Working Smarter Not Harder

 


A supply and demand crisis in the Solar industry for Investors has led to some unique opportunities for Entrepreneurs, Solar Salespeople, Developers and Property Owners!

By: Joseph Loud – President, AED

Entrepreneurs looking for the ‘Next Big Thing,’ Real Estate Professionals and Investors, Solar Sales and Development experts and Property Owners; read this or risk missing out on a lucrative opportunity!

Some of the most important stakeholders in the Solar industry, the Long-Term Investors we all count on to fund projects, are currently suffering from a certain kind of crisis that can also be perceived as an incredible opportunity for us to help ourselves by helping them.

Their Crisis

Hedge Funds, Private Equity, Institutional Investment Groups and even some Investor Owned Utility Companies all around the country are in the process of discovering that they’ve been overly optimistic with respect to their fundraising and acquisition strategy. They’re having a difficult time getting their hands on enough ‘shovel ready’ Solar projects to keep up with the commitments they made when they raised the capital for their 2019 thru 2021 Solar acquisitions fund or initiative.

It seems that for years now, every Solar Investment Group we’ve talked to has been hell bent on acquiring and turning on 100MW or more of Solar by 2022 and they all want it ASAP. The incremental step-down of the Federal Investment Tax Credit (30% in 2019, 26% in 2020 and 22% in 2021 before dropping down to 10% thereafter) has been the biggest driver of this ‘Solar Gold Rush’ we’ve seen. With a lot of groups raising capital the conventional thinking has been “if we raise it, the deals will come.”

That’s the thing though… there’s only a certain number of projects available in each market that have actually received their ‘Notice to Proceed;’ historically the stage a project would have to reach in order for it to be transactable which normally takes over a year to achieve.

Our Cure

Most Investors lack the time, expertise, and patience to get involved with New Project Origination. To this group, an opportunity isn’t even real until it’s reached a stage where they can write a check for it. Due to the shortage of projects at NTP, especially in the more competitive Solar markets like here in the Northeast, we pivoted to a new process that relies on hungry Investors who are willing to look at transacting much earlier, as long as we could check all the right boxes. We’re happy to report that it’s now working – we were right (great call Mr. Kuhn)!

The best thing about this new process is that by working together, we can actually get money flowing in a handful of weeks instead of many months if not years, everyone wins. The bar has now been lowered when it comes to what qualifies as a project that’s ‘Ready for Acquisition’ and the market for projects has never been more competitive. What we need now are more properties to run through our process and that’s something we could use help with.

We’ve developed the #secretrecipe to turn Real Estate into Ready for Acquisition Solar Projects within WEEKS, not Months or Years… ARE YOU CURIOUS AS TO HOW WE DID IT?

BY WORKING SMARTER, NOT HARDER!

Contact us for more information.

TOP 3 Drivers for the lack of sufficient Shovel-Ready Solar Project Inventory:

1. EXTREMELY LONG WAIT TIMES FOR INTERCONNECTION
The Utility Companies, especially in busy and competitive Solar markets are either ill-equipped to handle the onslaught of interconnection applications they’ve been receiving from Developers or they’re actively obstructing progress on purpose, being that they see our industry as their principal competitor. In my opinion we’re experiencing both at the same time.

2. NOT ENOUGH BRAVE MONEY TO KEEP SCALING WHILE WAITING
Most Developers lack the resources necessary to have more than a handful of the types of projects, that are most attractive to Investors under development at a time. The costs for engineering, interconnection applications, impact studies and the dreaded first 25% of the fee for interconnection (that becomes past-due within 31 days of receiving an approval that probably cost you over a year of your time) $100K of your hard earned cash (or more… sometimes much… more) are all contributing factors.

3. BUSINESS DEVELOPMENT IS A FULL TIME EFFORT WHEN FOCUSED UPON
Most Developers get so busy developing projects they don’t leave themselves enough time to put forth a continuous business development effort.

We’re Doing Our Energy Accounting Wrong

Does energy from fossil fuels really cost less than renewable energy? It’s an important question, as it should be shaping our lives. But given the way we do our accounting we will never know, and won’t be able to make rational policy decisions.

The renewable energy industry is forever trying to reduce its cost of equipment, capital, and operations in order to compete with electricity costs form other sources, such as fossil fuels. It is often thought of as the ‘alternative energy’, which always seems to need tax incentives or other subsidies in order to be cost effective (even though research shows that the oil and gas companies get more than 10 times the subsidies than renewables do).
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Under All is the Energy

The National Association of Realtors has a tag line which reads “Under All is the Land”, which they use to exemplify how real estate is fundamental to society. As a former Realtor who is also passionate about energy, I’ve always wanted to correct them. Their phrase is catchy, but it’s wrong.

The growth of society – of humanity in fact – is one of thermodynamics, not land. Matter itself condenses out of pure energy to form quarks, and then atoms, which use atomic energies to go on to form molecules, which then form dirt, cells, stardust, and you and I. We are made of energy.
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The Future of Product Pricing

Mankind, especially as exemplified in western culture, has developed into a ‘throw away’ society with a like-minded economy.

For the past century now, products have been made inexpensive by using processes and materials which minimize labor input at the expense of energy input, such as automated molding and machining. (It used to be that the material was expensive and the labor was cheap. Now the material processing is cheap and the labor is expensive.)
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Where is Our Planetary Warehouse Manager?

I have argued before that the price of products should include the cost of returning the materials used to create the product to their natural state in order for market pricing pressures to evolve more environmentally friendly products. But there is another way that our ‘free market’ capitalism fails us when it comes to long term sustainability.

In the free market system products are generally priced on the current supply and demand, with most of the cost of a product representing the manufacturing process costs, along with overhead and profit margins. While AVAILABILITY of the finished good does come into play (such as a limited supply of gold or diamonds), the LONG TERM availability of the resource is more often ignored, as long as current market pressures can be satisfied.
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Why Electricity Costs Will Soon Level Off

Or, ‘Why we do not have to fear high energy prices in the future.’

Many people, including policy makers, worry about the cost of electricity rising so high in the future that it causes a have/have not society, economic Armageddon, or at least, place a drag on economic production. This is especially true in the USA, where energy costs are still among the lowest in the world, and even a doubling of electrical prices is seen as a catastrophe. But that is not what is going to happen.

As a technical business person who has been involved in the energy fields for nearly 40 years I have seen a glimpse of the future of electricity pricing in the form of island nations and remote villages. I have come to understand and experience why electricity prices will stabilize, after rising somewhat more, and why we don’t have to fear the worst. The sooner our policy makers also see this, the sooner we will be willing to accept a short term rise in electrical prices in exchange for the longer term benefits of environmental health and climate stability. At the moment we tend to view these paths as mutually exclusive: an expensive ‘choice’ we need to make where we can either have affordable energy, or we can have a a clean, sustainable future. In reality we will have both. Here’s why:
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