"Financing stability is tied to policy stability" said Vice Admiral Dennis McGinn, ACORE President & CEO during his closing remarks at the American Council on Renewable Energy (ACORE) tenth annual conference in Washington, D.C. during the first week of February.
The intersection of policy, politics and finance for renewable energy set the scene for ACORE conference themes of bipartisan support, sustainable national energy policy and continued innovative financing solutions to fund projects. The Cannon House Office Building Caucus Room on Capitol Hill was buzzing with the energy (possibly fossil fuel, but we hope renewable) of several hundred top policymakers, financiers and industry leaders.
Jeff Holzchuh of Morgan Stanley echoed Vice Admiral McGinn’s thoughts giving the view from Wall Street saying, "capital markets are going to require more stability in order to invest.” Calling for a national energy policy, he went on to say, “risk capital enters the market if government is a reliable partner.”
Those and other comments referenced the patchwork nature of existing federal renewable energy subsidies and expiration dates. While the solar Investment Tax Credit (ITC) is available for eligible systems placed in service before year-end 2016, the Production Tax Credit (PTC) only extended the deadline for wind energy facilities by one year, from December 31, 2012 to December 31, 2013. Uncertainty surrounding extension of the PTC in 2012 hampered development of wind projects and forced layoffs in the wind industry.
Bipartisan support for renewables was sounded by legislators on both sides of the aisle including current and former Republican representatives Steve King (R-IA) and Jim Greenwood (former R-PA), currently serving as President of BIO, the American Biotechnology Industry Association. Greenwood said that, “the United States has a long history of supporting energy.”
“Traditionally, innovation has been a nonpartisan issue,” commented Jason Grumet, President of the Bipartisan Policy Center co-chairing an afternoon panel on bipartisan support for RE. He went on to say, “Solyndrification of the renewable debate has been damaging” alluding to the politicization of the industry in the past election year.
The financial community of institutional investors, private equity and venture capital also had a large presence both as panelists and attendees. They were beating the drum in favor of continued financial innovation: amending the tax code to broaden the definitions allowed for MLPs and REITs (master limited partnerships and real estate investment trusts) to include solar PV.
According to Chris Van Hollen (D-MD), ranking member on the House Budget Committee: “MLPs and REITs should be part of the conversation.”
Nancy Pfund, Managing Partner at DBL Investors, a cleantech San Francisco-based VC went on to say that, “the REIT structure supports solar and solar assets can be included” referencing the ongoing IRS private letter ruling (PLR) request of another California-based cleantech financier. She added that, “an IRS revenue ruling, would be even better as it would set a stronger precedent.”
In her white paper for DBL advocating federal energy subsidies, What Would Jefferson Do?, Pfund says, “America’s support for energy innovation,” is nothing new, but, in fact, it “has helped drive our country’s growth for more than 200 years.”
Lead image: U.S. capitol via Shutterstock
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