Regardless of the successes that renewable energy has had in the past decade, there is little doubt that it is still an industry (or subset of an industry) that needs assistance to be viable. Much of the strides have come via government grants, loans, and subsidies. This continues: the wind energy sector has seen a significant drop in installations, due to the federal government’s expiration of the wind energy tax credits. So as the renewable energy industry continues, the biggest question is: will it remain financially viable?

There are still many government incentives available. One key factor is location. Many states provide incentives for renewables, some of them significant. In addition, a reduction in capital costs, especially solar, has led to cheaper installation costs and competitive market rates.

What the funder wants to see is, then, is competitive renewable technology that will quickly recoup the investor their investment and provide a decent return in the following years. If government incentives are a part of the equation, they must be reliable: an investment cannot count on tax breaks or grants that might phase out or expire the next year. In addition, many Pennsylvania solar installations were partially financed by SRECs, or Solar Renewable Energy Credits. These credits were sold by the owner of a solar installation to companies that needed to meet state standards for renewable energy, and provided a big incentive for solar power installers. Any type of government incentive should be guaranteed for the investor to feel confident they will get their investment back.

On top of the financials, an investor will want to have trust in the company itself. A company with a solid, reliable history (10-15+ years), and proven track record and sound accounting will give that much more strength to their request for funding.

There are several finance-based figures that will assist both the company and the investor to know what kind of footing the company is on and whether a large scale investment is viable. Cash on hand, total debt, cost of debt, and percentage of debt all can give an initial look into the state of the company. The lower the debt rates, and the more the cash on hand, the better footing a company has and the investor is more assured the company practices sound financial habits and good chance of remaining in business. Other figures, such as WACC (Weighted Average Capital Cost) and APV (Average Present Value), will give further insight into the company financial standing and how it will be able to finance its own projects. Return on Investment will also be an important figure, so the investor can ascertain just how quickly their money is recovered and how much the company will benefit in the years to come.