Buyer’s Guide to New York Community Solar
By Ishaan Goel
WHY COMMUNITY SOLAR?
A home solar system is a great investment, with financial returns far in excess of any financial investment that has comparable risk. It’s also a tangible step a homeowner can take to help the environment.
Unfortunately, most New Yorkers (and Americans in general) can’t install home solar. They may be renters, or have roofs that are too old or shaded. Or they may not be able to afford the up-front cost, or not have enough income to take advantage of the tax credits.
That is why New York’s electricity regulator, the Public Service Commission, created community solar:...
Green Asset-Backed Bond From Hannon Armstrong Has Measured GHG Savings
by the Climate Bonds Team Hannon Armstrong’s (HASI) second green ABS, $118.6m, will save 0.39 tons of GHG annually per $1,000! ($100.5m, 4.28%, 19 yr, A and $18.1m, 5.00%, 19 yr, BBB) Hannon Armstrong (NYSE:HASI) closed its second green ABS bond (Sustainable Yield Bond) following its inaugural issuance in December 2013. The ABS was a private placement split into two tranches with different credit ratings (from Kroll Bond Credit Rating Agency): $100.5m with a rating of A and 4.28% interest rate, and $18.1m with a rating of BBB and 5.00% interest rate. Both tranches have a 19-year tenor....
Why This German Solar Executive Is Skeptical About American YieldCo Assumptions
by Tom Konrad CFA Ever since the first YieldCo, NRG Yield (NYSE:NYLD), went public in 2013, it and other similar YieldCos have been reshaping the market for operating renewable energy assets, especially wind and solar PV farms. A YieldCo is, to put it simply, a publicly traded subsidiary of a developer and operator of clean energy farms that uses the cash flow from its assets to return a high current dividend to shareholders. Most large, publicly traded clean energy developers have already launched or are preparing to launch a YieldCo. The current crop includes NRG Yield, Pattern...
Hannon Armstrong’s Strong Q2 Keeps It In My Top Picks
By Jeff Siegel Hannon Armstrong (NYSE:HASI), one of my top picks for 2014, just made me very happy. Yesterday, the company announced its Q2 Core Earnings of $4.7 million or $0.22 per share. On a GAAP basis, the Company recorded net income of $2.9 million. Here are some other highlights. . . Raised approximately $70 million in April, 2014 in a follow-on offering. Increased the flexibility and expanded the capacity of its existing credit facility by $200 million. Completed more than $200 million worth of transactions, including the acquisition of a $107 million portfolio of land...
US Yieldcos Will Survive
by Susan Kraemer As unrealistic expectations of dividend growth are scaled back, yieldcos are now on a more sustainable path. Weaknesses in the US yieldco model came into sharp relief this summer as share prices fell along with oil and gas stocks. This was in part due to investor confusion about energy stocks but also in response to a flaw in US yieldco expectations. Manager of the Green Global Equity Income Portfolio and AltEnergyStocks.com editor Tom Konrad Ph.D., CFA had warned of the looming potential for exactly this kind of market correction in a conversation a...
The Pros Pick Three Green Income Stocks For 2014
It’s now possible to invest in green stocks for income, not just for growth. Here are three picks for 2014 from green investing professionals.
Will Investors Flock to SunEdison’s Emerging-Market YieldCo?
by Tom Konrad CFA SunEdison is proposing something entirely new: a YieldCo with a focus on projects in Africa and Asia, but it's a long way between an S-1 filing with the SEC and and IPO. The June launch of SunEdison's (SUNE) first YieldCo, TerraForm Power (NASD:TERP), transformed the parent company's prospects. Now it wants to repeat the performance with a first-of-its kind YieldCo that will focus on investment in Africa and Asia. A YieldCo is a publicly traded company that is formed to own operating clean energy assets that produce a steady cash flow,...
The Clear Way to Buy Clearway
By Tom Konrad, Ph.D., CFA
A reader of my recent article on Yieldcos asked which share class of Clearway Energy was the better to buy for tax purposes: Class A shares (CWEN-A) or Class C Shares (CWEN).
For tax purposes, they are identical. They pay the same dividend, and it is treated the same no matter which share class you buy. The reason many large investors often trade CWEN rather than CWEN-A is because it is more liquid. As I write on Jan 23rd, Yahoo! Finance puts the 3 month average share volume for CWEN at 1,372,714, while the corresponding number...
CAFD: Don’t Let The Joke Be On You
Tom Konrad CFA Sunpower and First Solar are indulging in nerd jokes. Their YieldCo, called 8point3 Energy Partners had its initial public offering on June 19th. The name is an astronomy nerd joke and a reference to the time it takes the sun's rays to reach the Earth, 8.3 minutes. Last week, we found out that its ticker symbol is CAFD, a "financial nerd joke" because it stands for "cash available for distribution." CAFD is an important YieldCo metric, but it's not a perfect one. If you're not a financial nerd but are interested in...
Trash Stocks Trashed: An Income Opportunity?
Tom Konrad CFA Dumpster diving for high yielding gems. An earlier version of this article was written at the end of July and published on my Forbes blog, before the August market implosion. I've updated it here to reflect the new stock prices and some recent company news. Renewable energy has many advantages over fossil energy. One of the most important is that it's renewable. As supplies of Oil and other fossil fuels are used up, they become harder and more expensive to extract, while renewable energy is generally getting cheaper over time,...
The Greenium: Growing Evidence of a Green Bond Premium
Highlights from the latest Q4 2017 Green Bond Report from the Climate Bonds Initiative: Two years of data observations examining green bond behavior in primary markets
Climate Bonds Initiative has released the fourth “Green Bond Pricing in the Primary Market” report analysing the performance of green bonds issued in the period October-December 2017. This is the last quarterly report; future publications will be produced semi-annually allowing a more longtitudinal analysis as the market expands.
The Q4 2017 report covers USD15.1bn or almost 40% of the face value of labelled green bonds issued in Q4. 15 EUR and 8 USD labelled green bonds are...
Five Pioneers Mining the Sun for Income
by Jared Wiedmeyer For the past few years, solar industry stakeholders have imagined a future where the general public has the ability to invest in pure-play renewable energy real estate investment trusts (REITs) that finance and construct both utility-scale and distributed photovoltaic (PV) projects in the United States. While these stakeholders wait for this reality to come to fruition, existing REITs already have several options to own or develop solar projects that still allow them to comply with the IRS's asset and income tests. This past May, Chadbourne & Park's Kelly Kogan and Scott Bank moderated a roundtable with...
Greening of Utility Dividends
Investors looking for income have long relied on the stocks of electric utilities. Naturally cash generative utility companies have a history of generous dividend payout policies. However, for those investors who have a concern about sustainability or climate change, even utilities with the highest dividend yields may not be appealing.
We looked at a selection of nine utility companies with mixed achievements in terms of the percentage of renewable energy sources found in their retail sales of electricity. The intensity of renewable energy in utility portfolios varies considerably across the industry. Many utilities are grappling with legacy coal and oil infrastructure. Others are not favored...
Three Clean Energy Stocks That Won’t Keep You Up At Night
Tom Konrad CFA If you want to green your portfolio, but the wild swings of First Solar (NASD:FSLR), Tesla (NASD:TSLA), SolarCity (NASD:SCTY), and even clean energy ETFs like Powershares Wilderhill Clean Energy (NYSE:PBW) are a bit too much to let you sleep at night, you’re not alone. A reader recently suggested I write about more green stocks like Waste Management (NYSE:WM), which readers can own and not worry about too much. I thought it was an excellent suggestion; I’ve recently been writing much more about much more exciting or terrifying stocks, because there is simply a lot more...
Green swan, Black swan: No matter as long as it reduces stranded spending
by Prashant Vaze, The Climate bonds Initiative
In January, authors from several institutions under the aegis of BiS, published The Green Swan Central banking and financial stability in the age of climate change setting out their take on the epistemological foundations for, and obstacles against, central banks acting to mitigate climate change risk.
The book’s early chapters provide a cogent and up-to-date analysis of climate change’s profound and irreversible impacts on ecosystems and society. The authors are critical of overly simplistic solutions such as relying on just carbon taxes. They also recognize the all-too-evident deficits in global policy to respond to the threat.
In short, they accept the need for central banks to act.
The Two Arguments
The paper makes two powerful arguments setting out the challenges central banks face using their usual mode of working.
Firstly, climate change’s impact on financial systems is an unknowable unknown – a...
Enviva: Wood Pellets Into Dividends
by Debra Fiakas CFA Last week Enviva Partners, LP (EVA: NYSE) reported financial performance for its wood pellets business in its quarter ending September 2015. Sales totaled a whopping $116.6 million, representing a 53% increase compared to $40.5 million in the same quarter last year. The big jump in revenue resulted from higher volumes to larger customers. Distributable cash flow totaled $12.6 million compared to $8.2 million in the year ago period. Quarter performance made possible a declared cash distribution of $0.44 per common unit, which is 7% higher than the minimum quarterly distribution. At its...
