Disruption in the energy sector presents significant opportunities for investors, financiers, equipment vendors and solution providers, according to a new study released by the Equipment Leasing & Finance Foundation.
The in-depth study, called "The Impact of New Energy Production Technologies on Equipment Finance - Opportunities and Challenges Shaping the Future of the Finance Industry," forecasts across-the-board growth in energy sectors related to a shift in emphasis from centralized fossil power generation to renewable energy.
Commissioned by the foundation and prepared by Navigant Research, the study reveals that massive disruption across the entire energy value chain will affect a broad set of stakeholders during the next 5 to 15 years.
To meet the challenges and harness opportunities posed by the disruption, the study presents critical intelligence, including market size, finance and lease structures, industry trends and drivers, case studies, and risk factors from a lender and lessor perspective for the following key energy sectors:
- Utility-scale solar PV
- Utility-scale wind
- Utility-scale energy storage
- Intelligent buildings
- Distributed energy resources (DER)
The trifecta of technology cost reductions, business model development, and finance innovations has disrupted the traditional utility business model and opened new opportunities for energy service companies to respond to customer demand for energy solutions that are clean, distributed, intelligent, and mobile. The energy system transformation includes the digital transformation of the electric grid, which, taken together, Navigant Research defines as the Energy Cloud.
Lower solar costs
The U.S. utility-scale solar energy industry has developed over the last ten years driven by regulatory support at state and federal levels. Costs for utility-scale solar have fallen by more than 80% in the last decade and now is the cheapest source of electricity in regions with strong solar irradiance such as in California, Arizona, and Nevada.
As federal and state incentives ramp down in the next five years, and corporate renewable energy procurement increases, costs will continue to drop, opening further opportunities for a growing number of software-enabled demand side “as a service” solutions to be deeply integrated into intelligent buildings. This transformation represents a significant opportunity for investors, financiers, equipment vendors, and solutions providers to develop new ways to meet changing customer needs.
Clean energy finance
When choosing a clean energy financing partner, seek out an entity that can accommodate businesses with customized payments to match budgetary requirements. Also, it's important to find a partner that has clean energy financing experience, understands energy project needs, take the time to ask questions and listens to your responses.
Above all, look for a financing company with a track record in clean energy and a willingness to customize solutions.
Learn about Key Equipment Finance's Clean Energy capabilities here: