Kathryn Meng Elmes
Key Takeaways from Infocast's Solar + Wind Finance & Investment Summit
"High Energy" is the only phrase to describe Infocast's Solar + Wind Finance & Investment Summit. A conference that routinely draws 300-500 attendees (Solar + Wind combined in 2022) bolstered its attendance this year to more than 2,000! Below we share our key takeaways from conversations throughout the exceptional agenda.
The market continues to be very active, with an abundance of capital and strong interest in the sector.
The evolving world of "flexible capital" is bringing investors into all parts of the capital stack. Investors that previously deployed capital into project equity/debt structures are now moving into corporate equity/debt. Development platforms are raising capital from these investors at levels unseen just 6-12 months ago!
Competition, complexity, and capacity are challenging for developers and financiers alike.
The discussion on how to enable more commercial and industrial offtakers continues. The prevailing sentiment is still to dilute a small number of unrated offtakers into a larger (~80%) pool of investment-grade offtakers to achieve favorable financing packages.
Developers acknowledge that investment-grade offtaker deals remain the most competitive and are looking to move downstream to unrated C&I while maintaining competitive financing offers.
Large-scale utility deals continue to see margin compression and project scarcity due to EPC cost increases and scheduling delays.
Community solar remains a hot topic while developers and lenders struggle to deal with program complexity and high residential LMI requirements combined with often limited pools of subscribers. Some programs see delays and bottlenecks in recruitment as capacity grows.
Banks struggle to compete for the same set of deals and are looking for a more creative edge. Once considered esoteric, USDA loans are now "commonplace," as one banker describes. Even seasoned USDA lenders are seeking alternatives to increase the competitiveness of their financing offers.
Innovative risk management mechanisms were a focal point by panelists.
Innovative insurance products and risk management remain a focus for expanding markets. This was brought center stage during a panel with REsurety, Crayhill Renewables, and Brookfield Asset Management. On a separate panel, James Edmonds from HSBC mentioned kWh Analytics and Energetic Insurance as ways for banks to expand activity while managing risk.
Two years ago, the Energetic team attended the last major Infocast conference. The opportunity to meet with in person, the many development and financier partners that, up until now, we've only been able to work with virtually was an experience we've been longing for. We were glad to see lots of new and familiar faces, and with a group this excited, it is clear that 2022 will be another great year for renewable deployment!
Thanks to Infocast, CohnReznick Capital, Silicon Valley Bank, and Keybanc Capital Markets for hosting impressive networking receptions.