Finance
The clean energy policy resources—reports, data, and tools—that are provided here encompass deployment programs, financial incentives and regulations.
Incentive/Instrument
Governments, utilities, development banks, green banks and the private sector have several tools at their disposal that can help address barriers to clean energy investments. Incentives are policies that reduce the capital expenditures for an investment and in some cases can also help reduce the cost of financing. Instruments are financial structures and agreements that provide financial products or contractual agreements that provide cash flows.
- Asset-backed Securities
- Capital Subsidies, Grants and Rebates
- Clean Energy Funds
- Concessional Loans
- Credit Enhancement and Insurance
- Direct Public Investment
- Feed-in Tariffs
- Finance for Energy Access
- Green Banks
- Loan Guarantees
- Microfinance
- Net Metering and Net Billing
- Performance Based Incentives (PBI)
- Performance Contracting and Energy Service Companies
- Power Purchase Agreements
- Public/Utility Benefit Fund
- Tax Incentives
- Tenders and Reverse Auctions
- Tradable Certificates
- Yieldcos
Investor
Investors include those who can provide cash, can purchase stocks or bonds, or can loan to clean energy projects. Investors have their own appetite for risk and preference for types of projects, investment lengths and return rates. Accordingly, investors may focus on specific technologies and applications, markets, and stages of the business development cycle.
- Corporate
- Crowd/Social Funding
- Development Banks
- Government
- Guarantor/Insurer
- Industrial End Users
- Institutional
- Private Equity
- Private Sector Lenders
- Residential
- Small and Medium Enterprises
- Tax Investors
- Utilities
Investment
Each type of capital maps to different investor classes and may come with specific stipulations. For example, equity investments imply ownership. Clean energy companies, project developers and direct investors will likely use a portfolio of different types of content, depending on the stage of development the project or company is in and considering the overall cost of capital.
- Angel
- Balance Sheet
- Bond
- Climate Finance
- Equity
- Lease or Service Contract
- Loan
- Mezzanine
- Public Market
- Tax Equity
Barriers
Despite being widely deployed in a variety of markets and being considered as proven and commercialized technologies, clean energy projects and companies may face challenges accessing investment and finance owing to systemic risks and a lack of experience through the project development and financing process. Public and private sector incentives and instruments and other efforts, such as capacity building programs and the policy and regulatory environment are potential solutions.
- Access to Capital
- Fossil Fuel Subsidies
- High Upfront Costs
- Lack of Existing Market
- Low Knowledge Capacity
- Need for Public Funds Management
- Split Incentives
Market Stage
The level of market activity and size of the ecosystem of local technologies supplier, developers, financiers and investors can impact risks and thus the types of incentives and instruments needed to support project development. Nascent markets are likely to require stronger policy signals and programs that address higher risks and resulting cost of capital, whereas mature markets with significant project pipelines are less reliant on public sector programs.
Economy
Economic development can affect the overall financing and investment ecosystem. There are also often general correlations between stage of economic growth and the number and degree that barriers exist. Policymakers will need to consider the economic profile of their jurisdiction when designing incentives and instruments.
Jurisdiction
Policymakers, utilities and development banks focus on specific geographic areas, including at the regional level, at the country level or at the municipal or county/provincial level. Certain incentives and instruments may make more sense for a given jurisdiction.
See Also
Resources CESC
Deployment Data
Publication
Training Materials
Course on Regulation and Sustainable Energy in Developing Countries
Sources:
Leonardo Energy
Clean Energy Solutions Center
Date:
22 September 2014
Deployment Data
Publication
2010 Wind Technologies Market Report
Sources:
Ernest Orlando Lawrence Berkeley National Laboratory
Date:
1 June 2011
Deployment Data
Policy Data
Publication
Tools and Websites
2010 Vehicle Technologies Market Report
Sources:
United States Department of Energy
Date:
1 February 2011
Deployment Data
Policy Data
Publication
2010 Solar Technologies Market Report
Sources:
National Renewable Energy Laboratory
Date:
1 November 2011
Publication
2010 Clean Energy Investments: Project Summaries
Sources:
Asian Development Bank
Date:
1 June 2011
Publication
Tools and Websites
Training Materials
2010 China-United States Renewable Energy Grid Integration Workshop (Website)
Sources:
The China Sustainable Energy Program
Deployment Data
Policy Data
Tools and Websites
2009 U.S. State Clean Energy Data Book
Sources:
United States National Renewable Energy Laboratory
Date:
1 October 2010
Publication
10 Questions to Ask About Electricity Tariffs
Sources:
Prayas
Energy Group
World Resources Institute
Date:
1 April 2014
Publication
10 Big Ideas for Making Energy Efficiency Bankable in India
Sources:
International Institute for Sustainable Development
Date:
19 August 2014
Deployment Data
Publication
"Tablero de Comando” Para la Promoción de los Biocombustibles en Ecuador
Sources:
United Nations
Date:
1 May 2008
Policy Data
Publication
A Comparison of Energy Efficiency Programmes for Existing Homes in Eleven Countries
Sources:
Regulatory Assistance Project
Date:
1 February 2010
Publication
30 Years of Policies for Wind Energy Lessons from 12 Wind Energy Markets
Sources:
International Renewable Energy Agency (IRENA)
Date:
1 December 2012
Deployment Data
Publication
2017 Offshore Wind Technologies Market Update
Sources:
United States Department of Energy
National Renewable Energy Laboratory
Date:
1 August 2018
Deployment Data
Publication
2014 JRC Ocean Energy Status Report
Sources:
Joint Research Centre (JRC)
Date:
1 January 2015
Deployment Data
Publication
2011 Vehicle Technologies Market Report
Sources:
Oak Ridge National Laboratory
U.S. Department of Energy
Date:
1 February 2012
Deployment Data
Publication
2011 Technology Map of the European Strategic Energy Technology Plan (SET-Plan)
Sources:
European Commission Joint Research Centre Institute for Energy and Transport
Date:
1 January 2011
Publication
Tools and Websites
A Guidebook on Renewable Energy Project Development and Packaging in the Philippines
Sources:
United Nations
Philippines Department of Energy
Publication
A Guide to Community Solar: Utility, Private, and Non-Profit Project Development
Sources:
United States Department of Energy
United States National Renewable Energy Laboratory
Northwest Sustainable Energy for Economic Development
Keyes and Fox
Stoel Rives
Bonneville Environmental Foundation
Date:
1 November 2010