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A dynamic analysis of financing conditions for renewable energy technologies


Renewable energy technologies often face high upfront costs, making financing conditions highly relevant. Thus far, the dynamics of financing conditions are poorly understood. Here, we provide empirical data covering 133 representative utility-scale photovoltaic and onshore wind projects in Germany over the last 18 years. These data reveal that financing conditions have strongly improved. As drivers, we identify macroeconomic conditions (general interest rate) and experience effects within the renewable energy finance industry. For the latter, we estimate experience rates. These two effects contribute 5% (photovoltaic) and 24% (wind) to the observed reductions in levelized costs of electricity (LCOEs). Our results imply that extant studies may overestimate technological learning and that increases in the general interest rate may increase renewable energies’ LCOEs, casting doubt on the efficacy of plans to phase out policy support.

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Fig. 1: CoC over time.
Fig. 2: Components and dynamics of CoC.
Fig. 3: Drivers of changes in financing conditions in a nested hierarchy.
Fig. 4: Experience rates for risk metrics including the 95% confidence interval.
Fig. 5: Changes in the general interest rate level versus debt margins.
Fig. 6: Historical impact of changes in financing costs on LCOE.

Data availability

The data displayed in Figs. 1, 2 and 4 and used for calculations in Figs. 5 and 6 are available upon reasonable request to T.S.S.


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The authors thank M. Jäger, M. Pahle, F. Polzin, L. Reile and O. Tietjen from the INNOPATHS project, participants of the 2017 oikos Finance Academy at the University of Zurich, participants of the 41st IAEE International Conference in Groningen (2018) and members of ETH Zurich’s Energy Politics Group for helpful comments on earlier drafts of the paper. This work was supported by the Swiss State Secretariat for Education, Research and Innovation (SERI) under contract number 16.0222. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Swiss Government. This work was conducted as part of the European Union’s Horizon 2020 research and innovation programme project INNOPATHS under grant agreement no. 730403.

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T.S.S., B.S. and F.E. developed the research idea. F.E., B.S. and T.S.S. conducted the investor interviews, collected, analysed and interpreted the data, and wrote the manuscript. T.S.S. secured project funding.

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Correspondence to Florian Egli, Bjarne Steffen or Tobias S. Schmidt.

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Egli, F., Steffen, B. & Schmidt, T.S. A dynamic analysis of financing conditions for renewable energy technologies. Nat Energy 3, 1084–1092 (2018).

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