Posts Tagged : soft costs

Software Innovation Strengthens Clean Tech Financing, for Everyone

This article originally appeared on the official blog for the American Council On Renewable Energy.

This is the final installment of a 3 part series

We have a bright future ahead of us if we harness the full potential of our country’s renewable energy resources. Transforming the way we produce and distribute energy will not only be good for our environment, it will also be great for our economy—spurring innovation and creating jobs. So how do we make the most of the opportunity that lies before us?

In part 1 of this blog series, the challenges currently being faced by developers and financiers who work in the C&I solar space became clear. The truSolar Working Group has sought to address the sector’s problems by creating a “Rosetta Stone” risk screen that can lower project soft costs, increase transparency, and facilitate securitization of solar asset portfolios via standardized project scoring. Part 2 of the series outlined the features of beEdison: a cloud-based software platform designed to operationalize the truSolar risk screen. Essentially the TurboTax® equivalent for a complex solar diligence arena, beEdison software provides a much needed tool to streamline project risk assessment. Ultimately, software innovations like beEdison are allowing the C&I sector to overcome financing roadblocks. So, what implications can the necessary trajectory of truSolar and beEdison have for the clean energy economy?

By 2018, wide adoption of truSolar and beEdison can unlock hundreds of millions of dollars in additional annual investment in non-residential solar. Higher conversion ratios and soft cost reductions contribute to this additional capital deployment, along with proceeds from securitizations that have been facilitated by the widespread adoption of truSolar risk scores. Of course, there will also be secondary benefits that impact our environment. For instance: an additional 1.6GW of solar installed by 2018 would reduce carbon emissions by approximately 1.6 million metric tons: the equivalent of removing 351,000 cars from our roads. 

It’s important to realize that while these benefits sound very appealingmultiple energy sources, they are really just the tip of the iceberg. There is enormous potential to replicate the “truSolar diligence standard & beEdison software platform” model in adjacent technology spaces and economic markets. Effective collaboration between America’s renewable energy industry leaders can result in broadly accepted due diligence standards that are tailored for energy storage, energy efficiency, biomass, geothermal, wind and other complex asset classes like infrastructure. Platforms like beEdison can also be re-engineered to service players in each additional market space.

Replication and market expansion within our borders makes intuitive sense, but how about a concerted effort to impact global markets? The American energy landscape is unique in many respects, and yet the challenges that clean energy advocates face here are also evident on other continents. We live in a global village where capital is mobile, and energy project risks are often opaque. If the United States can benefit from diligence standardization, then so can Europe, Asia, Australia, Latin America and Africa.

The truSolar Working Group, currently led by the Rocky Mountain Institute, and the beEdison team know there is a lot of work ahead. Both are committed to breaking down the market’s resistance to change by building trust between partners, and by securing acceptance of the truSolar Risk Screen by industry participants, including financiers, rating agencies and solar project developers. With the right teammates and partners from all renewable energy sectors, we can radically change the landscape for clean-tech financing forever, and for the better. 

Simplifying Solar Diligence: A TurboTax®-like Solution

This article originally appeared on the official blog for the American Council On Renewable Energy.

This is part 2 of a 3 part series

It’s time to relax. The day has passed and we can all finally let out a collective sigh of relief now that we’ve successfully navigated the obstacle course that is filing our annual income tax return. Luckily, almost no one needed to read the 3,863 page long Internal Revenue Code to figure out how to complete their taxes. Most of us were probably smart enough to use TurboTax®, or another tax return preparation tool like it. If you would have filed your yearly income taxes by following the guidelines presented in the Internal Revenue Code, it would have taken time—lots of it—and you’d likely miss key information. Like taxes have taught us, it’s much easier to use a technology platform to simplify complex processes. As it turns out, solar diligence isn’t much different.

In last week’s blog, the truSolar risk screen standard for commercial and industrial solar projects was highlighted. truSolar is much like the Internal Revenue Code, in that it sets comprehensive guidelines and rules that should be followed. You could review the truSolar standard in its entirety in order to score your solar project’s risk profile, but that would consume valuable time. So here’s the good news: there’s a software platform like TurboTax® to help streamline a project’s truSolar assessment.

beEdison is a cloud-based technology platform that operationalizes and professionalizes the truSolar standard into a quick and efficient survey. Much like how TurboTax® asks the right questions to complete filing scenarios, beEdison asks questions unique to a project. For example, a project developing a ground mount array, won’t be asked questions about the structural integrity of a roof.

Ground Mount Questions

While TurboTax® electronically prepares tax filing documents, beEdison produces a comprehensive diligence report to share with project partners. Additionally, beEdison’s platform provides recommendations to mitigate project risk and improve a project’s quality, while an online deal room securely stores project documents. It’s like Dropbox, only specifically tailored for solar project documentation. A user can upload multiple files with the click of a button and easily share documents with project partners.NY Solar Demo - Dashboard_Score

The most anticipated TurboTax® display is the one that reveals your annual tax refund or payment. Similarly, beEdison’s Dashboard reveals a project’s truSolar score which effectively summarizes a solar project’s risk profile, and instantly allows investors to assess whether the investment opportunity in front of them aligns with their risk appetite.

Similar to the renewable energy sector at large, as the commercial and industrial solar sector realizes its full potential; it’s still constrained by the complexities of project development. There is no standardized way to assess the risks of C&I solar assets. Innovative tech developments like beEdison will alleviate headaches associated with project development and diligence, and help solar asset buyers and sellers complete more projects with more efficiency.

In next week’s final blog post we’ll look at the future of truSolar and beEdison and the impacts each can have on a rapidly evolving solar industry. Stay tuned, especially if you are interested in asset securitization and secondary markets.

beEdison is a Finalist in the 2015 “Finance for Resilience” competition!

Finance for Resilience (FiRe) is an open and action-oriented competition platform that collects, develops and helps implement powerful ideas to accelerate finance for clean energy, climate, sustainability and green growth. FiRe, which is run by Bloomberg New Energy Finance, focuses on interventions that are led primarily by the private sector, bear the potential of significant incremental finance and can be implemented independently from the international policy process of climate change.

This year beEdison, with the support of truSolar’s working group members, submitted an intervention titled: “Automating a Fico-like risk score for clean energy.” The submission was judged by a panel of renewable energy experts along with 51 other entries, and was selected as one of eight finalists to present at this year’s “Bloomberg Future of Energy Summit.” beEdison’s intervention is grounded in big-picture thinking, and has at its core a sharply delineated focus: we must lower transactional soft costs for commercial clean energy projects and promote clean energy asset securitization by scoring risks in a standardized way.

The Challenge: The starting point for beEdison’s invention lies in the recognition of a key challenge facing market participants who want to expand clean energy deployment. Currently, the commercial & industrial sectors consume 51% of America’s energy, twice as much as residential and more than residential and transportation combined. Yet, in 2014, after several years of shared leadership, C&I was overtaken by residential in total solar capacity installations. Why this happened reveals how the C&I segment can and should adopt ready solutions to unleash growth, such as: 1) a reliable framework for credit assessment like FICO, and 2) standardized contracts, transaction practices, and cloud technology for solar asset buyers and sellers that enable growth to match and exceed residential proportionate to its actual share of electricity consumption.

The Solution: A widely-adopted, cloud-based software platform (beEdison) is needed to streamline/standardize commercial diligence, while providing reliable and uniform scoring metrics for financiers to use. Such a platform using industry accepted diligence and rating standards (truSolar®) will lower project costs, improve deal conversion ratios and accelerate solar asset securitization.

Scope: beEdison and truSolar will initially promote greater funding inflows into the USA’s non-residential solar market, before platform expansion occurs in markets such as Europe, Australia/NZ, Latin America and Africa. The beEdison executive team will also collaborate with industry leaders in other renewable energy sectors to devise project due diligence standards that are suitable for adjacent markets such as energy storage, energy efficiency, biomass, and other complex asset classes such like infrastructure-as-a-service.

Scale: By 2018, wide adoption of beEdison software solutions can unlock hundreds of millions of dollars in additional annual investment in US non-residential solar. Higher conversion ratios and soft cost reductions contribute to this additional capital deployment. There will also be secondary benefits that impact our environment and the capital markets. An additional 1.6GW of solar installed by 2018 would reduce carbon emissions by approximately 1.6 million metric tons: the equivalent of removing 351,000 cars from our roads. In addition, the widespread adoption and acceptance of beEdison project scores will facilitate securitization of solar project assets in the financial markets: this development will provide investment managers with additional capital deployment options.

The beEdison team knows there is a lot of work ahead. As a company we are committed to breaking down the market’s resistance to change by building trust between partners; securing acceptance of the truSolar Risk Screen Methodology by industry participants, notably financiers, rating agencies and solar project developers; and investing in efforts to convene industry players who can formulate and publish complementary risk screen methodologies for wind, biomass, biofuels and geothermal investment opportunities.

Join us on this mission! Contact join@beEdison.com for more information about beEdison’s software and project rating solutions.

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