Comparing Community Solar Subscriptions And Yieldcos
By Tom Konrad, Ph.D. CFA Community solar is gaining traction in many states. The concept, also known as shared solar or solar gardens, originated in the mid-2000s as a way to allow broader participation in the ownership of solar photovoltaic (PV) systems, while also encouraging local development. Community solar broadens access to solar beyond homeowners with suitable roofs. A National Renewable Energy Laboratory report from 2015 estimated that 49 percent of households cannot own solar because they do not own their own home, or they live in high-rise buildings with insufficient roof space. Rooftop solar is impractical for many...
Royalties: a Financial Innovation for Renewable Energy
The following interview with RE Royalties (RE.V, RROYF) CEO Bernard Tan was conducted in September by AltEnergyStocks.com Editor Tom Konrad. Links and ticker symbols were not included in his original responses, but added by AltEnergyStocks.com as a resource for readers.
Q: What exactly is a renewable energy royalty?
A renewable energy royalty is a stream of cash flows generated by a renewable energy project. When the project generates electricity and sells its electricity, we receive a percentage of the revenues from the electricity sales, otherwise known as a gross revenue royalty. We receive that gross revenue royalty, on average, for about...
Q1 Earnings Roundup: Yieldcos (AGR, BEP, CWEN, GPP)
By Tom Konrad, Ph.D., CFA
This is a roundup of first quarter earnings notes shared with my Patreon supporters over the last week. If there is any theme, it’s that low interest rates and increased interest in green investments is lowering Yieldcos’ cost of capital to the benefit of stock investors.
Avangrid Earnings
Avangrid's (AGR) Q1 earnings report showed solid progress. Key items of note were:
Increased outlook for full year 2021 Adjusted EPS a little over 5%
Key environmental approval for 800 MW offshore wind farm Vineyard Wind. Expected to begin construction later this year, with expected completion in 2024. Avangrid...
Brookfield’s Yieldco Buying Spree
by Tom Konrad Ph.D., CFA
Last week, a Bloomberg reported on a rumor that Brookfield Asset Management (BAM) was in talks to buy Abengoa's (ABGOY) stake in its former YieldCo Atlantica Yield (ABY). Atlantica had been looking for a new sponsor for well over a year since parent Abengoa filed for bankruptcy.
Purchasing Yieldcos (companies that own clean energy infrastructure and use the cash flows to pay large dividends to shareholders) is not new to Brookfield. Not only has BAM long sponsored Brookfield Renewable Partners, LP (BEP), a limited partnership that has essentially been a Yieldco since before the term was...
How Much Can YieldCo Dividends Grow?
Tom Konrad CFA U.S.-listed YieldCos seem to offer the best of two worlds: high income from dividends, combined with high dividend per share growth. YieldCos are listed companies that own clean energy assets, and like the real estate investment trusts (REITs) and master limited partnerships (MLPs) they are modeled after, they return almost all the income from their investments to their shareholders in the form of dividends. Unlike REITs and MLPs, however, U.S.-listed YieldCos have management targets to deliver double-digit per-share dividend growth. YieldCos shown are NRG Yield (NYLD), Abengoa Yield (ABY), TerraForm Power...
List of High Yield Alternative Energy Stocks
This is a list of renewable and alternative energy stocks with dividend or distribution yields above 4%. The list includes most Yieldcos (high distribution companies that own renewable energy operations), but is not limited to Yieldcos. Some Yieldcos may be excluded if their yield is below 4%.
Atlantica Yield plc (AY)
Algonquin Power & Utilities Corp. (AQN, AQN.TO)
Bluefield Solar Income Fund Ltd. (BSIF.L)
Brookfield Renewable Partners L.P. (BEP)
Clearway Energy, Inc. (CWEN,CWEN-A)
Companhia Energética de Minas Gerais (CIG)
Covanta Holding Corporation (CVA)
Crius Energy Trust (KWH-UN.TO, CRIUF)
Enviva Partners, LP (EVA)
Foresight Solar Fund plc (FSFL.L)
GATX Corporation Series A (GMTA)
Global X YieldCo ETF (YLCO)
Greencoat UK Wind PLC (UKW.L)
Green...
Green Bonds From Terraform Global, SolarCity, and Hannon Armstrong
by the Climate Bonds Team Yieldco TerraForm Global (GLBL) issues a whopping $810m green bond (7 years, 9.75%, B2/B+) TerraForm Global Operating has issued an $810m green bond, with 7-year tenor, 9.75% coupon and ratings of B2 and B+ from Moodys and S&P respectively. TerraForm Global is a recent yieldco spin off (IPO last month) of SunEdison (SUNE) group (have a look here if the yieldco concept is new to you). Terraform Global owns and operates renewable energy assets - solar, wind and hydro - in emerging markets, in the following locations: Solar: China, India, South Africa,...
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...
How Much Could Another Yieldco Pay For 8point3?
by Tom Konrad Ph.D., CFA
When SunPower (SPWR) and First Solar's (FSLR) YieldCo, 8point3 Energy Partners (CAFD), went public two years ago, I used the financial nerd joke in 8point3's ticker symbol as a launching point to explain what "cash available for distribution," or CAFD, means.
In that article, I cautioned against the risks of using a short-term cash flow measure for long-term investing decisions. That risk is becoming more and more real for investors in 8point3 because the YieldCo is using short-term, interest-only financing to fund its long-term investments.
All of 8point3's debt matures in 2020, and refinancing that debt will...
Buying Innergex – Texas Was Bad, But Not That Bad
By Tom Konrad, Ph.D., CFA
Last week, I published this call to buy Innergex (INGXF, INE.TO) because investors had been overreacting to the losses from the February cold snap in Texas. The stock is up since then, but still seems a decent value.
Canadian Yieldco Innergex Renewable Energy (INGXF, INE.TO) took a big financial hit from the power disruptions in Texas in March.
It's complex, but their financial hedges on power prices for three of its wind farms ended up creating enormous liabilities - more, in fact, than two of their wind farms are worth. Two of their facilities also had benefits...
Green Bonds Mid-Year Summary 2017
by the Climate Bonds Team
Climate Bonds looks at the last six months numbers, the trends and our tips for the rest of 2017
Green Bonds Mid-Year Summary 2017
Headline figures for the Half Year (H1)
2017 issuance to H1: USD55.8bn
Records broken: Quarter 2 (Q2) is the largest quarter of issuance on record at almost USD30bn
82 green bond deals issued in the quarter from 74 issuers
Over 50% of issuers were first time issuers
Green Bond transactions accounted for 3% of global bond market transactions in Q2 2017
Top 5 largest issuers of H1:
Republic of France (USD7.6bn),
EIB (USD2.8bn),
...
Climate Bond Standard to be Released This Week
Tom Konrad CFA Conserving the planet for conservative investors. Investing in clean energy stocks has an (often well-deserved) reputation for risk. Although energy efficiency and more inclusive progressive energy indexes have held up fairly well over the last few years, the performance of narrower clean energy sectors has been dismal, and some industry observers feel that the declines in wind and solar are structural (and hence permanent) as opposed to cyclical (and therefor temporary.) This presents a conundrum for investors with long time horizons who not only need their investments to earn a steady return...
Retail Renewable Energy Bonds Proliferating
by Sean Kidney Renewable Energy Finance via BigStockPhoto There has been a bit of interest recently about rapidly expanding options for retail investors to get involved in renewable energy projects. While we still see retail bonds as making a relatively modest contribution to the transition to a low carbon economy, they are important in engaging the public and creating awareness for green thematic investments which can only be good. Here’s a round up of some of the activity going on in the retail bond market (please note, this...
Hannon Armstrong Yeild On Track For 7% in Q4 With More To Come
Tom Konrad CFA After the close on Thursday, November 7th, Hannon Armstrong Sustainable Infrastructure Capital (NYSE:HASI) declared third quarter earnings. Results were in-line with my, and other analysts’ expectations: Earnings per share (EPS) of 14 cents, and a declared dividend of 14 cents as well. This more than doubled the second quarter’s 7 cent EPS and 6 cent dividend. Note: I have a large long position in HASI. HASI remains on track to reach managements’ dividend target of “over 7% of the $12.50 IPO price” (22 cents a quarter,) and provided some additional guidance for future dividends....
Hannon Armstrong Declines to Raise Dividend, Sets 3 Year Guidance
Investors did not like Hannon Armstrong's (NYSE:HASI) fourth quarter earnings announcement last night. While core earnings were a little weaker than expected, that is not what has the stock trading down 11% today. What shocked investors is the fact that the company did not raise the dividend this year for the first time since the REIT went public, and it gave 3 year guidance which likely disappointed many investors.
Last month, I wrote,
I expect that Hannon Armstrong will continue to be a well run and conservative business in 2018, and that management will raise the dividend at the lower end...
Green Bond Update: Wind Company Bonds
by Corporate Bonder Market Overview Data compiled by the Bank for International Settlements indicate that the total size of the global debt securities market (domestic and international) was $98.7 trillion as at September 2011, of which $89.9 trillion were notes and bonds. Governments accounted for $44.6 trillion of outstanding debt securities, financial organizations $41.9 trillion, corporations $11.2 trillion and international organizations $1.0 trillion. The focus of this report is on corporate borrowers. US corporations are the largest debt issuers, accounting for 46% of corporate debt globally, followed by the Eurozone with 20%, Japan 9%, China 6%, and...
