#Solar100’s Ray Shem: Solar’s Cassandra

Originally posted on pv Magazine USA.

In this #Solar100 interview, Richard Matsui, Founder and CEO of kWh Analytics, speaks with Ray Shem, CFO at Pine Gate Renewables.

In Greek mythology, Cassandra was gifted by the god Apollo the ability to see the future. She was also cursed to utter prophesies that were true but no one believed—until it was too late.

Today, Ray Shem’s understanding of real estate finance cycle and the solar industry lends itself to sharp analysis of solar’s evolution. In this interview, Shem provides a clear framework for understanding the sponsor equity market and describes a future solar market in which new entrants displace or acquire many of the current incumbents, reshaping the competitive dynamic of the entire industry.

Ray Shem is a solar soothsayer and this month’s featured #Solar100 thought leader.


Richard Matsui: I saw that you have your BA in history from Yale and your MBA from University of North Carolina. What drew you to renewable energy and how did you begin working at Pine Gate Renewables?

Ray Shem: When I graduated from college, I originally thought I wanted to be an attorney. I was randomly assigned to the real estate practice group, and after a year, decided I wanted to work on the principal side of things. Real estate was booming around that time, so I left the law firm to work for a startup real estate developer in D.C. flipping houses in the revitalizing parts of DC. Then I went to Chapel Hill for their real estate program.

After I graduated from UNC in 2008, I took a job working for a medium-sized regional developer based in Charlotte. Two months later, Wachovia was basically bought for a dollar, Lehman failed, and I ended up selling condos for two years—fun. It was actually terrible, but it was formative in terms of gaining experience failing and needing to be creative to move units. After a few years, I ended up running capital markets and acquisitions, raising project debt and equity.

Zoe Hanes, who worked at FLS Energy at the time, was my neighbor and recruited me to go into solar.  I started off doing project finance at FLS, including tax credit equity and project debt, underwriting new investment opportunities, and developing the corporate finance strategy. That’s how I got into this industry.

Richard Matsui: Having witnessed firsthand a full economic cycle in real estate, what lessons do you apply in solar?

Ray Shem: It makes me pretty risk-averse. My biggest lesson was the importance of asset quality. Quality is especially important when things get rough. In 2009, if you had great real estate, you could always move it. Yes, it would sell at a discount, but you could sell it. Bad real estate didn’t move at all. It was just frozen out.

Solar is a little different because of the secular trend of cost reduction. Construction costs are down and the cost of capital is falling. It’s a big tailwind that mitigates some of the volatility. People have made aggressive bets on the cost curve continuing to fall, and to date they’ve been right. Even under the burden of the module tariffs, we’re seeing modules trading at pre-tariff levels. So, there’s still some room there. A development asset that looks bad today may look good in a year.


Richard Matsui: You have an interesting framework you use to describe the sponsor equity market. Can you outline it here?

Ray Shem: I see the world bifurcated into three different types of sponsors: early stage developers, aggregators, and long-term owners.

Early stage developers tend to be hyper-local and in the right place at the right time. You see it in Minnesota, in Massachusetts, South Carolina, and other states. Legislation changes, policies move, and all of a sudden, a bunch of homegrown developers pop into place.

You then have aggregators, folks that have some degree of development experience and can crawl into a deal and understand the risks associated with it. Aggregators have access to larger pools of capital, including tax equity, debt, and some form of sponsor equity. These developers aggregate projects, typically in the “distributed utility” segment, though we’ve also seen this with some C&I as well. These developers create value by aggregating portfolios to a scale that can successfully attract capital from large tax equity and debt providers in the market.

And then you have long-term capital: the infrastructure funds, pension funds, and insurers that want to be long-term owners of these relatively low-risk infrastructure assets.

Aggregators play a role in market-making. In our work, we see a lot of small projects that make sense from an economic perspective. But the scale of those individual projects is too small and requires someone to aggregate them into a portfolio to fit an investor who wants to write a $50 million check.

However, a secular shift is underway. As the mystique around tax equity financing continues to fall away and the tax credit itself steps down, I think you will start to see pressure on the aggregator as a business model. Early stage developers, by deploying high-risk dollars and pushing policy that creates markets, will continue to create and capture value. In the aggregate, they will be fine. But the pie shared by aggregators and long-term owners will increasingly see the value migrate towards longer-term owners.


Richard Matsui: It feels like half of the aggregators in the industry today have a “For Sale” sign in the window. Where do these firms end up?

Ray Shem: It’s a big question. Ultimately, I see two directions:

Some aggregators will begin to increasingly pivot to in-house greenfield development and become early stage developers.

Some aggregators will go in the other direction and sell themselves to long-term owners. The sale of sPower to AES and Aimco a few years back is a classic example of this.  As a result, some of the aggregators are likely trying to position themselves for this kind of exit. The key question is, “How well are they trading?” I know there are a couple out in the market, but I don’t know how those processes are going.

Richard Matsui: I think we, as an industry, are all holding our breath to see the results. Valuation will be the key question. When the purchase price is ultimately paid, that sum will represent the value of the assets on book plus the platform itself.

Ray Shem: Yes, and “platform value” can be an elusive thing. When we were at FLS, we thought we could clearly articulate the case for an acquirer to value the platform itself, and it proved to be somewhat illusory. A lot of value ended up being driven by assets on book.

Richard Matsui: Are you hearing that “platform value” is getting more value than what is has historically?

Ray Shem: I think it is an opaque, illiquid market. Without hard data points or trades that I’m thinking about in particular, my bet is that some platforms are getting value. I think those are probably platforms that had big pipelines, and that is probably where the value ultimately gets attributed. If I were managing low-cost money looking for a home in infrastructure assets, I would also be focused on pipelines, and then making sure that the team was in place that could translate that pipeline into investment opportunities. What I would expect to see is buyers first look at the pipeline, and then they lean into the bid, based on their confidence in the team.


Richard Matsui: Let’s talk about the long-term owners. It seems the category can perhaps be divided into two different groups: strategic and financial. From the strategic side, you have companies like BP and Shell buying Lightsource and Silicon Ranch. One of our own investors is ENGIE, which has acquired SoCore and Infinity Renewables. There are several other active strategics. They generally seem to follow a consistent logic—they want to own the businesses that will build the future energy system. From my perspective, strategic acquisitions appear to be motivated by a desire to internalize the talent and institutional capability, even as assets drive the valuation. But what about the financial long-term owners, like Capital Dynamics or New Energy Solar? Will they be using a different playbook?

Ray Shem: That’s a good distinction to draw. It probably depends on the source of money. Strategics are far more likely to look at a platform transaction. If you’re New Energy Solar, you’re not going to go back to your shareholders and say, “Hey, guess what? I just bought a company.” That’s probably not in the mandate.

I can see the aggregator firms bifurcating. Some aggregators will be acquired by strategics. Other aggregators will likely develop deep relationships with cheap, passive capital—the third group.

Richard Matsui: This introduces an interesting dynamic. If aggregators continue to get acquired, or start to develop exclusive relationships, or become early stage developers, then it could suddenly become difficult for a long-term owner to source projects. Even if they do have a competitive cost of capital.

Ray Shem: Yes. All of this boils back down to the scarcity of projects. It’s the linchpin. In a world where aggregators fade away, an important question becomes, “Can the small early-stage developers and the large pension funds find a way to do deals, even without the middleman?” As corporate PPAs continue to grow, we are already seeing a need for higher capital requirements for developers to strike those deals, which favors larger players.

I don’t have a background in conventional energy, so I am going out on a limb here, but I see two structural features about solar that dis-favor the strategics. Historically, conventional energy assets required a high degree of sophistication in energy markets. While some larger solar assets are management intensive, solar assets in general are a lot more of a pure-play financial investment: You have a long-term contract, you have merchant curves, and other factors that end up informing the value. The advantage of being a strategic is somewhat blunted vis-à-vis solar.

The second factor is the highly local nature of solar development. Small utility-scale projects continue to proliferate, nationwide. Community solar uniquely enables a near-retail compensation for near-utility scale cost structure. Succeeding in that market is a hyper-local question—Who can get the zoning? Is the policy regime in place? Who can sign on this offtake? Who can get their foot in the door before the local program closes? Those scenarios don’t necessarily play to the benefit of large, national strategics. It will be interesting to see ultimately where that lands. 


Richard Matsui: You are very familiar with the aggregator business model, so it’s fascinating to hear you describe the secular headwinds there. Does the decline of aggregators and the rise of strategics and financial long-term owners represent the natural “end state” for our industry? I’m reminded of that Francis Fukuyama title—is this “The End of History”? 

Ray Shem: [Laughs]. Not necessarily. There’s still a fundamental gap here. If you have 4% equity capital, you need to deploy it in increments of hundreds of millions of dollars. There is an inherent mismatch between cheapest source of capital and what projects are available. From what I’ve seen, average project size in utility-scale is actually decreasing, even as these large long-term owners require bigger deals. Here’s the challenge: if I’m a local developer, I need to find someone with a few million dollars to finance my project. If I go out and raise that from friends and family, I’m not doing it at four percent. The aggregator has historically done that work. The question is, “Is this model the future of solar development?” If so, you could argue that there’s a permanent role for working capital to aggregate portfolios to a scale that can attract cheap capital.

Richard Matsui: I see. Is your hypothesis that that the aggregator role will still be needed, but it will be fulfilled by strategics that have vertically integrated down into the aggregator function? And that large, standalone aggregators will be increasingly rare, or even cease to exist in the future?

Ray Shem: Overall, I do see increasing pressure on the aggregator business model. At the end of the day, it comes down to competitiveness. Who will be more competitive: The strategic that has a reasonably cheap source of capital and has the operating businesses that can operate a distributed fleet of small utility-scale farms? Or the financial investors that may have the cheapest capital, but does require an aggregator intermediary? You could argue that the most efficient market will be the latter, where aggregators and financial investors are competing vigorously for every project. And vertical integration doesn’t benefit a strategic that much because the requirements to operate a solar farm isn’t high.

Richard Matsui: That makes sense. But sometimes, the market does not reach an efficient end-state. If I’m a strategic with an aggressive growth target in solar that I need to hit, I have to get my capital moving and start acquiring. Especially if I start seeing bigger aggregators getting snapped up, I’m going to start feeling very anxious that I might be the only one left without a date for the prom.

Ray Shem: Exactly. I think that will definitely happen. In fact, we’re seeing it now—for example, Orsted with Deepwater Wind. We are starting to see strategics insist, “I need to have a renewable energy platform.”

Richard Matsui: Yes. And if those strategics lock up dealflow by acquiring many of the bigger aggregators, it would seem to put the financial investors in a tight spot. Or perhaps new aggregators would simply emerge. We are in interesting times.

To wrap up, can you give me a non-consensus bet that you think is going to play out over the next couple of years?

Ray Shem: I live in Asheville, North Carolina, so I think every perspective I have is probably a non-consensus perspective.

If you’re a carpenter, every problem is a nail and every solution needs a hammer. So, my background is real estate. I think ultimately what you’re going to see in the marketplace is a lot of diversity—because of the diversity of the underlying assets. You’ve got everything from residential, small C&I, small utility scale, all the way up to massive 500 MW plants. I think you could make an argument that there will permanently be a diversity of players in the marketplace. I don’t necessarily think that this market will run to a singular end state, where all projects are fiercely competed for equally by all players. I do think there will be a lot of heterogeneity in terms of the marketplace and in terms of small, nimble developers taking advantage. I think you will continue to see some aggregators, though I do see added pressure on that business model. But if you build relationships and you can add value to those development relationships, there’s probably a niche for that. I think the strategics are just getting started here. The diversity of business models that we see today will reduce, but you’re still going to see a lot of diversity.

We haven’t hit the end of history yet.

The Orange Button ‘gridvolution’: A critical tool for taking the energy transition digital

Originally posted on Smart Electric Power Alliance (SEPA).

Two months ago at the Global Climate Action Summit in San Francisco, decarbonization captured most of the headlines—and for good reason. California Gov. Jerry Brown and former New York City Mayor Michael Bloomberg announced that state, local and business leadership is driving the United States toward its 2025 goals for the United Nations’ Paris climate accord, despite President Donald Trump’s withdrawal from the agreement. The campaign against climate change is gaining momentum.

Meanwhile, at an affiliated event called Gridvolution, several sessions focused on distributed energy resources, including the Orange Button Initiative, a collaborative effort to drive down project soft costs by establishing a standard format for reporting and collecting project data. The U.S. Department of Energy launched the initiative in 2016 with the goal of creating an industry-wide standard similar to the Green Button standard for streamlining consumers’ access to their energy use data.

Led by SunSpec Alliance, the creators of the Gridvolution forum and a principal Orange Button sponsor, the event had no grand proclamations; instead initiative stakeholders rolled out a powerful new set of software tools for solar financiers, project developers and asset managers. The message here: an electric grid evolution, a “gridvolution,” is gathering speed, as well.

Talking Orange Button at the Gridvolution, (from left) Jon Previtali, Wells Fargo; Michelle Savage, XBRL US; Charlie Isaacs, Salesforce; David Sykes, Chapman and Cutler LLP; and Tom Tansy, SunSpec Alliance. (Photo by Matthew Wiseman)

Key takeaways from the event: Moving beyond initial development of the standard, software developers are now major players in the multiplication and sophistication of its potential applications. And, from an initial group of four sponsors, Orange Button has expanded to include 350 companies and more than 1,000 individuals as active participants.

Still, over the past two years, much of the work on Orange Button has taken place behind the scenes. Initially, sponsors partnered with financiers such as Wells Fargo and asset managers such as sPower to demonstrate market demand for the standard, also reaching out to software companies large and small to help identify and shape cost-saving solutions. More recently, the project has entered a new phase, as noted, with software developers delivering the lines of code and functional tools to significantly cut costs on data collection and management for the people who build and invest in solar projects.

The Orange Button data standard itself is an open-source system for codifying solar project data and automating data exchange during project assessments, permitting, financing, interconnection, and other stages of the project lifecycle. Reflecting the complexity and granularity of the information involved, the initial release of the standard — Orange Button 1.0 — contains about 4,200 data fields.

Access Orange Button 1.0 at the SunSpec Alliance website.

Soon after releasing version 1.0, members of the Orange Button workgroup set their sights on adding project documents to the standard’s open-source, digital library, starting with manufacturer data sheets. Also known as spec sheets or cut sheets, a data sheet reports a product’s key specifications, including dimensions, electrical characteristics, and third-party certifications. Adding data sheets to Orange Button enabled inverter manufacturers to report compliance with California’s newly revised interconnection standard, Rule 21, highlighting one of many use cases.

Gridvolution panel on Orange Button code, (from left) Jan Rippingale, Blue Banyan Solutions; Jonathan Xia, kWh Analytics; and Jessie Deot and Tom Tansy, both of SunSpec Alliance. (Photo by Matthew Wiseman)

More recently, kWh Analytics introduced Orange Button Translate, software that takes proprietary project data and converts it to the Orange Button standard, moving the market one step closer to deploying data interoperability at scale.

“The reason Orange Button has developed faster than many of us had anticipated is the high rate of industry participation,” said Jan Rippingale, CEO at Blue Banyan Solutions, which provides business software for solar firms. “Given the strength of the developer community and the results we have already achieved, it’s only a matter of time before we see soft cost reductions attributable to the Orange Button standard.”

Raising the bar on industry IT

When the Department of Energy launched the the Orange Button Initiative with a grant in 2016, inefficient data gathering and management practices were slowing market growth. Some financiers reported spending hundreds of dollars an hour for lawyers to review project agreements and tens of thousands of dollars on due diligence before they could finalize projects. Data standards improve growth potential for everyone.

As an open-source software project, Orange Button has continually raised the bar on information technology (IT) capabilities throughout the industry. One benefit, asset managers no longer have to expend resources creating proprietary systems for tracking and reporting on solar performance evaluations. They can use the classification system in the Orange Button standard, which was developed by a team of industry experts, including a performance engineering manager at sPower, the largest private owner of operating solar assets in the US.

Machine-readable data sheets

In July, California updated the smart inverter requirements in its Rule 21 interconnection regulations, ordering grid-tied inverters to activate more of their built-in grid-stabilizing features. Without data standards, rule changes like this can create inefficient processes for many organizations. Inverter makers would have to produce new versions of their product data sheets, and utilities responsible for grid interconnection would have to collect the updated data sheets and enter the compliance information into their IT systems.

With the Orange Button data standard, inverter makers can streamline compliance reporting, which simplifies data collection for utilities. In fact, Orange Button makes it possible to reduce data collection costs by making data sheets and other project documents machine readable. Clean Power Research has demonstrated this capability by using Orange Button data to report an updated list of Rule 21-compliant solar equipment to California utilities.

Translating legacy data

One of the biggest anticipated barriers to adoption of the Orange Button standard is migrating legacy data to Orange Button data. kWh Analytics has taken the first step toward solving for this problem with the release of Orange Button Translate. This publicly available, proof-of-concept software allows users to fill in Excel spreadsheets with production data, solar array metadata, and solar system metadata, then upload the data to generate Orange Button-compatible files.

“We support Orange Button because it will reduce the cost for risk managers to monitor key metrics,” said Jason Kaminsky, chief operating officer at kWh Analytics.“ Orange Button Translate is the first piece of software designed exclusively to support the new data standards.”

What’s next?

Looking ahead, software developers are continually working to improve the Orange Button data standard through public and online meetings of the Orange Button workgroup, and occasional in-person programming sessions. SunSpec Alliance hosted the latest active coding session, or hackathon, Nov. 7-8 at its offices in San Jose. The event served as a kickoff for the Orange Button core library, a set of programming files that will be included in all implementations of Orange Button software.

“Energy is the last fundamental industry to go digital because it hasn’t had communications standards like Orange Button to streamline data exchange,” said Tom Tansy, chairman of SunSpec Alliance. “Cost reductions for solar hardware have defined the past ten years in the solar industry. The next ten years will be remembered for our ability to drive down soft costs using data standards.”

kWh Analytics Wins $1.25MM U.S. Department of Energy Award to Quantify Degradation Rates and Increase the Affordability of Solar

Originally posted on BusinessWire and Solar Power World.

SAN FRANCISCO – kWh Analytics, the market leader in solar risk management, has won a $1.25 million award from the U.S. Department of Energy Solar Energy Technologies Office (SETO) to utilize its real-world data to quantify degradation rates and increase the affordability and reliability of photovoltaics.

Today’s state-of-the-art study of degradation is constrained by the lack of real-world performance data. With this award, kWh Analytics will build a machine learning model on its industry-wide data repository to statistically quantify degradation rates on an ongoing basis. The project is titled, “Deciphering Degradation: Machine Learning on Real-World Performance Data,” and will be led by kWh Analytics Data Scientists Ben Browne, Victor Garcia, and Adam Shinn (Principal Investigator).

Understanding degradation rates is important for the PV industry, along the entire value chain. According to the 2018 SETO PV Innovation Roadmap, a DOE-conducted survey of 89 companies and researchers, better understanding of the degradation rate was cited as the single biggest need under “Reliability and Durability,” which itself was the most popular issue amongst all categories. According to NREL’s 2016 Compendium of Photovoltaic Degradation Rates, the uncertainty in degradation has a total potential impact of $17/MWh, “even exceeding the impact of the initial cost” of the solar power plant itself.

Degradation rates have far-reaching implications, stretching from BOM decisions made at the module factories to financial assumptions made at the banks. Experts from manufacturing and finance attest to the importance of kWh Analytics’ work to quantify degradation rates:

“kWh Analytics’ approach of using its historical data to deeply understand and quantify degradation can have a significant positive impact on the industry,” said Howard Wenger, clean power investor and former President and CEO of SunPower Systems (NASDAQ: SPWR). “The lack of long-term solar panel performance data has been a real challenge because buyers of inferior panels have been unable to readily know the difference in quality between the various products on the market. With data on one-in-five American solar assets and growing, kWh Analytics is uniquely positioned to address this industry-wide challenge and enable the solar industry to accurately price quality and inform buyers on how to value their solar power assets before and after purchase.”

“kWh Analytics is recognized as an industry expert on PV plant performance, and they have been instrumental in the effort to make solar affordable and brought to scale,” said Jon Previtali, Director of Technology and Technical Services for Wells Fargo’s Environmental Finance team. “kWh Analytics’ quantification of degradation rates using 10+ years of historical performance data will help investors better inform our energy production estimates, project proformas and investment theses.”

Further, kWh Analytics also intends to equip insurers with insights that enable them to identify reliable modules and charge less when insuring them. The introduction of that price signal—explicitly linking module reliability to levelized cost of energy (LCOE) through intelligent insurance premium pricing—is an innovative approach that solves a fundamental incentive misalignment for the industry.

With SETO’s support, kWh Analytics’ work to quantify degradation rates will create systemic, scalable impact by:

  • Delivering real-world perspective on the causes of degradation, enabling the industry to improve reliability.
  • Creating a price signal that puts a tangible dollar value on high reliability, via insurance premium pricing.
  • Contributing to the open source community by sharing the proposal’s resulting machine learning model.


Media Contact:

Sarah Matsui


About kWh Analytics          

kWh Analytics is the market leader in solar risk management. By leveraging the most comprehensive performance database of solar projects in the United States (20% of the U.S. market) and the strength of the global insurance markets, kWh Analytics’ customers are able to minimize risk and increase equity returns of their projects or portfolios. kWh Analytics also provides HelioStats risk management software to leading project finance investors in the solar market. kWh Analytics is backed by Anthemis, ENGIE New Ventures, and the US Department of Energy. For more information about kWh Analytics, please visit: www.kwhanalytics.com or follow us on Twitter @kwhanalytics.

About the Solar Revenue Put

The Solar Revenue Put is backed by investment-grade insurance capacity that guarantees up to 95% of a solar project’s expected energy output. kWh Analytics’ wholly-owned broker has placed the policy with Swiss Re, a global insurer rated AA- by Standard and Poor’s. As an ‘all-risk’ policy, the Solar Revenue Put protects against shortfalls in irradiance, panel failure, inverter failure, snow, and other system design flaws. The Solar Revenue Put provides comprehensive coverage that banks rely upon, enabling financial institutions to more easily finance solar projects on terms more favorable to the sponsor.

About the Solar Energy Technologies Office
The U.S. Department of Energy Solar Energy Technologies Office supports early-stage research and development to improve the affordability, reliability, and performance of solar technologies on the grid. Learn more at energy.gov/solar-office.

Tax equity investor list: 28 partners for your solar projects

Originally posted on pv Magazine USA.

Yesterday, Solar Energy Industries Association (SEIA) released its 9.0 update to the Federal Tax Guide for Solar Energy. This matters because mastering it means you can find partners to fund up to 46% of a project’s cost. And now that you know how important tax expertise is, (and you’ve got your site control, ISA and PPA) the next step is to find that partner…

kWh Analytics has launched its Solar Lendscape for Tax Equity – a list of finance groups who will partner with your solar project as a tax equity investor. Filters allow for segmentation via key point such as market segment, check size, deal structure, and a few other items.

The tool complements kWh Analytics’ June release of the Solar Lendscape for Lenders. Users can toggle between the two lists via a button at the top of the segmentation filters.

It is sort of a one stop shop for sourcing project money: construction capital from the tax equity partner, and finishing money from a lender.

The table also notes whether companies have tacitly approved accounting for kWh Analytics’ Solar Put – a tool to guarantee output of up to 95% of a solar power projects projected production.

All kWh Analytics has to do is find early stage development investors, and backend it with institutional lenders who will own the projects over the long game, then we’ll have the whole finance ecosystem within a few clicks.

A few data points that kWh released, first on the tax equity partners:

  • Most organizations are using partnerships as a preferred structure
  • Nearly a dozen investors are investing in community solar
  • There was an influx of new tax equity providers in 2017, following the extension of the investment tax credit in 2016

And second on the lenders:

  • Over 40% of the most active lenders now value kWh Analytics’ Solar Revenue Put as a credit enhancement
  • There are now 14 lenders that have either originated or hold more than $1b of solar term debt
  • ~20% of the lenders are now willing to lend to community solar projects
  • ~20% of the lenders are now willing to take risk on the merchant tail
Solar Lendscape

kWh Analytics Releases Industry’s Official “Solar Lendscape,” Now Profiling 28 Active Tax Equity Investors

Additional coverage in Solar Power World, BusinessWire, Yahoo Finance, and SolarWakeup.

SAN FRANCISCO – kWh Analytics, the market leader in solar risk management, today announced the release of Solar Lendscape for Tax Equity, a free resource that profiles 28 tax equity investors. For developers looking to raise capital, the Solar Lendscape catalogs the industry’s most active debt and tax equity investors, including details on check size, target market segments, and product type.

The industry’s first Solar Lendscape was released in June 2018 and initially focused exclusively on providers of debt. Following industry interest, kWh Analytics developed Solar Lendscape for Tax Equity to also include an overview of tax equity investors.

Project development is known to be a complex engagement in which the rules and variables regularly change. One of the most important variables for a developer to track is the availability of capital. Leveraging their experience working with investors, kWh Analytics built a simple, free tool to help developers assess the investor landscape and find the right partner for their projects.

“Solar Lendscape should prove a useful tool for developers trying to raise capital for their projects,” says Keith Martin, Partner at Norton Rose Fulbright. “It was inevitable that someone would create an internet portal to help with that process.”

Fast facts from the Solar Lendscape for Tax Equity:

  • Most organizations are using partnerships as a preferred structure.
  • Nearly a dozen investors are investing in community solar.
  • There was an influx of new tax equity providers in 2017, following the extension of the investment tax credit in 2016.

Fast facts from the Solar Lendscape:

  • Over 40% of the most active lenders now value kWh Analytics’ Solar Revenue Put as a credit enhancement.
  • There are now 14 lenders that have either originated or hold more than $1b of solar term debt.
  • ~20% of the lenders are now willing to lend to community solar projects.
  • ~20% of the lenders are now willing to take risk on the merchant tail.


Learn more about the Solar Lendscape & the Solar Lendscape for Tax Equity: www.kwhanalytics.com/solar-lendscape

Media Contact:

Sarah Matsui


About kWh Analytics          

kWh Analytics is the market leader in solar risk management. By leveraging the most comprehensive performance database of solar projects in the United States (20% of the U.S. market) and the strength of the global insurance markets, kWh Analytics’ customers are able to minimize risk and increase equity returns of their projects or portfolios. kWh Analytics also provides HelioStats risk management software to leading project finance investors in the solar market. kWh Analytics is backed by private venture capital and the US Department of Energy.

About the Solar Revenue Put

The Solar Revenue Put is a credit enhancement that guarantees up to 95% of a solar project’s expected energy output. kWh Analytics’ wholly-owned brokerage subsidiary places the policy with risk capacity rated investment-grade by Standard and Poor’s. As an ‘all-risk’ policy, the Solar Revenue Put protects against shortfalls in irradiance, panel failure, inverter failure, snow, and other system design flaws. The Solar Revenue Put provides comprehensive coverage that banks rely upon, enabling financial institutions to more easily finance solar projects on terms more favorable to the sponsor.

#Solar100’s Lidija Sekaric: Solar’s Jack of All Trades

Originally posted on pv Magazine USA.

The saying goes, “A jack of all trades is a master of none,” positing a distinction between a generalist and a specialist.

Bucking convention that someone could only be a generalist or a specialist, Dr. Lidija Sekaric is solar’s jack of all trades.

Previously as Director at the Department of Energy’s Solar Energy Technologies Office, Sekaric effectively served as a cleantech investor. Before that, she worked as a research scientist, earned her PhD in applied physics, holds thirty U.S. patents, and has over forty scientific publications. Now shifting from government to business, she works in strategy and marketing.

In this interview, Sekaric talks about the future of distributed energy and what she’s learned about successful teams after hearing $1B of solar funding pitches.


Richard Matsui: From a PhD in applied physics to research at IBM to policy work at the Department of Energy, you have a unique career in renewable energy. How did you get started?

Lidija Sekaric: I started my career working as a Research Scientist in Nanostuctures and Exploratory Devices group at IBM. Although it was fascinating work, and I was working alongside very smart people, I decided to shift my focus to renewable energy. I felt that I needed to do something about climate change, using whatever brain power I have.

So in 2009, I joined the US Department of Energy (DOE) as an American Association for the Advancement of Science (AAAS) Science Policy Fellow, a two year program that encourages participants to engage in policy work where they can contribute with their critical thinking and analytical skills. Before us were the big problems in policy and technology, especially with the new administration in place, and we asked questions such as, “Is there a new material we may need for solar to become the default energy source?” or “Is there a new device we need to invest in?”, towards, ultimately: “How can solar be made more affordable all around?” Afterwards, I was recruited for the newly-founded SunShot Initiative at the US DOE Solar Energies Technologies Office (SETO).

After seven years with DOE and five with SETO, the renewables landscape had changed quite a bit. There was so much more activity in the private sector in renewables and distributed energy that was not there when I first got into the field. An opportunity with Siemens came up and a company that has an incredibly wide array of technologies and business engagements was very attractive. It, too, followed the expansion of my personal universe when it came to technology and business activities.

Richard Matsui: How does having a physics and research background influence or inform the way you think about these very different roles?

Lidija Sekaric: In my current role in Strategy and Marketing, I do not spend much of my time thinking about the next greatest material or device. We build projects that are bankable, and so we don’t integrate solutions right out of a lab on customer sites—there is no need for that, with an array of proven solutions. But I have found that my research background is helpful when communicating with colleagues across executive, R&D, and sales departments. Whether it’s thinking about fluid dynamics or grid operations, or talking about product offerings in the context of market needs, it is useful to be able to quickly grasp and communicate technical concepts, without needing to learn them from scratch.


Richard Matsui: What do your customers value, when you pitch them on distributed energy solutions?

Lidija Sekaric: Cost savings, reliability, and sustainability—and the order of importance changes for a different customer class. If we look at the U.S. military as an example, the mandate has previously been sustainability and minimizing cost to the government. Reliability was always absolutely needed,  but now I think that reliability is certainly first and foremost. Similarly, hospitals and aid shelters think about reliability first.

And then, there are customers who want to save money in the short-term, or have a customer-driven path to reducing the carbon footprint.

However, even if the customer’s stated motivation is sustainability or reliability, all of them want to see savings from the project. Because these projects can and do save money. Because now we don’t have to assume that you always have to spend more to have cleaner, on-site power.

Richard Matsui: Fascinating. I’m reminded of an interview we did with Jigar last year, and this was the point he was making, too. He was saying that sophisticated C&I developers have moved beyond simply pitching customer savings, because the customer values a lot of things beyond dollars. He provided an example of solar projects for schools, and how if batteries were attached to those solar projects, then all those schools could also serve as shelters in case of emergency. In this case, yes, there are savings, but the resiliency benefit is also critical.

From your experience, do you find this is true, or is the priority still cost savings first?

Lidija Sekaric: First, assume that everybody wants to save money, and assume that you have to build a project where you will save them money. But in terms of other priorities, I think it really depends on the customer. You have to understand their priorities, and it’s best when you can address multiple motivators.

Richard Matsui: In the past 24 months, there has been a flurry of acquisitions in this C&I distributed energy space, including ENGIE buying Opterra and SoCore. If you fast-forward 10 years, what does this market look like? Does it end up being fairly fragmented or are there just a couple of large national players?

Lidija Sekaric: That’s a really good question. Is the market going to consolidate, with only one entity that is servicing everything from top to bottom, including a building’s service, power generation, trading into the wholesale market, and advice on energy purchasing? It would be like replacing your utility with another entity that is functionally equivalent to your utility, and then some. Of course, in some markets, the major difference is choice and competition. The switching costs to this model could be high in some cases, or low, with a number of innovations in financing these services, but if done right, the rewards should always be worth it.

The critical question here is: How are customers going to react? I think it will ultimately depend on how the customer feels about signing up with one entity for a long time. It’s still an evolving landscape.

Richard Matsui: Everyone’s favorite analogy in storage is, “Storage is where solar was ten years ago.” You’re uniquely positioned to be able to comment on both, having worked in solar then and storage now. From a technical standpoint, would you agree with that analogy?

Lidija Sekaric: It is not dissimilar. Because they are both materials-intensive industries, the learning curve should look about the same. In a sense, there is no actual scaling required in the way we think of physical scaling with a computer chip. Scaling with storage is just tied to volume, as manufacture of the materials scales.

Further, you can also consider the obstacles for solar that will be similar for storage. If you look at a breakdown of the costs, we have almost a mirror image of soft costs versus hard costs. They are basically the same, and I can’t say I am surprised.

To illustrate that, let’s look at large scale versus small scale storage. Small scale storage is still going to be very tough for all the reasons that small solar was difficult. From the different local rules for electricians, to system integration, to business overhead, to packaging, it is fundamentally harder on a small scale, when the market is still so small and every solution looks different. Small storage now is harder because it is not standardized at small scale. And non-standard solutions can be expensive, unless that is mitigated in the overall project.

In many ways, solar ten years ago and storage today are the same.


Richard Matsui: As Director of the US DOE SETO’s SunShot Initiative, you previously managed a portfolio of about $1B in project funding in solar R&D.

Having heard $1B worth of pitches, have you noticed trends or shared traits across successful teams?

Lidija Sekaric: Yes—it always came down to how well teams understood the market. From startups to university professors to national lab researchers, when teams possessed the instinct for keeping an eye on the market, they often came up with very relevant proposals. A team can understand the technology and have very smart people, but unless that team truly understands the market, their solution goes nowhere.

In addition, the ability to pivot was also important, because there’s always ways to improve the project.

Richard Matsui: Can you highlight a few projects that you feel really moved the needle for the industry?

Lidija Sekaric: There are several that come to mind and that I noticed in recent headlines. Aurora Solar was funded early on through a SETO program, and they are still out there and offering automated design.

And your team at kWh Analytics won an early SETO award. It was incredibly ambitious, what your team proposed to do all the way back in 2013, building the industry’s data repository. And now you created the Solar Revenue Put with all of that data. It is very significant.

Richard Matsui: Thanks, I really appreciate it.

Lidija Sekaric: We can’t take a hundred percent credit for everything you’ve done, but by association, we’ll say, “That’s in the family.”

Richard Matsui: Without the early support from your team we would not be where we are today. A lot of credit should go to SETO.


Richard Matsui: You’ve previously said that gender equity in solar is “more than a diversity imperative; it is a business as well as a moral imperative.” Can you elaborate?

Lidija Sekaric: From the standpoint of having managed and worked with people from a range of diverse backgrounds—cultural, educational, gender, orientation, and so forth—I have seen the business benefits to having a diverse team. I firmly believe that we bring our entire selves to work, and that where we come from shapes our unique perspectives on life. Having a diverse team means being able to turn a problem over and examine it from many different sides. Diversity is one of the most important things in tackling problems creatively. And creativity is incredibly important in solving problems. For example, when it comes to gender equity in particular, there are studies that show that companies that have women in leadership perform better than comparable companies without women in leadership. When finding the most efficient business practices, diversity needs to be prioritized.

The moral imperative comes into play for companies that have a social mission. Diversity and equality are smart and important ways of bettering society.

Richard Matsui: The Solar Foundation has helped provide important data about the people working in our industry. Their latest survey underscored that yes, progress has been made, but that women and people of color are still underrepresented in this industry. Have you seen examples of initiatives or individuals who are moving the needle on this issue?

Lidija Sekaric: For diversity and inclusion, awareness is a requisite for change. To start, the Solar Foundation provides a valuable service by allowing us all to speak from the same set of facts. For anyone who cares, learning the current realities is an important step towards then being able to ask, “What do we do about this?”

When it comes to initiatives that I see promoting economic equity, I would like to highlight an organization that was started by a former colleague of mine, Dan Conant. Dan founded Solar Holler, which is an enterprise with a solar and economic development initiative at the core.

Dan went back to West Virginia and said, “Look, coal is not going to be around for these people. What are we going to do for the people in the poorest places that we have in the country?” And so he started this program doing installations and providing trainings to develop the skills of West Virginians to develop solar.

This example is not specific to gender equity, but it is about economic equity and giving people opportunities to thrive. It takes exposure to know that an industry is thriving, and for people to think about moving in that direction.

On the gender equity issue, any conference organizer, or a committee organizer, who is thinking about the makeup of that group beyond their degrees and titles, is doing something significant—it is providing human visibility, and visibility begets diverse participation in return.

Highlights from the #Solar100 at SPI 2018

Originally posted on pv Magazine USA.

Through a featured list and monthly interviews, the #Solar100 celebrates our industry’s thought leaders and the ideas that drive them.

This year at Solar Power International, all attendees were invited to nominate who they wanted to see interviewed next for #Solar100. The #Solar100 Leaders nominated both “Next Interviews” as well as “Next Entrants.” Below are select highlights.

Stay tuned for additions to the #Solar100 and new interviews on pv Magazine USA.

Next Interview Nomination Highlights

  • “Emily Kirsch the Mother Theresa of Solar” by Kyle Cherrick
  • “Jamie Nolan the Olivia Pope of Solar” and “Meghan Nutting the Kamala Harris of Solar” by Jen Bristol
  • “Christian Roselund the Yosemite Sam of Solar Media” by John Weaver
  • “Billy Parish the Captain Cook of Solar Finance” by Deborah Knuckey
  • “Tom Weirich the Human in Action of Solar Finance” by Yoni Cohen
  • “Andrea Luecke the Einstein of Solar Jobs” by Meghan Nutting
  • “Stephen Lacey the Edward R. Murrow of Solar News” by Tor Valenza
  • “Yann Brandt the E-Newsletter of Solar” by Kendra Hubbard
  • “Tor the Solar Fred of Solar” by Eli Hinckley
  • “Tim Buchner the Bill Gates of Solar” by Tom Weirich
  • “Susanna Murley the Peggy Olson of Solar Creatives” by Jamie Nolan
  • “Lynn Jurich the Lynn Jurich of Solar”
  • “Adam Browning the Gandhi of Energy Equality”
  • “Tom Matzzie the Clean Choice of Solar”
  • “Elias Hinckley the Renaissance Man of Renewables”
  • “Julia Hamm the Warren Buffett of Solar”
  • “Lidija Sekaric the Visionary of Solar Deployment”

New Entrant Nomination Highlights

  • “Audrey Lee the Julia Morgan of Solar + Storage” by Anne Hoskins
  • “Rosalind Jackson the Heart + Soul of the Solar Movement,” “Jessica Scott the Champion of Nevada Solar,” and “Zadie Oleksiw the Solar Splainer of the Solar Movement” by Adam Browning
  • “Raffi Garabedian the Staying Power of Thin Film Solar” by Lidija Sekaric
  • “Mike Pound the Winston Churchhill of Solar” and “Mauricio Anno the Peter Sellers of Solar” by TJ Kanczuzewski
  • “Jared Johnson the Larry Bird of Financial Innovation” by Jason Kaminsky
  • “John Weaver The Tick of Solar” and “Gregor Macdonald the da Vinci of Clean Energy Writing” by Christian Roselund
  • “Stephen Trimble the Alaska Builder of Solar Growth” by Kelly Pickerel


kWh Analytics Releases Orange Button Translate to Streamline Data Sharing

Originally posted on Solar Power World and BusinessWire.

kWh Analytics, the market leader in solar risk management, today announced the release of Orange Button Translate, the first piece of software designed exclusively to support the U.S. Department of Energy Solar Energy Technologies Office’s (SETO) Orange Button data standards.

Orange Button Translate streamlines data sharing in the market by facilitating the transmission of solar data between developers, investors, and other key stakeholders. This tool is the culmination of a two year award from the DOE, and it supports Orange Button’s goals of reducing transaction costs and increasing bankability.

“kWh Analytics has built and maintains the most comprehensive performance database of solar assets in the United States,” said Jason Kaminsky, COO of kWh Analytics. “We are proud to leverage our experience working with solar big data in support of the adoption of Orange Button along with the Department of Energy, NREL, SEPA, and SunSpec Alliance.”

“Orange Button Translate will improve data sharing throughout the solar value chain and will help reduce solar soft costs as the Department of Energy and the solar industry have envisioned,” said Aaron Smallwood, Senior Director for Technical Services at the Smart Electric Power Alliance (SEPA). “This is the culmination of years of work by the project teams and the solar industry, and will quicken the transition to a more clean and modern grid.”

Orange Button is supported by the solar finance community, including large banks like Wells Fargo.

“Standardized data will reduce time, cost, and industry inefficiencies,” said Jon Previtali, Director of Technology and Technical Services for Wells Fargo’s Renewable Energy & Environmental Finance team. “With Orange Button Translate, kWh Analytics has moved the industry forward with their advanced data capabilities. Wells Fargo is a proud supporter of the Orange Button initiative.”

Orange Button Translate is free and available to the public. More information can be found here: kwhanalytics.com & translate.kwhanalytics.com.

kWh Analytics receives 2018 Finance Innovation Award at the Global Climate Action Summit

Originally posted in Solar Power World.

kWh Analytics was awarded the 2018 Finance Innovation Award at the Global Climate Action Summit (GCAS) for its invention of the Solar Revenue Put, a credit enhancement that de-risks the performance of solar power plants, enables investors to deploy more capital into solar assets and reduces the cost of solar.

Dan Carol, the Senior Advisor of Infrastructure and Energy for the Office of Governor Jerry Brown, presented kWh Analytics team member Sarah Matsui with the Global Climate Action Summit’s 2018 Finance Innovation Award.


The GCAS is an annual gathering co-chaired by Jerry Brown, Governor of California, and Patricia Espinosa, Executive Secretary of the U.N. Framework Convention. The Summit celebrates “the extraordinary achievements of states, regions, cities, companies, investors and citizens with respect to climate action.”

GCAS’s Friday Finance Roundup focused on bringing climate finance to scale and featured speakers David Ige, Governor of Hawaii; Danny Kennedy, CEO of CalCEF; and Richard Kauffmann, Chairman of Energy, Office of the Governor of New York.

Concluding GCAS’s Friday Finance Roundup, kWh Analytics was recognized with the Finance Innovation Award for improving solar project economics and accelerating the growth of the solar industry.

“The technological solutions needed to address climate change already exist, today. Now we need the capital to deploy those technologies at scale,” said D. Van Skilling, former CEO of Experian. “kWh Analytics is unlocking that capital by providing investors with the data they need to invest confidently in renewable energy technologies, similar to the role that Experian serves in consumer credit investments.”

“The world desperately needs novel solutions to real problems,” added Chuck Wallace, co-founder of Esurance. “We need more solutions like the Solar Revenue Put. The importance of the Solar Revenue Put to our local, national and global communities in accelerating the adoption of clean energy and reducing climate change is obvious.”

“The monumental problem of climate change is being answered by many of the world’s most talented and tenacious teams,” said Richard Matsui, Founder and CEO of kWh Analytics. “We are honored to be recognized for delivering an impactful solution at this critical time. We will continue to realize our mission of “More solar through better data” by bringing together the best of data science, software development, and financial engineering.”

kWh Analytics completes 50 MW Solar Revenue Put, backed by Swiss Re

Originally posted in Reinsurance News.

kWh Analytics, a leading solar risk management provider, has structured a Solar Revenue Put with global solar developer GCL New Energy and U.S solar project investor PNC Bank for 50 MW of solar farms, with risk capacity provided by Swiss Re Corporate Solutions.

The 4 solar farm projects, which belong to GCL New Energy, are located in Oregon and were financed with the Solar Revenue Put protecting cashflows.

kWh Analytics used its proprietary actuarial model and risk management software (HelioStats) to develop the Solar Revenue Put, which is a credit enhancement that guarantees up to 95% of a solar project’s expected energy output, enabling financial institutions to more easily finance solar projects on terms more favourable to the sponsor.

The firm explained that the policy currently protects against shortfalls in irradiance, panel failure, inverter failure, snow, and other system design flaws.

“We have a global mandate to rapidly expand our investment portfolio of solar projects,” said Frank Zhu, Executive President of GCL New Energy. “To support us in this growth, we were pleased to have found efficient and reliable execution with our partners, PNC Bank and kWh Analytics.”

Brian Beebe, Head of North America Origination, Swiss Re Corporate Solutions, added: “We are bullish about solar, and Swiss Re is committed to providing innovative risk transfer solutions. kWh Analytics built the industry’s largest data repository, encompassing one-in-five American solar power plants, and owns the foundation upon which entirely new categories of risk management products will be built.”

Dick Rai, Manager of PNC Bank’s bank’s renewable energy financing arm, also commented: “Strong relationships are the cornerstone upon which we have built this business. We have long-standing relationships with both GCL New Energy and kWh Analytics, dating back to their respective entries into the U.S. solar market.”

kWh Analytics claimed that 40% of active lenders now value the Solar Revenue Put as a credit enhancement, with the Put now financing structures for solar portfolios ranging from thousands of residential rooftops to more than ten utility-scale plants.

Portfolios supported by the Solar Revenue Put are also securing, on average, debt sizing increases of around 10%, kWh Analytics added.