Innovative financing for renewable energy project development – recent case studies in North America

Abstract

Renewable energy can address increasing energy demand while mitigating the effects of climate change. High capital costs and long payback periods require most projects to secure financing for a portion of the initial costs. Market-based incentives and policies can be credited with lowering development costs, but these come with uncertainties and expiration dates. To secure financing, project developers have turned to innovative mechanisms. This paper presents case studies of innovative financing for renewable energy development in North America. Examples include financing through public capital vehicles, hybrid and carbon bonds, and through corporate power purchase agreements. The objective is to determine which mechanisms or which components of these financing packages are replicable for the purpose of encouraging developers to seek the most advantageous solutions.

Keywords:

• Renewable energy
• energy finance
• community wind

Acknowledgements

The authors acknowledge with thanks the support of the Natural Sciences and Engineering Research Council of Canada.