Solar PV module prices down 15% yoy.
Solar PV promoted on brownfield sites. 1 GW of clean energy and 20,000 jobs by 2020. EPA has vetted 80,000 brownfield sites in addition to it’s national program.
Capital markets opportunities in renewable energy: Standardize, securitize, scale.
Lack of offtake arrangements globally expected to lead to more merchant project finance. Indicative project finance: merchant power 55-60% leverage and an expected DSCR of 1.8-2x, contracted power 85% leverage with a ratio of 1.25-1.3x.
Oil & Gas
Oil prices expected to increase 2Q19. US oil net exporter for the 1sttime since 1973.
Green Bonds used to finance clean energy projects that count towards LEED certified buildings. The issuance is the first for an apartment REIT. Market expects 2 business cycles before mass adoption of sustainable business. Climate investment was $70 BN in 2016. 990 institutions with $7.2 TN of AUM declared some form of fossil fuel divestment. Going forward, 2,400 asset managers representing $82 TN have agreed to UN PRI commitment on ESG issues. Total AUM committed to PRI has grown 19% in the past 12 months. US had 205 IPOs in 2018 raising $52.8 BN, a 14% YOY rise by volume and 31% by proceeds. Asset management and automation are leading factors for investment in new technology. Carbon tax will reduce emissions 40% by 2030. Legislation will impact emissions and have emissions implications that will have an effect on distribution. CA will require market-based rates by 2020. Other states are following close behind. US has 71 MM advanced meters, about 50% meters installed in 2016. s45Q energy tax credit of $35/ton of carbon capture used for EOR and $50/ton for carbon capture and storage. Previous credits were $10 and $20, respectively. Most installed facilities use carbon capture for EOR. 10 of the world’s operating CCS facilities are located in the US. Lower return expectations for buyout, growth, VC and real assets funds. Fees are under pressure. LPs expect to increase their private markets allocation. Return expectations: