 billion in debt and equity capital. The lion’s share of that money, $14.2 billion, went to wind-power projects.

Renewables benefited from the federal 1603 program, which provides cash grants in lieu of the federal investment tax credit. According to the MintzLevin study, $9.78 billion in cash grants were distributed during the two-year period between 2009, when the program was created under the Recovery Act, and 2011. The study notes that the cash grants spurred approximately $22.8 billion in additional private investment. Of the 4,254 projects that received the grants, most of them—3,627—were solar.

Moving forward, the study projects renewable financing to continue on its upward trend. Capital demands of renewable projects is expected to grow at a compound annual rate of 16.2 percent over the next two years, increasing to $41.2 billion in 2012 and $48.9 billion in 2013. The bulk of that financing will be divided into roughly equal thirds between concentrated solar power, photovoltaics and wind-power projects.

About The Author

LAEZMAN is a Los Angeles-based freelance writer who has been covering renewable power for more than 10 years. He may be reached at [email protected]

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