Investments in Alternative Energy Sources

The market for renewable energy has grown rapidly over the past decade. According to the U.S. Department of Energy’s 2013 Renewable Energy Data Book, renewable electricity grew to nearly 15% of total installed capacity and more than 13% of total electric power generation in the United States in 2013. According to the same publication, renewable electricity accounted for more than 61% of all new electricity capacity installations in the United States in 2013.

It is anticipated that demand for alternative forms of energy will continue to grow as countries seek to reduce their dependence on outside sources of energy and as the political and social climate continues to demand social responsibility on environmental matters. The U.S. Energy Information Administration anticipates in its base case that generation from renewable energy sources will grow by 77% from 2010 to 2035.

Notwithstanding this growing demand, a shortage of capital currently exists in the market to satisfy the demands of the renewable energy sector in the United States and around the world, particularly with respect to small and mid-sized projects and businesses that are newly developed. In addition, much of the capital that is available is focused on larger projects, and does not allow project owners to take any “merchant” or investment risk with respect to renewable energy certificates. Project developers are not finding or are encountering delays in accessing capital for their projects. As a result, a significant opportunity may exist to provide new forms of capital to meet this demand.

The market for energy efficiency projects is showing growth and opportunity. The American Council for an Energy-Efficient Economy has estimated that by 2050, energy efficiency measures and practices could reduce U.S. energy use by 42% to 59% relative to current projections. As a result, a significant opportunity exists to finance projects which reduce energy consumption and enhance the efficiency of energy assets, primarily in the United States.

Alternative Energy Projects may include:

Solar Power
Wind Energy
Hydro Power
Geothermal
Biomass and Biofuel
Fuel Cells
Combined Heat and Power
Energy Storage Projects
Making of Loans to Retail Electricity Providers