Solar Power Utilities Look to New Investment Models - The Minute

Solar Power Utilities Look to New Investment Models - The Minute

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Monday, January 26, 2015 - 4:00pm


CONTENT: Multimedia with summary

Two-thirds of the nation’s solar capacity installed in the U.S. last year was utility-scale solar power. The rapid growth of this new industry has been driven by government loan guarantees and an Investment Tax Credit worth 30 percent of a project’s cost. The results have been the Ivanpah plant, a venture between BrightSource Energy, NRG Energy, and Google, and two plants developed by the Spanish energy company, Abengoa. Located in the Mojave Desert, all three produce electricity when the sun is not shining by storing solar power for overnight use. Between them, they produce enough electricity to power over 300,000 homes throughout California. But the loan guarantee program has expired, and the tax credit drops from 30 percent to 10 percent at the end of this year. So solar power companies are looking to other financial tools to attract investors.

Congress is debating allowing the industry to use master limited partnerships, investment vehicles used by the oil and gas industries. And solar advocates are lobbying the administration to allow large-scale solar farms to be included in real estate investment trusts. Both mechanisms let companies pass much of their income directly to investors. An innovative industry requires equally innovative business models.

I’m John Howell for 3BL Media. 

Video source: Solar Power Utilities Look to New Investment Models