Private Renewable Energy

Leveraging our deep energy expertise and opportunistic investment platform, Kayne invests in renewable infrastructure and other impact-related sectors focusing initially on utility-scale solar

As experienced energy infrastructure investors who have managed through multiple energy cycles, Kayne’s ​renewable energy investment team​ offers a well-grounded perspective on assessing energy projects at various development stages

Highlights

Large and growing investment opportunity within renewables, with an expected global investment of $10.3 trillion through 2050​

Early stages of a low-carbon energy transition being driven by consumer demand and broad public/private interest in reducing greenhouse gas emissions

Inflection point where renewable energy costs are competitive with fossil fuel sources

Strategy

Kayne has longstanding relationships with key leaders in established solar developers

Utility-scale solar has attractive investment characteristics including superior risk-return profiles, scalability, and time-sensitive capital needs with developers

Work collaboratively with counterparties to structure creative capital solutions that result in “better than market” opportunities

Thesis leverages Kayne’s strength in structuring transactions in a niche market that is experiencing transformational changes and the firm’s 30-year history of investing in energy & infrastructure assets

Renewables Having an Impact

In addition to having compelling economics, our existing solar pipeline will generate ~200 billion Kilowatt-hours of electricity during the forecasted project lives

This represents ANNUAL CO​2​ or greenhouse gas emission reductions equal to

Opportunity

  • Renewable fuels are the fastest-growing source of U.S. electricity generation
  • In the U.S. specifically, renewables (wind and solar) installations are expected to increase by over 40 GW over the next five years
  • Coal and nuclear retirements in the next five years expected to exceed 40 GW
  • Wind and solar generation capacity expected to increase from <10% of U.S. electricity generation to ~25% by 2050

Technological advances in battery storage systems balance fluctuations in supply/demand

  • With technological advances, solar power can transition from an intermittent energy source (i.e., not continuously available) to a dispatchable energy source (on-demand at the request of grid operators)
  • Today, fossil fuels provide the bulk of flexibility in the power system, both in terms of dispatchability and meeting peaks in demand
  • Once dispatchable, solar power will be able to provide flexibility in the power system and compete with fossil fuels for high-volume run hours, supporting peaks and load-shifting

Why Focus on Utility-Scale Solar

The unique characteristics of solar investments offer a compelling value proposition compared to other renewable and traditional generation assets

Solar Levelized Cost of Electricity (LCOE) is declining faster than other renewable technologies

  • Declining module costs reducing the cost of installation
  • Innovative technologies (dual-faced panels, tracking technologies) increase capacity factors/output
  • Accordingly, solar expected to be a fast-growing source of electricity generation over the next 30 years
  • Wind and solar generation capacity expected to increase from <10% of U.S. electricity generation to ~25% by 2050

Utility-scale solar assets are lower volatility than other forms of renewables

  • Photovoltaic radiance variability is low, which means that production volatility is more limited
  • These are electronic, not mechanical systems with limited moving parts and components
  • The construction process is simple, and fixed price EPC and O&M contracts remove risk for investors

Utility-scale solar projects provide investors the opportunity to own valuable real assets

  • Real estate: land ownership or rights to land through a long-term ground lease (40+ years)
  • Infrastructure: power grid interconnection

Solar assets can offer investors a compelling cash flow profile

  • High visibility: 10 to 20-year power purchase agreements provide stability and meaningfully de-risk the investment
  • Duration: useful project life of 40 years, potentially longer
  • Investment tax credit “sunset” drives meaningful near-term demand for capital