Innovative Financing for
Renewable Energy
Richard Ottinger & John Bowie
Pace Law School
Pace Energy and Climate Center
IUCNAEL 2014 Colloquium
Background
 Divided mechanisms into three groups:
 Off-grid or underdeveloped infrastructure
 Community-scale grids
 National grids
Selected Mechanisms
 On-bill Finance Mechanisms
 Microgrids
 Internet Mechanisms
 Yieldcos
On-Bill Finance 1
 What is On-bill finance?
 Third party (non-financial institution) provides finance
for the initial high capital cost of an energy asset.
 Uses an existing bill collection as a mechanism to
collect payment for a renewable energy or energy
efficiency asset.
 In practice, this may be a utility bill or a property tax
surcharge.
On-Bill Finance 2
 On-Bill Finance – Utility-financed project installs a
renewable energy or energy efficiency asset, and
adds a recurring charge on the customer’s monthly
bill. The monthly rate is designed to use the
savings created by use of the energy asset to pay
the loan.
 Property Tax Assessed Clean Energy – State-
financed project provides funding for renewable
energy or energy efficiency assets.
Microgrids
 Community Microgrids
present a unique
opportunity for
renewable energy
systems.
 Local projects benefit
from community
stakeholders in billing,
enhanced economic
opportunities, and
benefits in biomass
reuse.
Internet Mechanisms
 Prepaid Meters
 Peer-to-Peer Finance
 Crowdfunding
 Peer-to-Peer (“P2P”) Finance
Prepaid Meters
 Prepaid meters function like other prepaid services
such as prepaid cellular phones.
 Customers text message a prepaid code to the
billing company, which then credits the meter for a
specified amount of power.
 The meter company distributes payment to the
specific electricity provider, while retaining a small
service fee.
Lumeter Networks
 Lumeter Networks provide prepaid meters and
cloud accounting for renewable energy installations.
 An energy company can install a solar panel in a
remote or off grid setting, and then recover bill
payments through Lumeter’s wireless prepaid
billing.
P2P & Crowdfunding
 Peer-to-peer (P2P) funding and crowdfunding allow
a potential borrower to post their proposed project
on the internet, where one or more people may then
act as lenders.
 Atypical lenders
 Small scale loans
 Favorable rates
 Ethical lending
Yieldcos
 “Yield Companies” or “Yieldcos”
 Yieldcos package long term profits from renewable
energy assets into tradable securities.
 Enables the Yieldco to quickly raise capital, which
can then be used to purchase developers’
renewable energy assets.
 Renewable end-game?
Conclusions
 Many more mechanism are currently being
deployed to speed investment in renewable energy.
 Functioning private sector financing solutions are
essential to the long-term health of renewable
energy.
 Innovative to Conventional
Thank you
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Innovative Financing for Renewable Energy