CPI Webinar: The Impacts of Policy on the Financing of Renewable Projects
Presented by David Nelson and Uday Varadarajan
To scale up renewable energy, we need enough investment at an appropriate financial cost. Policy influences these renewable energy investment decisions, ultimately determining whether policy objectives are met and at what cost.
In the spring of 2011, CPI began a project to assess the effectiveness of policy in promoting efficient investment in clean energy. As part of this project, last October CPI reviewed six large-scale renewable electricity generation projects in the United States and Europe to evaluate how policy affects project economics, as well as the cost and availability of financing.
The results of our analysis suggest that:
- The renewable energy projects studied would not have attracted investors without the help of policy support.
- In general, the financing and project costs that we identified are in line with published benchmarks for renewable projects.
- The duration of revenue support has the largest impact on financing costs.
- Revenue uncertainty is the second most important factor influencing financing costs.
- Investors’ perceptions of risk also significantly impact the financing costs of projects.
The ultimate goal of this analysis is to draw lessons that can be used to help policymakers design policies that help reduce the cost of financing renewable energy and in turn improve policy cost-effectiveness.
This webinar will discuss these results in greater detail and outline the next steps in CPI’s broader work program on renewable policy effectiveness and finance.
Slides from the presentation can be downloaded here or from the link at the top of this page. A recording of the webinar is embedded below: