network of Alaska energy enthusiasts & experts

Funding and Finance

Possible topics could include USDA opportunities, PPAs, tax credits, state loan guarantees, RE Fund, feed in tariffs, and Green tags.

Tags: Fund, Green, PPAs, RE, USDA, and, credits, feed, guarantees, in, More…

Replies to This Discussion

Permalink Reply by Ian Graham on March 6, 2010 at 12:02pm

Folks in AK should be aware of carbon financing as a non-traditional way to enale project finance. The market is very imature at this juncture due to the backing being all private finance. Huge oppurtunity for AK projects as they effectively offset diesel. Projets within the grid are unable to get electrical generation carbon offsets because of accounting complexity, BUT if you have an isoated grid it can work!

The green tag markets within the PAC NW are some of the best for price in the US, BUT i see that going away as the utlities will need to absorb the internally due to EPA regulation. Also if an RPS is developed with "teeth" within the state the green tag market will become a large player with simple supply and demand economics (look at the Mid Atlantic Region with solar REC's, 7 cents to 30 cents per kWh in a matter of months due to an RPS on regulated utilities).

PPA structures are of utmost importance and we can build upon the work that has been done for remote isolated grids to control costs for the rate payers and pay off the investment.

If anyone is interesed in a wind(or solar) lease option please inquire, this is a developing project finance option. Very similar to the solar lease programs that are rolling out across the industry.

Tax equity is a very real option and is how 99.9% of all renewable energy in the traditional markets are finaced. The problem is that tax equity is becoming exspensive (supply and demand), AK has strong local corporations that have this; second is the strain put upon the PPA contract which is something fairly new for renewabls in AK. Tax equity can be strutured to flip projects to a different entity.

A pre-paid PPA model is also somthing folks should look into for structuring and financing projects for non-taxable entities such as non-profits, schools, munis, etc. Is attatrative and relatively simple, and new IRS guidlines have been released to guide the process.

Thats a fairly good outline of some of the major topics of project finance, the key is knowing what is right for you and what will make ecomonmic sense initially and long term for your project.
Cheers, IG