‘The status quo is no longer going to cut it’: Investor confidence sky high but ACORE calls on solar funds go further still

Construction of a US solar plant underway. Image: Nextracker.

The confidence of renewable energy investors and developers stands at an “all-time high”, a new report by the American Council on Renewable Energy (ACORE) claims, however investment must surge in the coming years if the US is to meet decarbonisation goals.

Today ACORE has published its ‘Expectations for Renewable Energy Finance in 2021-2024 report, which details the findings of a survey of prominent renewable financiers and developers regarding their confidence in the sector.

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Among the report’s key findings are that more than two-thirds of investors surveyed (68%) intend to increase their investments in the renewable energy sector this year compared to 2020, with utility-scale solar and energy storage ranking among the most popular destinations of investment among those surveyed over the next three years.

Specific markets in the US to rank as particularly attractive are the PJM, CAISO and NYISO electricity markets, reflecting a boom in financing and development activity in these markets.

But those surveyed also raised concerns about the availability of tax equity, which remains the source of financing hardest hit by the onset of the COVID-19 pandemic. That conclusion compounds comments made during PV Tech publisher Solar Media’s Solar and Storage Finance USA event last November, where investors said the solar tax equity market was the first to freeze up as the pandemic set in early last year.

At the time Jonathan Gross, chief investment officer at Alchemy Renewable Energy, said that while there had been some resurgence in tax equity availability by November, “the tax equity world is almost still in lockdown”.

The survey results come as ACORE charts the US’ progress towards a goal established by the trade association in 2018 for the country to attract US$1 trillion of investment into renewables and other clean energy technologies by the end of the decade. While investment decreased last year, caused predominantly by a fall-off in investments in onshore wind, investment is expected to bounce back in 2021.

Having raised around US$167 billion so far, an average of US$92.6 billion will be needed in each year for the rest of the decade, representative of a 59% increase over 2020 investment, ACORE said.

Gregory Wetstone, chief executive at ACORE, said if the US is to meet the trade association’s target, and by extension President Biden’s aim of decarbonising the power sector by 2035, then “the status quo is no longer going to cut it”.

“Renewable sector investors and developers seem to understand that this is the moment to accelerate investment in renewable energy and grid-enabling technologies to avoid the worst impacts of climate change,” he said.

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