Solar & Storage Finance USA Conference

Top 10 Takeaways from the Solar & Storage Finance USA Conference

Live Oak Bank’s renewable energy lending team traveled to New York to attend the Solar & Storage Finance USA Conference. The conference brings together debt providers, funders utilities, corporate off-takers and blue-chip energy firms looking to invest capital and discuss raising capital for solar and storage projects in the USA. Melissa O’Buch, senior loan officer, offers her top 10 takeaways from the event:

 

  1. “Solar is as simple as it gets, but storage is as complicated as it gets.”  Energy Storage is still not there yet and it only makes sense when there is a specific incentive (adder).  Lithium-ion may not be the answer and although the prices are down by 60% since 2013, they are expected to stabilize due to supply chain headwinds.

 

  1. Although everyone is complaining that sellers are expecting too much for projects, there are still positive surprises out there in the valuation results.  The question is whether those valuations are reliable.

 

  1. Community solar means too many different things: residential, commercial, more than three offtakers, or a lower risk, higher return product.  It makes no sense to require long term residential community solar subscription contracts. The Attorney General can cancel them at any time if there are complaints.

 

  1. There are a huge number of photovoltaic arrays that aren’t performing. 30% show serious defects requiring immediate action. Module defects are up from 25% to 43%. Damages range from $0.10-$3500 per kW peak.

 

  1. The current big markets are CA, TX, MA, NC, SC, and “the Midwest”.  There are more foreign investors coming to the market every day.  Air quality in Shanghai can be so bad that children cannot attend school!

 

  1. Equipment prices are lower than expected this year partially because the 2017 price increases absorbed any increases that should have been caused by the tariffs.

 

  1. California is working to ensure that natural gas can no longer be the backup for microgrids.  Although New York is pushing renewables, they aren’t on the electric vehicle kick and there aren’t charging stations on the freeways.  This is primarily because people in the city generally speaking don’t have cars, but also because of gas company relationships.

 

  1. The US energy storage market is expected to grow 390% from 2018-2022.  It will mostly be front of the meter.  In 2022, expect 50% of all solar to be paired with storage.

 

  1. 2018 wasn’t as bad as expected, however, there was tempering in the first half of the year that met with a strong response in the second half of the year.  Safe harboring and opportunity zones should both be on any developer’s or investor’s radar.

 

  1. HLBV (Hypothetical Liquidation Book Value) accounting, which is a combination of GAAP and tax accounting, will put you to sleep.

 

If you are interested in learning more about our renewable energy services, contact our team today. Reach Melissa O’Buch via email at melissa.obuch@liveoak.bank or by phone at (910)-550-2289.