Renewable Energy Financing
Global new investment in renewable power and fuels (not including hydropower projects >50 MW) was USD 270 billion in 2014, up from $45 billion in 2004. Growth in renewable energy investment is expected to continue over the next decades, with innovative new forms of investment and finance, as well as new business models.
This page, starting with a comprehensive overview of financial instruments for renewable energy investment, provides publications and sources of information on renewable energy finance, including investment trends, supportive policy frameworks, developing countries, crowd-funding, and news websites.
Financial Instruments for Renewable Energy Investment Comprehensive References
Renewable Energy Investment: Trends, Policies, and Challenges
Renewable Energy Finance in Developing Countries
Renewable Energy Crowdfunding
Green Technology Finance Websites
Most of the links suggested in this section aim to reach policy makers, particularly in developing countries, but not only. All of them supply good basic and/or advanced information for a comprehensive understanding of financial instruments designed for investment in renewable energy.
The World Bank "Renewable Energy Financial Instrument Tool (REFINe)" is an interactive web tool aiming at helping users to better understand experiences with financial instruments in order to scale up renewable energy projects. Intends in particular to assist policymakers in low-income countries in identifying how to apply financial instruments funded from public and concessionary sources. A "Knowledge Center" section provides links to some referenced publications, a "case studies" section provides links to more than 40 case studies, and a "glossary" section provides definitions of financial instruments, on- and off- grid technologies, technology risks, and financing barriers.
National Renewable Energy Laboratory (NREL) "Renewable Energy Project Finance" aims to inform decision makers in the renewable energy field by covering topics such as project-level finance (terms, structures, and innovations), renewable energy policy at the national, state and municipal levels, and state-of-the-market for most commercial and some emerging renewable technologies.
The World Bank "Renewable Energy Toolkit (REToolkit)" aims to help identify and design feasible renewable energy projects, determine appropriate promotional policies, identify sustainable business models, finance mechanisms, and regulatory frameworks by providing a broad set of tools.
Clean Energy States Alliance (CESA) "Clean Energy Finance" provides technical assistance, webinars, and new finance toolkits designed to assist states to build greater understanding of how the private financial sector views clean energy projects today, and explore use of innovative, flexible financing tools that can leverage available state clean energy funds.
Database of (U.S.) State Incentives for Renewables & Efficiency (DSIRE) is an exhaustive database that keeps track of financial incentives promoting renewables & energy efficiency in the United States. By clicking on a State, website's visitors are redirected on a page where existing incentives/policies for renewable energy & energy efficiency in the selected State are listed, and where complete information on specific programs are available.
United Nations Development Programme (UNDP) "Environmental Finance" is a collection of over 20 reports dealing with climate change finance in various ways.
What Is Climate Finance? Definitions to Improve Tracking and Scale Up, Angela Falconer and Martin Stadelmann (San Francisco, CA: Climate Policy Initiative, 2014), 9 pp. A brief explaining CPI's understanding and definition of key climate finance terms and the reasons for these definitions to inform the debate and build a common understanding among stakeholders.
Global Trends in Renewable Energy Investment 2015, Frankfurt School-United Nations Environment Programme Collaborating Centre for Climate & Sustainable Energy Finance/Bloomberg New Energy Finance (Frankfurt, Germany: FS-UNEP/BNEF, 2015), 86 pp. 2014 brought a rebound of green energy investments worldwide with a surge of a solid 17% to $270 Billion. Brushing aside the challenge of sharply lower crude oil prices this sudden increase reveresed the investment dip of the past two years and was mainly driven by investments in solar and wind energy.
Renewable Energy Benefits: Measuring the Economics, International Renewable Energy Agency (Abu Dhabi: IRENA, 2016), 92 pp. Using a macro-econometric approach, the report takes into account the linkages between the energy system and the world's economies within a single quantitative framework. Shows that the impact of a transition to 36% renewables would benefit economic growth, welfare and employment.
The impact of risks in renewable investments and the role of smart policies - Final Report, Policy Dialogue on the assessment and convergence of RES policy in EU Member States (DiaCore, 2016), 172 pp. Aims at providing an estimation of the current cost of capital for wind onshore projects across the EU and assessing the impact of policy design changes on cost of capital.
Global Landscape of Climate Finance 2015, Barbara Buchner, Chiara Trabacchi, Federico Mazza, Dario Abramskiehn and David Wang (Climate Policy Iniative, 2015), 17 pp. presents comprehensive information available about which sources and financial instruments are driving investments, and how much climate finance is flowing globally. It aims to provide an updated picture on how, where, and from whom finance is flowing toward low-carbon and climate-resilient actions globally, and to improve understanding of how public and private sources of finance interact.
Climate Finance in 2013-14 and the USD 100 Billion Goal, Organisation for Economic Co-operation and Development in collaboration with Climate Policy Initiative (Paris, France/San Francisco, CA: OECD/CPI, 2015), 68 pp. Provides an up-to-date aggregate estimate of mobilized climate finance and an indication of the progress towards the UNFCCC climate finance goal.
What Counts: Tools to Help Define and Understand Progress Towards the $100 Billion Climate Finance Commitment, Climate Policy Initiative/World Resources Institute/Overseas Development Institute (San Francisco, CA/Washington, DC/London, UK: CPI/WRI/ODI, 2015), 27 pp. Distills the debate into five key variables that have emerged as relevant to what Parties consider to "count" as climate finance: motivation, concessionality/source, causality, geographic origin, and recipient.
The Landscape of Climate Exposure for Investors, Dario Abramskiehn, David Wang, and Barbara Buchner(San Francisco, CA: Climate Policy Initiative, 2015), 28 pp. Explores the landscape of climate exposure and examines the strengths as well as some of the current limitations of environmental, social, and governance data, tools, and financial products.
Background report for G7 on long-term climate finance, Prepared by Center for International Climate and Environmental Research - Oslo/Climate Policy Initiative for Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (Eschborn, Germany: CICERO/CPI for BMUB, 2015), 88 pp. Aims to inform discussions on how to scale up climate finance to meet low-carbon, climate-resilient investment needs and discusses current investment levels, future needs, and potential solutions that support developed countries' commitment to mobilize USD 100 billion per year for climate action in developing countries by 2020.
Getting the most from your green: An approach to using public money effectively through green banks and other low-carbon financing, Jeff Deason, Uday Varadarajan, and Patricia Levi (San Francisco, CA: Climate Policy Initiative, 2015), 16 pp. An overview of CPI's approach to determining the most efficient ways in which green banking and other public financial interventions could support the transition to a low-carbon economy.
Overcoming Barriers to International Investment in Clean Energy, Organisation for Economic Co-operation and Development (Paris, France: OECD, 2015), 148 pp. Notably shows that local-content requirements have hindered international investment across the solar PV and wind-energy value chains, by increasing the cost of inputs for downstream activities.
Mapping Channels to Mobilise Institutional Investment in Sustainable Energy, Organisation for Economic Co-operation and Development (Paris, France: OECD, 2015), 146 pp. Develops a framework that classifies investments according to different types of financing instruments and investment funds, and highlights the risk mitigants and transaction enablers that intermediaries (such as public green investment banks and other public financial institutions) can use to mobilise institutionally held capital.
Policy Guidance for Investment in Clean Energy Infrastructure, Organisation for Economic Co-operation and Development (Paris, France: OECD, 2015), 116 pp. Notably provides governments with guidance on the policy options that are available to make the most of private investment opportunities in clean energy infrastructure, drawing on the expertise of climate and investment communities among others.
A Homeowner's Guide to Solar Financing: Leases, Loans, and PPAs, Nate Hausman (Montpelier, VT: Clean Energy States Alliance, 2015), 26 pp. A guide to help homeowners navigate the complex landscape of residential solar photovoltaic system financing.
World Energy Investment Outlook - Special Report, International Energy Agency (Paris, France: IEA, 2014), 190 pp. With benchmark data on past investment trends and updated projections for investment at regional and global level, the report provides insights into: the structure of ownership and models for financing investment in different parts of the energy sector.
The Socio-economic Benefits of Solar and Wind Energy, International Renewable Energy Agency (Abu Dhabi: IRENA, 2014), 108 pp. Presents a conceptual framework for analysing macroeconomic, distributional, energy-related and other effects of large-scale renewable energy deployment.
Getting the most from your green: A case study for using public money effectively for large-scale renewable energy in California, Jeff Deason, Uday Varadarajan, and Patricia Levi (San Francisco, CA: Climate Policy Initiative, 2014), 12 pp. Presents CPI's analysis of the financial barriers affecting large-scale renewable energy in California.
RE-COST, Prepared by Prysma on behalf of International Energy Agency Renewable Energy Technology Deployment (Madrid, Spain: Prysma on behalf of IEA-RETD, 2013), 212 pp. Provides tools and insights to policy makers and other actors in the electricity sector to enable them to better assess the impact of policies and regulations on the attractiveness of investments in a variety of sources of electricity generation.
The Challenge of Institutional Investment in Renewable Energy, David Nelson and Brendan Pierpont (San Francisco, CA: Climate Policy Initiative, 2013), 92 pp. Estimates the scale of potential institutional investment in renewable energy and identify both barriers and potential solutions for reaching this potential.
Reduce Risk, Increase Clean Energy: How States and Cities are Using Old Finance Tools to Scale Up a New Industry, Clean Energy Group/Council of Development Finance Agencies (Montpelier, VT/Columbus, OH: CEG/CDFA, 2013), 34 pp. Shows how a "quiet revolution" in clean energy financing is happening at the state level, with states and cities using well established conventional tools.
Supporting sustainable, competitive and secure energy in Europe, European Investment Bank (Luxembourg: EIB, 2013), 8 pp. Presents EIB's actions for a greener European Union.
Business models for Renewable Energy in the Built Environment, L. Wurtenberger, M. Menkveld, P. Vethman, and X. van Tilburg (Energy research Centre of the Netherlands)/J.W. Bleyl (Energetic Solutions) (Petten, the Netherlands/Graz, Austria: prepared for the International Energy Agency-Renewable Energy Technology Deployment, 2012), 131 pp. Focuses on business models for increasing the deployment of renewable energy technologies in the built environment.
Renewable Energy Sources and Climate Change Mitigation Special Report - Chapter 11: Policy, Financing and Implementation, Intergovernmental Panel on Climate Change (Cambridge/New York, NY: IPCC, 2011), 1075 pp. Addresses the role of policies and an enabling environment in making financing available and affordable.
Strategies to Finance Large-Scale Deployment of Renewable Energy Projects: An economic development and infrastructure approach, Lewis Milford, Ross Tyler, and Jessica Morey (Clean Energy Group) (Montpelier, VT: prepared for the International Energy Agency-Renewable Energy Technology Deployment, 2011), 58 pp. Provides specific recommendations, based on proven practices and emerging ideas from the OECD and non-OECD countries, to scale up large-scale renewable energy finance.
Renewable Energy Financing and Climate Policy Effectiveness CPI Analysis Framework (Working Paper), Brendan Pierpont, Uday Varadarajan, David Nelson, and Anne Schopp (San Francisco: Climate Policy Initiative, 2011), 18 pp. Provides an initial framework for understanding the link between policies, finance, and policy effectiveness outcomes.
The Financing of Renewable Energies (in German), Markus Gerhard, Thomas Ruschen, and Armin Sandhovel (Frankfurt: Frankfurt School Verlag, 2011), 1,200 pp. Offers a comprehensive, practice-oriented background of renewable energy financing.
Public Support for the Financing of RD&D Activities in New Clean Energy Technologies, Luis Olmos, David Newbery, Sophia Ruester, Siok Jen Liong and Jean-Michel Glachant (Firenze, Italy: European University Institute, 2011), 73 pp. Contributes a discussion on how to build a balanced portfolio of RD&D projects, choose among financing instruments, and design public support to minimize the risk of "funding failure."
Project Finance Primer for Renewable Energy and Clean Tech Projects, Chris Groobey, John Pierce, Michael Faber, and Greg Broome (Palo Alto, CA: Wilson Sonsini Goodrich and Rosati, 2010), 17 pp. Provides an overview of project finance for renewable energy investor, as well as a survey of key concepts and requirements, and other key structuring considerations in determining whether to project finance.
The Impact of the Financial and Economic Crisis on Global Energy Investment: IEA Background paper for the G8 Energy Ministers' Meeting 24-25 May 2009, International Energy Agency (Paris: IEA, 2009), 66 pp. Describes how the financial and economic crisis affects energy investment, and notably renewables-based power-generation investment, and what governments should do to support clean energy investment.
Private Financing of Renewable Energy: A Guide for Policymakers, United Nations Environment Programme's Sustainable Energy Finance Initiative, Bloomberg New Energy Finance, Chatham House (UNEP SEFI, BNEF, Chatham House, 2009), 25 pp. Covers how finance generally works, what the actors of the finance sector do, the issues financiers consider when investing, and the challenges that face those seeking financing for renewable energy developments.
Investment Opportunities in Latin America (Global Atlas): Suitability maps for grid-connected and off-grid solar and wind projects, International Renewable Energy Agency (Abu Dhabi: IRENA, 2016), 24 pp. Provides a region-wide pre-feasibility assessment of solar and wind opportunities in Latin America, for both grid connected and off-grid systems.
Investment Opportunities in the GCC (Global Atlas): Suitability maps for grid-connected and off-grid solar and wind projects, International Renewable Energy Agency (Abu Dhabi: IRENA, 2016), 22 pp. Provides a region-wide pre-feasibility assessment of solar and wind opportunities in the Gulf Cooperation Council (GCC) region, for both grid connected and off-grid systems.
Southeast Asia and the Economics of Global Climate Stabilization, Asian Development Bank (Mandaluyong City, Philippines: ADB, 2016), 191 pp. Suggests that the impacts of climate change in Southeast Asia may be larger than previously estimated, possibly reaching 11% of gross domestic product by 2100.
Models for Financing Clean Infrastructurein Middle Income Countries, Anshuman Sahoo, David Nelson and Andrew Goggins (San Francisco, CA: Climate Policy Initiative, 2015), 59 pp. Explores the infrastructure investment models used by India and Brazil.
Risk Mitigation Instruments for Renewable Energy in Developing Countries: A Case Study on Hydropower in Africa, Gianleo Frisari and Valerio Micale(San Francisco, CA: Climate Policy Initiative, 2015), 44 pp. A detailed analysis of the financial structure of a large scale low-carbon project in a high-risk environment.
Lessons on the Role of Public Finance in Deploying Geothermal Energy in Developing Countries, Valerio Micale and Padraig Oliver (San Francisco, CA: Climate Policy Initiative, 2015), 26 pp. Shows that by enabling private investment, governments can achieve the same amount of electricity generation while providing much less of the financial resources they would have spent had they built and operated projects themselves.
Renewable Energy in Hybrid Mini-Grids and Isolated Grids: Economic Benefits and Business Cases, Frankfurt School-United Nations Environment Programme Collaborating Centre for Climate & Sustainable Energy Finance (Frankfurt, Germany: FS-UNEP, 2015), 92 pp. Compares the costs of diesel-only and hybridised mini-grids at seven sites ? three in Africa, two in Asia and three in Latin America ? and shows potential cost savings at all seven sites.
Business Models to Realize the Potential of Renewable Energy and Energy Efficiency in the Greater Mekong Subregion, Asian Development Bank (Mandaluyong City, Philippines: ADB, 2015), 50 pp. Notably provides outlines of business models relevant to pursuing the renewable energy and energy efficiency targets adopted by the five Greater Mekong Subregion countries: Cambodia, the Lao People's Democratic Republic, Myanmar, Thailand, and Viet Nam.
Summary Report of The Public Private Dialogue on Renewable and Clean Energy Trade and Investment, Asia-Pacific Economic Cooperation (Singapore: APEC, 2015), 144 pp. Aims to help to fulfil the APEC Leaders' recognition that "...joint research, development, deployment and transfer of technologies will be crucial in our shared efforts to address climate change."
Solving India's Renewable Energy Financing Challenge: Instruments to Provide Low-cost, Long-term Debt, Gireesh Shrimali, Charith Konda, and Sandhya Srinivasan (San Francisco, CA: Climate Policy Initiative, 2014), 31 pp. Explores financing instruments, used in other regions as well as those that were recently introduced in India in other contexts that have the potential to provide and/or facilitate low-cost, long-term debt for renewable energy in India.
Finance Mechanisms for Lowering the Cost of Renewable Energy in Rapidly Developing Countries, David Nelson and Gireesh Shrimali (San Francisco, CA: Climate Policy Initiative, 2014), 20 pp. Looks at creative policy solutions that could potentially reduce the cost of renewable energy support.
Africa Energy Outlook, International Energy Agency (Paris, France: IEA, 2014), 242 pp. Notably shows how investment in the sub-Saharan energy sector can stimulate rapid economic and social development across the region.
Challenges and Approaches for Renewable Energy Finance in Ghana, Gordon Adisenu-Doe (Accra, Ghana: Cornerstone Capital Advisors ltd., 2014), 10 pp. Introduces renewable energy financing challenges in Ghana and suggests a market entry approach notably.
San Giorgio Group Report: The Role of Public Finance in Deploying Geothermal - Background Paper, Valerio Micale, Padraig Oliver, and Fiona Messent(San Francisco, CA: Climate Policy Initiative, 2014), 25 pp. Focuses on the effective use of public finance to scale up geothermal deployment in developing countries.
Green Economy and Trade Trends, Challenges and Opportunities - Chapter 6: Renewable Energy, United Nations Environment Programme (Nairobi, Kenya: UNEP, 2013), 298 pp. Identifies the trends and trade opportunities in the renewable energy sector associated with a transition to a green economy. Explores how developing countries can respond to international demand for sustainable goods and services in this sector.
Business Model Framework: Financial Instruments, Green Climate Fund (Songdo, South Korea: GCF, 2013), 21 pp. Presents an assessment of options for financial instruments that the GCF could employ to attain its objectives of providing support to developing countries to limit or reduce their greenhouse gas emissions and to adapt to the impacts of climate change.
Financing Low-Carbon Urban Development in South Asia: A Post-2012 Context, Asian Development Bank (Mandaluyong City, Philippines: ADB, 2013), 26 pp. Notably guides readers on how to access carbon finance and highlights good practices in low-carbon urban development. Aimed at government officials and project developers throughout South Asia.
APEC Workshop on Best Practices on Financing Renewable Energy - Summary Report and Presentations, Asia-Pacific Economic Cooperation (Singapore: APEC, 2013), 65 pp. On 4-5 June 2013, the APEC Workshop on Best Practices on Financing Renewable Energy was held in Hanoi, Vietnam. It was targeted to analyze the current situation, statistics and experiences with financing renewable energy in the APEC region. A Summary Report provides the outcomes of the Workshop's discussions. The Workshop's presentations are also available.
Unlocking Commercial Financing for Clean Energy in East Asia, Xiaodong Wang, Richard Stern, Dilip Limaye, Wolfgang Mostert, and Yabei Zhang (Washington, DC: World Bank, 2013), 284 pp. Draws lessons from recent experience in applying public financing instruments in the energy efficiency and renewable energy sectors, and attempts to address the following issues: when and under what circumstances to use public financing instruments, which instrument to select, and how to design and implement them most effectively.
Renewable Energies in the Middle East and North Africa: Policies to Support Private Investment, Organisation for Economic Co-operation and Development (Paris: OECD, 2013), 132 pp. Identifies the appropriate support policies required to stimulate the necessary private investment for a stronger deployment of renewables in the Middle East and North Africa.
Financing Renewable Energy: Options for Developing Financing Instruments Using Public Funds, World Bank (Washington, DC: World Bank, 2013), 60 pp. Aims to assist policy makers in low-income countries to develop and apply financing instruments to scale up the deployment of renewable energy technologies.
Moving the Fulcrum: A Primer on Public Climate Financing Instruments Used to Leverage Private Capital, Shally Venugopal and Aman Srivastava (Washington, DC: World Resources Institute, 2012), 36 pp. Aims to demonstrate how the public sector can employ different types of public financing instruments alongside policy and technical support to scale-up private sector investment in developing countries' low-carbon markets.
Financial Mechanisms and Investment Frameworks for Renewables in Developing Countries, International Renewable Energy Agency (Abu Dhabi: IRENA, 2012), 111 pp. Presents analyses of financing trends and mechanisms, investment frameworks, policies, and enabling conditions for renewable enrgy in the developing world.
Investing in a Climate for Change: UNEPs Energy Finance Programme: Scaling Up Clean Technology Investment, United Nations Environment Programme (Paris: UNEP, 2012), 19 pp. Details UNEP's energy finance strategy by highlighting some of the organization's ongoing or recently completed energy finance programmes that show how clean technologies can be made affordable to end-users and attractive to investors.
Taking Stock of Bank Activities in Energy, Environment and Climate Change, African Development Bank (Tunis, Tunisia: AfDB, 2012), 40 pp. Summarizes the actions undertaken by the African Development Bank in the areas of energy, environment and climate change.
Financing Renewable Energy in Developing Countries: Mechanisms and Responsibilities, Stephany Griffith-Jones, Jose Antonio Ocampo, and Stephen Spratt (Brussels: European Report on Development, 2012), 41 pp. Reviews the instruments currently in use to finance renewable energy in developing countries, and considers those that have been proposed but not yet fully employed.
World Energy Outlook 2011 - Special Report - Energy for All: Financing access for the poor, International Energy Agency (Paris: IEA, 2011), 52 pp. Provides updated estimates of the number of people lacking access to electricity and clean cooking facilities, by country. Offers an estimate of the total amount of investment taking place globally to provide access to modern energy services. Provides details on the sources of financing. And examines what level of modern energy access might be achieved by 2030.
Investing in Renewable Energy in the MENA Region: Financier Perspectives, Kirsty Hamilton (London: Chatham House, 2011), 27 pp. Presents the insights of leading renewable energy financiers on the current opportunities and blockages to potential investment in the Middle East North Africa region.
Study on the financing of renewable energy investment in the Southern and Eastern Mediterranean Region, European Investment Bank (Luxembourg: EIB, 2010), 132 pp. Aims to assess the level of maturity of the existing or planned renewable energy projects in the Mediterranean Partner Countries (Algeria, Egypt, Gaza/West Bank, Israel, Jordan, Lebanon, Morocco, Syria, and Tunisia).
Scaling up Renewable Energy in Developing Countries: finance and investment perspectives, Kirsty Hamilton (London: Chatham House, 2010), 38 pp. Provides a basis for understanding conditions for scaling up investment in renewable energy.
Financing of Sustainable Energy Solutions, African Development Bank (Tunis, Tunisia: AfDB, 2010), 13 pp. Summarizes the public finance sources and measures to attract private investments in renewable energy. Also discusses other innovative financing mechanisms designed to raise additional funds, and ways to optimize both private and public, financing methods, and examines the role of multilateral development banks.
Renewable energy crowdfunding is a collective effort of individuals who network and pool their money, usually via the Internet, to support the development of renewable energy projects initiated by other people or organizations. It can also refer to the funding of a company by selling small amounts of equity to many investors.
The following suggested article describes one of the most significant early examples of renewable energy crowdfunding initiative: " Dutch Wind Turbine Purchase Sets World Crowdfunding Record," Renewable Energy World.com 24 September 2013. 1,700 Dutch households raised together 1.3 million euros (in just thirteen hours!) to buy shares in a wind turbine.
The following section provides links to some of the most dynamic actors involved in this field:
Mosaic connects investors to solar projects. Thousands of people from across the United States have invested millions of dollars to finance solar projects through the organization's online marketplace.
SunFunder provides affordable capital to solar companies to fund new projects. The organization has invested a few millions of dollars in solar projects.
Abundance links up communities and individuals with renewable energy projects and makes it possible for everyone to share in the benefits of clean energy production. As of early February 2016, the organization had funded a total of 16 renewable energy projects (solar, wind, and biomass).
Solar Schools puts clean energy in classrooms all over the United Kingdom. Schools set a fundraising target for their very own solar roof, then everyone chips in to help make it happen.
The following map indicates which were the most important renewable energy crowdfunding platorms, where they were based, how much money they raised, and how many projects had been funded this way as of September 15, 2015; Renewable Energy Crowdfunding World Map .
The following websites keep track of renewable energy finance information dynamically:
Bloomberg New Energy Finance. Provides insight, data and news of the clean energy market, and notably covers investments in clean technologies. Offers the possibility to sign up to a free weekly e-newsletter; "Week in Review."
Cleantech Finance. Explores, through news and analysis, the many intersections of energy, finance and policy. Covers the various fiels of renewable energy finance; from venture capital to crowdfunding.