| This dissertation focuses on the various financial structuring options for the renewable energy sector. The projects in this sector are capital-intensive to build but have relatively low operating costs in the long run when compared to traditional energy resources. The large initial capital requirements tend to discourage investors. To encourage renewable investments the government needs to provide financial incentives. Since these projects ultimately generate returns, the government's monetary incentives go to the sponsors and tax equity investors who build and operate such projects and invest capital in them. These incentives are usually in the form of ITCs, PTCs and accelerated depreciation benefits. Also, in some parts of the world, carbon credits are another form of incentive for the sponsors and equity investors to invest in such turnkey projects. The relative importance of these various considerations, however, differs from sponsor to sponsor, investor to investor and from project to project. This study focuses mainly on the US market, the federal tax benefits and incentives provided by the government.;This study focuses on the energy economics that are used for project decision- making and parties involved in the transaction as: Project Developer/Sponsor, Tax equity investor, Debt investor, Energy buyer and Tax regulator.;The study fulfils the knowledge gap in the decision making process that takes advantage of tax monetization in traditional after-tax analysis for renewable energy projects if the sponsors do not have the tax capacity to realize the total benefits of the project.;A case-study for a wind farm, using newly emerging financial structures, validates the hypothesis that these renewable energy sources can meet energy industry economic criteria.;The case study also helps to validate the following hypotheses: a) The greater a sponsor's tax appetite, the tower the sponsor's equity dilution. b) The use of leverage increases the cost of equity financing and the financing fee. c) Capital contributions by the sponsor are not relevant to the rate of return (IRR) over the life of the project.;Overall conclusion is that financial structures can have a major impact on renewable energy, meeting energy demand in an economic manner.;At the end, the dissertation lays down the foundation for future research that can be conducted in this field.;Key Words: Renewable energy investments, structured finance, financial structuring... |
