The insufficient capital allocation to the PV Solar asset market is due to the scarcity of large-scale projects to absorb the size of capital willing to enter the sector. Thus, with the new wave of consolidation taking the industry, and increased demand for utility scale projects from governments, we believe the groundwork is being set for innovative financing methods to grow within the market. In the short-term, we believe that the most cost-effective method of financing solar assets would be through bond issuance. We believe this is the most effective financing method in the short-term because it has already proven to be effective in the market with Warren Buffet's MidAmerica's $1bn bond issuance for its solar assets. Further, average institutional investors are more familiar and comfortable with bond structures, thus this financing method can attract a wide array of investors to the sector. In the medium-term, we believe that asset-back securities would be the most cost-effective, as they provide the comfort of the bond structure with collateral, and these structures also provide room for diversification. However, these structures would not be attractive to as wide an array of investors as a regular bond due to the complexity of the structures. In addition, we also need to see increased standardization of contracts across the market for there to be significant growth in the ABS space. Lastly, in the long-term we believe financing methods such as MLPs and S-REITs could be viable pending regulatory approval. There structures provide access to an even broader array of investors than regular bonds, and in addition they inherently also provide portfolio diversification and tax benefits. These long-term solutions would be the most attractive to the average investor, but would take the longest to grow as a significant method of financing within the PV market. With the development of a socially responsible mindset renewable technologies began to gain space in the modern energy market. With this new wave solar photovoltaic technology with the aid of the U.S Department of Energy through the SunShot program began to gain more space
The insufficient capital allocation to the PV Solar asset market is due to the scarcity of large-scale projects to absorb the size of capital willing to enter the sector. Thus, with the new wave of consolidation taking the industry, and increased demand for utility scale projects from governments, we believe the groundwork is being set for innovative financing methods to grow within the market. In the short-term, we believe that the most cost-effective method of financing solar assets would be through bond issuance. We believe this is the most effective financing method in the short-term because it has already proven to be effective in the market with Warren Buffet's MidAmerica's $1bn bond issuance for its solar assets. Further, average institutional investors are more familiar and comfortable with bond structures, thus this financing method can attract a wide array of investors to the sector. In the medium-term, we believe that asset-back securities would be the most cost-effective, as they provide the comfort of the bond structure with collateral, and these structures also provide room for diversification. However, these structures would not be attractive to as wide an array of investors as a regular bond due to the complexity of the structures. In addition, we also need to see increased standardization of contracts across the market for there to be significant growth in the ABS space. Lastly, in the long-term we believe financing methods such as MLPs and S-REITs could be viable pending regulatory approval. There structures provide access to an even broader array of investors than regular bonds, and in addition they inherently also provide portfolio diversification and tax benefits. These long-term solutions would be the most attractive to the average investor, but would take the longest to grow as a significant method of financing within the PV market. With the development of a socially responsible mindset renewable technologies began to gain space in the modern energy market. With this new wave solar photovoltaic technology with the aid of the U.S Department of Energy through the SunShot program began to gain more space
Team12-FinalPaper.docx