The other Yale group was asked to develop a solar energy strategy for a utility company faced with a new Renewable Portfolio Standard carve-out calling for 4 percent of electricity to come from solar energy.
“So we had to decide what types of solar assets we were going to invest in, what percentage of the carve-out should be met with each asset type, and how we were going to finance the whole portfolio,” said Hilary Staver. “The finance part was especially interesting because there is so much new ground being broken in solar finance right now.”
Their plan included a series of measures to reduce the costs of so-called “soft costs” associated with solar development, including the non-hardware costs associated with permitting, installation, labor, and public advertising.
In addition to calling for a more streamlined, online permitting process and peer-influenced advertising, they suggested that the utility could reduce capital costs by utilizing a financial tool known as securitization, in which sources of debt are sold to investors on the secondary market.
Some of these strategies related to reducing soft costs, Staver said, are areas of active research at the Center for Business and the Environment at Yale
(CBEY), a joint initiative of F&ES and the Yale School of Management. “So it was nice for us to work on something that a couple of us on the team already had some on-the-ground experience with,” she said.