Webinar Recap: Scaling Distributed Energy, From Blueprint to Market Action

Navigating the shifting landscape of distributed energy poses a major challenge, particularly with the recent passing of the One Big Beautiful Bill. While there are obstacles to overcome, industry experts shared their optimistic views on the future of clean energy in our latest webinar, "Scaling Distributed Energy: From Blueprint to Market Action." 

Amanda Li, COO & Co-Founder of Banyan Infrastructure, David Clamage, Managing Director & Founder of Saulsbury Hill Financial, and Andreas Karelas, Executive Director & Founder of RE-volv, acknowledged the current hurdles while also identifying new opportunities and strategies for continued growth.

The New Challenges in a Volatile Market

The panel agreed that uncertainty is the single biggest challenge facing the distributed energy sector today. It's like trying to build a house on shifting sand. With tax credits, tariffs, and government programs constantly changing, it's incredibly tough for developers and investors to plan for the future. The panelists noted several specific issues:

• Tariff Fluctuation: Swings in tariffs have made it difficult to predict project costs and secure supply chains.
• The "One Big, Beautiful Bill" (OBBB): Rules like the Foreign Entity of Concern (FEOC) and the planned phase-out of residential and commercial solar tax credits are adding layers of complexity and making it harder to get projects off the ground.
• Frozen Funds: The temporary freezing of funds from agencies like the EPA and DOE has created a bottleneck for projects that rely on these sources of capital.

This uncertainty is affecting everyone in the industry, from the big-name financial backers to the small, local engineering and construction firms. 

Despite all these challenges, the general feeling is that the industry is resilient and determined to find a way to navigate these turbulent waters.

New Opportunities and Bullish Strategies

Even with the current challenges, the panelists remain optimistic. They see new opportunities emerging as a result of these market shifts.

Focus on State and Local Governments

David Clamage highlighted that projects for states and their constituents will continue to attract capital. The push for resilience is a major driver, and he anticipates that state subsidies will increase to support the electrification of everything from school buses to public buildings. The tax-exempt lease purchase (TELP) model, which has been in use for decades, offers a stable, liquid, and low-interest financing option for these government entities and nonprofits.

The Power of Philanthropy and Private Capital

Andreas Karelas pointed out the massive pipeline of projects created by the GGRF and the opportunity to leverage that work. With the right partnerships, private and philanthropic capital can fill the gaps left by a less-certain tax credit environment. For example, foundations and impact investors can provide credit enhancements and low-cost subordinate debt to make projects pencil out even without a federal tax credit.

Creating Efficiencies to Reduce Costs

A key long-term opportunity is to reduce the industry's reliance on tax credits by increasing efficiency and lowering soft costs (permitting, interconnection, customer acquisition, etc.). The panelists noted that soft costs in the U.S. are significantly higher than in other parts of the world. Leveraging data and technology to streamline processes is a major focus for companies like Banyan Infrastructure and RE-volv, who believe that a more efficient industry can thrive regardless of policy changes.

Data and Partnerships: The Keys to Navigating Change

The Importance of Bulletproof Data

All three panelists stressed that in this new, more complex environment, data is mission-critical. With the potential for increased audits and stricter compliance requirements, it's essential to have a bulletproof document set for every project. This includes tracking every detail, from the sourcing of materials and supplies to the application of tax regulations and local permits. While new AI tools can help with modeling and data management, the panelists warned that a human touch is still necessary to vet sources and ensure accuracy.

Collaborating to Unlock Growth

Partnerships are more important than ever. The panelists highlighted several key types of collaborations:

• Nonprofits and Financiers: Organizations like RE-volv and Saulsbury Hill Financial are working together to finance projects for schools, churches, and other community-based nonprofits.
• Green Banks and Private Capital: Green banks, which often have their own pools of capital, are co-investing with private institutions to recycle capital and make loans at a lower cost.
• Local Communities: Networking with local associations, banks, and state energy offices can help projects scale, making them more affordable and appealing to a broader range of investors.

In this new environment, it’s not just about finding capital; it’s about creating a connected ecosystem where developers, financiers, and communities can share data, insights, and resources to build a more resilient and sustainable future.

Final Words of Advice

The clean energy train has already left the station. While the recent policy changes have created a "speed bump," the industry's momentum is unstoppable.

Andreas's advice: The industry will figure this out. Focus on projects where resiliency is key, electricity costs are high, and community support is strong.

David's advice: Join local associations, connect with a network of expert advisors, and talk to your local finance communities. Collaboration at every level will be the key to success.

Watch this webinar on-demand here. Want to get involved? Connect with Banyan Infrastructure today!