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How the green energy sector
can help Wall Street do the
right thing

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Wall Street.  Asset-backed securities.  Too big to fail. 
Memories of the mortgage market meltdown still
haunt Main Street...
..  v . . 
.3

: ;

Green business covers everything from solar
power projects to more efficient HVACs in factories
to ene...
This is not an overnight success story.  Solar power has
been around since the dawn of the space program. 
Energy efficien...
2‘-,  
» 

When you finance a home you go for a mortgage to pay for part
or all of your purchase over time.  Wind,  solar ...
, ,; 4

 ‘. 
‘- . .
. ,“ 7u: ‘:: ““   V. 
.. .:-; ‘.'. ‘.i. ,», ».-. f/""’7ACfi. “1‘-. .."s‘t 7: v :8 - ll

 

These soluti...
However,  this is only part of the story.  Somebody still needs
to provide the upfront capital to purchase a wind project....
As the predictability,  e. g.,  of the cost savings from an
efficiency project,  has become more predictable and
legal str...
N". 
, .  7‘; 
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SunEdison,  once the leading solar developer and its yield
Terraform were very popular up until the summer of 2015.
Fast f...
In spite of these challenges,  renewable financings are accelerating. 
The Investment Tax Credit for solar has been extend...
,Jv  _ _ . .
X707’ 77e17:. —:. :f; ;7 7::     77‘~ _
:  Less liquid but potentially even more exciting are the bond
market...
the trail in bringing securitizatio, n:tds, Qlar
financing,  completing six financings foralmdst
$800 million. -
I

Larger and more diverse offerings will provide 7 1
strong opportunities for asset management
firms and individual inves...
Finally,  we have green bonds.  Debt that offers a
guaranteed coupon to investors,  these differ from
asset backed issuanc...
The bonds raise funds for unspecified green corporate
objectives analogous to how traditional bonds fund
general corporate...
Why should we care about these

developments and what about
crowdsourcing?
We should care because green bonds and
asset backed bonds are multibillion if not

trillion dollar markets.
This matters in providing low risk solid yield

investment opportunities for investors,  low cost

capital to green enterp...
Crowdsourcing?  Great platform,  but the scale
needed to really make an impact in the green
sector reaches the billions an...
Maybe in the future,  but is likely going to be our forward
thinking companies,  investment managers,  pension

,  funds, ...
read full article at: 

www. washing’conpost. com
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How the Green Energy Sector Can Help Wall Street Do the Right Thing

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Ed Sappin explains the ways in which the green business sector is growing and how it may just be the tool Wall Street needs to help the nation's economy.

Published in: Environment
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How the Green Energy Sector Can Help Wall Street Do the Right Thing

  1. 1. How the green energy sector can help Wall Street do the right thing "’. l.7§17,'77l»‘: 'fl-H7 )3 an '11] 'L1i, E§i1'Jli7L1'l*, .L:1W Hill jj;1 rm lent
  2. 2. Wall Street. Asset-backed securities. Too big to fail. Memories of the mortgage market meltdown still haunt Main Street and Wall Street. But in spite of all the naysayers, the green business sector is growing up and may bejust what Wall Street needs to help be a positive force in growing the nation’s economy.
  3. 3. .. v . . .3 : ; Green business covers everything from solar power projects to more efficient HVACs in factories to energy storage systems that help to make the power grid stronger and more resilient. F ‘&-‘.7 i‘—n‘£. '.- , . 1 1 ,1 I. . ' {I
  4. 4. This is not an overnight success story. Solar power has been around since the dawn of the space program. Energy efficiency has been percolating into the real estate sector and corporate America since the 1970s. However, what has changed is the scale and the proven track record of green and renewable business.
  5. 5. 2‘-, » When you finance a home you go for a mortgage to pay for part or all of your purchase over time. Wind, solar and other green businesses have been employing similar structures over the last decade, allowing utility, commercial and more recently residential owners to pay for power rather than buying equipment, or to lease instead of buy. 7, - ‘. ’ 7.7."-737'“. ‘, 7' -7 ‘/ . _7-‘Pr’. . , .. r. “ . l
  6. 6. , ,; 4 ‘. ‘- . . . ,“ 7u: ‘:: ““ V. .. .:-; ‘.'. ‘.i. ,», ».-. f/""’7ACfi. “1‘-. .."s‘t 7: v :8 - ll These solutions have helped grow the green sector robustly. $329 billion of invesstment ‘*-r; :,= ‘<, _;‘V= ‘«. .i; . was made into clean energy in 2015. : £1
  7. 7. However, this is only part of the story. Somebody still needs to provide the upfront capital to purchase a wind project. For a mortgage this is a bank. For some type of green projects such as energy efficiency, this has been a challenge.
  8. 8. As the predictability, e. g., of the cost savings from an efficiency project, has become more predictable and legal structures catch up with the needs of the business and financial markets, things are happening that will transform our energy and environmental sectors.
  9. 9. N". , . 7‘; » »~ '77 T ')L‘~7s, Q, . . 7: 7777 7' . .,, .,; : . ~: ,., l ; ~, - F’ ‘ j 0,, xi . .. ,.. ,t§; §;'; ;;_ pf? 7 - v Z1317 °« '‘.7‘}~_. _ . - ~1 , _ 73-’ Bonds backed by solar or wmd projects and yieldcos are * q“ 7,: 7 . financing vehicles that are helping to accelerate green ’ 7 7‘ 1 financing. Yieldcos package projects into a publicly '3: . ‘ WC 0 I 0 7 77 1' / ”~. listed stock and were ve hot from mid 2013 to mid 7-9: 7' l. /T" 2015. They have since had problems with some « 7 promoters overpromising and volatile stock prices. ~7- ( - ‘($21 - 7 ‘$4 7. ‘‘. E': .‘: 1' ~. I, ‘ l‘7 ‘-3. 3.‘ j ' ‘ ‘ ‘K h'' I On 1‘ ' ‘I'-’. .‘ ~' E , L ‘fit L Arstl “ "‘f 7' jl ~ 4u‘; ,‘ up ‘ x' . . 7 P 7‘ ' 7‘ jf I7’ 'n -E‘ I l l l 1 I L l ‘ ‘l x . H"‘ j ’ P ' ‘ (/ ‘ "Q 77 "‘—+). , ' r 7 7 l 7_ ' I ' l‘ . 7. . lat; ~’. : e
  10. 10. SunEdison, once the leading solar developer and its yield Terraform were very popular up until the summer of 2015. Fast forward 9 months and SunEdison is expected to file for bankruptcy protection any day.
  11. 11. In spite of these challenges, renewable financings are accelerating. The Investment Tax Credit for solar has been extended through a sunset in 2021 and the Production Tax Credit for wind has been extended through 2019. More investors than ever are coming into the space attracted by the scale and sustainability of the investment horizon.
  12. 12. ,Jv _ _ . . X707’ 77e17:. —:. :f; ;7 7:: 77‘~ _ : Less liquid but potentially even more exciting are the bond markets. Exciting and bonds are rarely used in the same sentence, I but solar backed bonds offer the promise of what mortgage backed bonds could not: known payment streams through energy production and sales and robust consumer, corporate and utility risk management to minimize non-payment risks.
  13. 13. the trail in bringing securitizatio, n:tds, Qlar financing, completing six financings foralmdst $800 million. -
  14. 14. I Larger and more diverse offerings will provide 7 1 strong opportunities for asset management firms and individual investors alike in the coming months and years. TI7‘_T'l’ * ‘ _ir r . I, l L 7- 77- I H 117 5 : ‘-'-7~‘-—- J % . . _ . , / I-> 7 7 77-7-7: — 537//717/k 7 77 7 V7 7 7~‘7~7 77 ’, —/ ‘ ‘- _- Ii 7 , A - A/ .. - 9/ “; ~ ‘ * “X “
  15. 15. Finally, we have green bonds. Debt that offers a guaranteed coupon to investors, these differ from asset backed issuances like the Solar City offer as they rely on the overall credit of the issuer. The Green Bond Principles were first issued in January 2014 and have since been updated, including key investors, issuers, and other stakeholders.
  16. 16. The bonds raise funds for unspecified green corporate objectives analogous to how traditional bonds fund general corporate objectives. For example, Apple issued its first green bond in February 2016 for $1.5 billion, the largest yet for a US corporation. . '. %w-~. .., ,¢~. _._7F, _,, _>. ,,. .- . , T . ~.. ... ;,, _v_. ..7,. ._, ... _._ . ._. ,,. ._«_, ,.__, ... ..~. , . ... . . . .
  17. 17. Why should we care about these developments and what about crowdsourcing?
  18. 18. We should care because green bonds and asset backed bonds are multibillion if not trillion dollar markets.
  19. 19. This matters in providing low risk solid yield investment opportunities for investors, low cost capital to green enterprises and giving Wall Street an opportunity to do good and do well.
  20. 20. Crowdsourcing? Great platform, but the scale needed to really make an impact in the green sector reaches the billions and trillions, while crowdsourcing is still in the thousands and millions of dollars. -. _
  21. 21. Maybe in the future, but is likely going to be our forward thinking companies, investment managers, pension , funds, and investment banks that can accelerate investments in the green sector at scale and help have a , )4 true impact on fighting climate change and helping the of 12: _-'- world’s environment. . a.~‘1-. > ‘
  22. 22. read full article at: www. washing’conpost. com

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