Tuesday, July 26, 2011

New Career (and New Paper) - Carbon Fighter

Hello to my small community of readers,

It's been ages since I wrote about global carbon issues, but I'm using this forum to announce I will be starting a new job soon. No longer an academic (cough), I will be working for BrightSource Energy (BSE) in Oakland, CA. BSE is a concentrating solar thermal power (CSP) technology and development company. Founded by a core group of Israeli technologists who pioneered parabolic trough CSP in California in the 1980's, BrightSource utilizes heliostat power-tower CSP technology to produce more reliable, peak renewable energy. The company has the largest pipeline of utility renewable energy contracts with 2.6 GW between California utilities PG&E and SCE. I will be working in the Originations team focusing on new and existing PPAs and utility relationships.

I also wanted to post the research paper that fellow Haas '11 classmate, Jake Carney, and I published called Credit Risk Implications and Default Mitigation Strategies For Commercial Solar Financing. Here is the paper's problem statement:

"In order to expand the financeable, addressable market for commercial and industrial solar PV systems, innovative approaches must be developed and proven to financiers to facilitate capital flows. In the current financing environment, the common practice is to account for a solar system, which has experienced a host default, for purposes of financial modeling, as having lost 100% of its future economic value. This results in a credit requirement cliff in decision making by financiers. Financiers acknowledge that loss mitigation may very well occur in the event of default, but due to uncertain outcomes, lack of precedents or lack of competitive pressures, the expected value of mitigation efforts is not given any credence – to the benefit of financiers and the detriment of developers and host customers

Leaders in the commercial solar developer community must present compelling cases to financiers regarding legitimate strategies to mitigate lost revenues. Some of these strategies may exist today in the form of regulatory programs, alternative financing structures and comparable scenarios from the real estate industry, while other strategies may need to be explored such as contract structuring, credit support, market-based solutions and policy advocacy."