In this new GTM series, we're asking people in cleantech to tell us what their jobs are like. We hope the series can serve as a source of information and inspiration for recent graduates, professionals planning their careers or anyone who wants to transition into the industry.
We also hope it makes cleantech opportunities more visible and accessible to those groups who are underrepresented in our growing industry, including women and people of color.
What do people in solar project financing do?
In short, they multitask.
Financing solar projects, or managing the financial operations of a solar asset, involves a combination of tasks at any given point along the project’s timeline. One needs to be comfortable switching gears quickly. Zoe Berkery, head of asset management at CleanCapital — a solar asset owner and investor — compares it to being a multiple-position athlete.
As the solar industry continues to grow and mature, more professionals are working on financing these projects. Banks, investors, utilities and solar developers all need professionals who can help them understand how much money a project is likely to make and what sort of incentives are available. This is what makes it possible for developers to secure financing and for banks and investors to provide it. It’s an essential step in the process of getting any solar project built.
One day you might be digging into the technical aspects of a project and doing policy research on an incentive program. On another day, you might be facilitating negotiations between project investors (such as a bank or an investment fund), developers and end customers like a utility or commercial company. All of these stakeholders have different appetites for risk and requirements for the project; finding the right balance is what helps solar project finance professionals get deals across the finish line.
What skills are needed for a career in solar project finance?
Quantitative skills are crucial for solar project finance work. It helps if you are drawn to quantitative analysis and enjoy digging into the numbers.
While these roles combine energy industry expertise as well as financial skills, it might be easier to come in with an understanding of solar and gain financial expertise on the job. Formal financial training isn’t always a prerequisite.
If you are more of a high-level thinker, project finance and asset management might not be the right fit for you. According to Berkery, you need to be able to “get into the weeds of a problem.”
But quantitative skills will only take you so far. Communicating complexity and building productive relationships with all stakeholders in a project is also an essential skill for solar project finance.
Rebecca Gallery is a managing partner at Cloudbreak Energy and formerly served as director of business development at Wunder Capital, a commercial and industrial solar financing platform. She spends much of her time trying to better understand what her customers are up against. Being empathetic to what customers are going through, what challenges they face and what they really need is critical for success.
At the end of the day, even smaller commercial solar projects are multimillion-dollar deals. The stakes are high for these customers, so managing conflict and dealing with discomfort comes with the territory.
Berkery explained that a big part of her role is translating the performance of a project to investors who aren’t as familiar with the solar industry. The most effective financing teams communicate with investors and stakeholders frequently.
Becca Glazer, director of new market financial development and structuring at AES Distributed Energy, a solar developer and asset owner, noted the importance of building trust.
From her experience, there’s an optimal balance you need to achieve when approaching negotiations. It’s important to come from a position of strength, while also being able to show vulnerability — to be “human” — with project stakeholders. This creates a trusting environment that can result in strong partnerships, repeat business and a better ability to navigate the challenges that inevitably arise in these complex transactions.
Finally, adaptability is an important attribute for succeeding in the role. According to Lauren Craft, director of asset acquisitions at Distributed Solar Development, a solar development company, the circumstances around a project can change “at the drop of a hat.” Solar project finance professionals need to keep a level head under pressure and collaborate effectively even when faced with significant challenges.
What might people not know about being in solar project finance?
While solar project finance might sound relatively structured and rigid, there is a lot of room for creativity and flexibility when it comes to maximizing the value of a project.
Berkery’s role deals with solar projects after they’ve become operational. But even at this stage, there is massive potential for value optimization.
The lifespan of a solar project is long, so successful initiatives to refinance, recontract, repower or even add battery storage can bring in additional revenue and benefits for investors.
Craft confirmed that the more naturally curious you are, the better. There is a lot of opportunity on each project to explore incentives, policies or contract structures that could help a project pencil out economically. There are lots of details for any given project from contracting language and stipulations to due diligence processes.
Glazer described solar project finance as solving “one big puzzle.” There are tons of pieces in any given project that you have to fit together: sponsor equity, tax equity and debt on one side and then the project’s benefits on the other. Optimally, when the project financing “puzzle” is finished, stakeholders don’t want any gaps left (meaning you aren’t fully monetizing the project’s benefits) or pieces left on the table (meaning you aren’t efficiently structuring the deal so as to maximize capital raised). Getting there is sometimes a challenge, but according to Glazer, it’s a rewarding one.
What are some of your favorite things about your role?
“The people in this industry are fantastic,” says Craft.
Solar project financing involves working with a range of different people to solve technical problems. But the strong sense of camaraderie in the solar industry can make the work fun and bring humor to tough challenges.
Gallery agrees, adding that she particularly enjoys seeing people channel their passion and motivation for fighting climate change into the complexities of a solar project.
Berkery is proud that her work makes institutional investors more comfortable with solar investments. Successful, creative solar project financing work builds on itself, she says, opening up more investments in the space and moving clean energy forward.
What are the biggest challenges you face?
The relatively low numbers of women working in solar project finance continues to be a challenge that can sometimes impact morale at work.
According to Berkery, since finance is still a male-dominated industry, women are not immediately viewed as authority figures, sometimes being mistaken as administrators.
Berkery, Glazer, Gallery and Craft all noted that their companies are highly supportive of them and other women in their organizations. Their companies have been open to feedback and have actively responded by accepting differences in communication styles and work habits.
Financing solar projects requires a host of different skills — but effective communication, fostering trust and a willingness to truly understand the needs of clients are critical for these roles. Given the strengths that these and other women bring to the table, having more women involved in solar project finance can only help more (and better) solar projects get financed.