Guidebook to Geothermal Power Finance
The Guidebook to Geothermal Power Finance (the Guidebook), funded by the U.S. Department of Energy's Geothermal Technologies Program, provides insights and conclusions related to past influences and recent trends in the geothermal power project financing market before and after the 2008 economic downturn.
Using the information in the Guidebook, developers and investors can innovate in new ways and develop partnerships that match investors' risk tolerance with the capital requirements of geothermal power projects in a dynamic and evolving marketplace.
The Guidebook relies heavily on interviews conducted with leaders in the field of geothermal project finance. It includes detailed information on the history of the market, policies, stages, and challenges related to geothermal power project financing.
Insights and Conclusions
The Guidebook reaches several conclusions and provides insights into the past, current, and future trends in the geothermal power project financing market. It notes that investment in conventional geothermal projects on the utility side of the meter has evolved dramatically since the economic downturn began in 2008.
Developers and investors identified innovative approaches to address the capital constraints that permeate the market, and took advantage of new policy incentives that emerged. These innovations were especially important in the early stages of project development, when capital providers must be comfortable with the risk associated with resource identification and test well drilling. Innovations later in the project development process responded to changes in the way that projects took advantage of federal incentives, including the Section 1603 Treasury Cash Grant Program that reduced the need for tax equity in 2009 through 2011 and potentially beyond.
Developers and investors continue to innovate in new ways, creating partnerships that match investors' risk tolerance with the capital requirements of geothermal projects; the marketplace is dynamic and will continue to evolve.
Read the full Guidebook to Geothermal Power Finance.