Capitalizing America’s Clean Energy Dream

Reliance on renewable sources of energy is no longer a pie-in-the-sky vision for the future; it is going mainstream. The energy needs of the United States are being met using sustainable, clean forms of fuel, like solar and wind. In the last decade, great progress has been made in creating markets for clean, renewable fuels. This required a host of measures including: public and private-sector demand, public policy initiatives, federal tax incentives, cost reductions for materials and installation, product innovations, and, just as important, capital.

The volume of programs generating clean energy, with more on the way, demonstrates demand for renewables. A move to clean energy is being made by states, municipalities, universities, businesses, and individuals. The investment is being made with a high level of enthusiasm and public support. There is excitement to innovate, to generate clean energy, to save money, and to participate in endeavors to save the planet. Now, after a long, uncertain journey, this sector has the wind at its back.

In comparison to conventional forms of energy, emerging technologies such as wind, solar photovoltaics (PV), light emitting diodes (LEDs), and electric vehicles, for example, have experienced significant cost reduction and deployment growth in recent years. Commitments to clean energy have a heightened sense of urgency as the rest of the world invests billions of dollars in clean-tech research and development, and U.S. companies and institutions accelerate their efforts in an attempt to win the clean energy race.

Renewable energy, once advocated primarily for environmental reasons, now has proponents representing a range of interests, including free markets, energy security, independent energy production, off-grid living, and cost reduction. The U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy reports that a $12 billion taxpayer investment in clean energy has yielded an estimated net economic benefit to the U.S. of more than $230 billion, with an overall annual return on investment of more than 20 percent.

Solar

In early 2016, the George Washington Solar Institute reported that the United States reached 1 million solar installations. It’s on track to reach 4 million solar installations by 2020, generating enough solar energy to power 20 million homes. Then, by 2025, the U.S. will be on pace to install 1 million solar systems annually. Though solar currently supplies only 1 percent of U.S. electricity, it accounted for 30 percent of new capacity in 2015. Nearly 1 million Americans, and nearly 57,000 businesses and nonprofits are producing their own power. High-profile companies, including Apple and General Motors, have committed to long-term sustainable energy sources. Apple produces and procures clean energy from solar and wind for 93 percent of its power needs. Other signs that solar is becoming mainstream is the job growth within the sector. There are now more than 200,000 people working in the solar industry, a 123 percent increase in the last five years.

Wind

The use of wind energy is accelerating rapidly too. Currently, there are more than 53,000 utility-scale wind turbines operating in the U.S., powering 25 million homes, and 41 states have utility-scale wind energy projects. The wind industry employed more than 100,000 people at the end of 2016. High-profile public companies like Facebook have invested in large-scale sustainable energy projects that set an example for the business world. Facebook built a data center in Altoona, Iowa, that is run solely on wind power, and it set a goal of using 50 percent renewable energy sources at its data centers by 2018. Its plans include powering a new data center in Fort Worth, Texas, with 100 percent wind energy. To help companies transition to renewable energy, Facebook shares its “playbook” for developing wind-powered data centers.

Grid modernization

A major goal of the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy 2016-2020 strategic plan is to modernize current grids, enabling the integration of clean electricity into a reliable, resilient and efficient power-system grid. This effort draws on comprehensive research and development of integrated devices, sensing, measurement, forecasting, operation controls, system design, security and resilience. Many scholarly and technological specialists are working together toward this pursuit and the business climate is generally favorable for these innovations.

Another indicator that renewable energy is gaining momentum is the number of states with alternative energy initiatives underway. In the state of Vermont, the non-profit organization, Renewable Energy Vermont (REV), was formed to promote and strengthen the state’s renewable industry. REV is a coalition of concerned citizens, businesses, energy co-ops, renewable energy developers, service-sector companies working in the renewable energy field, and academic institutions, among others, that have a mission to increase Vermont’s use of renewable energy.  One of every 16 Vermont citizens has employment connected to renewable energy or clean transportation

Among the members of REV is manufacturer AllEarth Renewables, which is headquartered in Williston, Vermont. The company manufactures a dual-axis solar tracker that follows the sun and produces up to 45 percent more energy than rooftop solar. It has manufactured more than 4,000 systems to date for installation in the U.S, and its dual-axis solar tracker was named a “Top Green Product” by BuildingGreen magazine and “Top Product of the Year” by Solar Power World. AllEarth Renewables is one of the leading solar installers in Vermont, and provides solar energy to correctional facilities, nonprofit organizations, schools, and municipalities. Public institutions are leading by example.

Crestmark funds solar projects in Vermont

Crestmark Bank, which has been providing alternative financing solutions to small- and medium-sized businesses for 20 years, was pleased to work with Pennsylvania-based developer Alternative Energy Development Group (AEDG) on financing to construct four 500kW (AC) solar projects for the state of Vermont.

First, Crestmark funded $2 million in 2014 for the St. Johnsbury Correctional Facility, one of the largest users of electricity in Vermont. In 2015, Crestmark provided $1.7 million for the Southern State Correctional Facility in Springfield and the State Office Complex. Two more projects were completed in 2015. Such initiatives have helped Vermont become a national leader in solar jobs per capita (third in the country), where the number of solar jobs grew by 29 percent last year, according to a report by The Solar Foundation.

Crestmark provided a creative combination of sale and leaseback transactions. Through a power purchase agreement, the state of Vermont negotiated a 20-year contract to purchase clean, renewable power at low, predictable rates. Since these projects went online, the state of Vermont released its 2016 State Agency Energy Plan, which calls for a 20 percent reduction in total energy consumption by 2025, and 24 percent by 2030; and to get 30 percent of its remaining energy requirements from renewable sources by 2025, increasing to 45 percent by 2030.

“Crestmark was excited to provide the financing to AEDG, a solid performer in the growing alternative energy industry. The AEDG team has a great reputation in the industry, and we hope to have a long-term relationship with them that is beneficial to both companies, and that is instrumental in bringing more alternative energy projects to the U.S.,” said Larry Pearce, Crestmark executive vice president and Joint Ventures Group president.

Financing and access to capital will be essential to the progress of this energy sector. Companies like Crestmark have an important role to play in bringing clean energy to businesses, cities and households.

This sector is one of the bright spots in the U.S. economy, and with the right support, it offers some of the best opportunities for small- and medium-sized businesses for decades to come.

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