Public policy has played a critical role in creating and shaping global renewable energy
markets. Yet 30 years since the passage of the first federal program in the U.S., under the
Public Utilities Regulatory Policies Act (PURPA), renewable power generation still constitutes
less than three percent of the aggregate U.S. portfolio. In spite of strong growth in project
development, many risks and challenges remain, raising the price of capital in the sector and
limiting acceptance of new power generation technologies. The project team, in cooperation
with the UNEP/BASE Sustainable Energy Finance Initiative (SEFI), conducted a series of
stakeholder interviews and related secondary research in order to understand how U.S.
renewable energy policy environments influence the cost and overall availability of private
financing for renewable power projects. By distilling the perspectives of capital providers
and others familiar with the project financing process, we aim to deliver new insight to
policy-makers on lowering the cost of capital needed to finance new renewable power
projects. Our research findings indicate that although existing renewable energy policies
have been effective in driving new development in the U.S., several problems with policy
design and consistency contribute to the higher cost of renewable versus conventional power
projects. A series of specific policy solutions favored by interviewees are discussed in detail
in the report. Overall, the findings emphasize the opportunity for policy to create a more
stable, transparent, and predictable market for renewable energy, which in turn will lower
financing costs and improve the flow of capital to the sector.