• About
    • Which Energy Mix is this?
  • Climate News Network Archive
  • Contact
The climate news that makes a difference.
No Result
View All Result
The Energy Mix
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
No Result
View All Result
The Energy Mix
No Result
View All Result
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
  FEATURED
Repsol Abandons Plan to Ship Canadian LNG to Europe March 17, 2023
Biden Approves $8B Oil Extraction Plan in Ecologically Sensitive Alaska March 14, 2023
U.S. Solar Developers Scramble after Silicon Valley Bank Collapse March 14, 2023
$30.9B Price Tag Makes Trans Mountain Pipeline a ‘Catastrophic Boondoggle’ March 14, 2023
UN Buys Tanker, But Funding Gap Could Scuttle Plan to Salvage Oil from ‘Floating Time Bomb’ March 9, 2023
Next
Prev

U.S. Solar Developers Scramble after Silicon Valley Bank Collapse

March 14, 2023
Reading time: 5 minutes
Primary Author: Mitchell Beer @mitchellbeer

David Dodge, Green Energy Futures/flickr

David Dodge, Green Energy Futures/flickr

1
SHARES
 

More than 1,550 community solar, battery storage, and hydrogen firms in the United States were rushing to regroup after last week’s collapse of the Silicon Valley Bank (SVB), which had issued them billions of dollars in operating loans.

The bank, which folded on Friday after about a year of gradual decline, was involved in financing 62% of the country’s community solar projects, which are often meant to serve lower-income neighbourhoods, the New York Times reports. “The devastation comes at a critical moment for a nascent industry that is central to the effort to cut the greenhouse gases dangerously heating the planet,” the Times says.

  • Concise headlines. Original content. Timely news and views from a select group of opinion leaders. Special extras.
  • Everything you need, nothing you don’t.
  • The Weekender: The climate news you need.
Subscribe

“While the Biden administration took steps over the weekend to prevent the immediate failure of thousands of climate technology and clean energy companies that relied on Silicon Valley Bank, it hasn’t been able to find a buyer willing to take on SVB’s domestic lending portfolio—leaving some major companies scrambling to secure new lines of credit,” E&E News writes.

“The administration’s moves, which include backing all of SVB’s cash deposits, also have failed so far to quell broader concerns about midsize regional banks, which often are more willing to support new companies and up-and-coming industries,” E&E adds.

It was the biggest U.S. bank failure since the 2008 financial crash. Forbes contributor Mark Le Dain has an account of how the collapse took shape and what happens next, while Politico chronicles the U.S. government’s rescue effort.

The ‘Climate Bank’

“Silicon Valley Bank was in many ways a climate bank,” Kiran Bhatraju, CEO of Arcadia, the country’s biggest community solar manager, told the Times over the weekend. “When you have the majority of the market banking through one institution, there’s going to be a lot of collateral damage.”

And the crash came at a moment when climate tech “is one of the few bright spots in an overall tech downturn,” added Sarah Sclarsic, managing partner at climate venture capital firm Voyager. “This isn’t folks in Silicon Valley building photo sharing apps. These are folks across the whole country, in Detroit and Texas and everywhere in between, building things that matter.”

The Times talked to some of the companies affected by the crash and traced the uncertainty they face over the next several months. Forbes columnist Le Dain points to the big hole the bank’s departure leaves in the private financing driving the U.S. clean technology boom.

“SVB formed a dedicated cleantech practice approximately 15 years ago, well ahead of most of its financial peers,” he writes. “This was a signal to many cleantech entrepreneurs that this was the bank for them, and it also meant the bank typically had more experience in the sector.”

Last year, the bank committed US$5 billion to sustainability loans and investments, compared to the hundreds of millions available from larger public banks. “If you were a builder in cleantech you liked everything they were doing, but you now find yourself unable to access your funds,” Le Dain said before the federal rescue plan was announced. Now, even with those deposits secured, SVB’s demise leaves its former clients without the credit they depend on to maintain and expand their operations.

SVB “was the bank that would always pick up the phone when other large money center banks wouldn’t,” tech sector analyst Daniel Ives of Wedbush Securities told E&E News, and its failure will “put much tighter financial conditions for banks around startups.”

How Many Additional Headwinds?

That makes the bank’s collapse “a major blow to early-stage and even late-stage tech startups looking to get financing,” he said.

“These things start to add up,” said sustainable finance analyst Daniel Firger, founder of Great Circle Capital Advisors. “How many additional headwinds can early-stage climate tech founders sail upwind against?”

Galvanize Climate Solutions co-founder Tom Steyer recalled SVB as a bank that was willing to work with northern California start-ups with neither assets nor cash flow to bring to the table. Despite those risks, “this wasn’t the part of the business that got them into trouble,” he told Bloomberg Green. “What failed is the way they ran their balance sheet.”

But several analysts told multiple news outlets that the loss will be felt keenly—and the country’s cleantech entrepreneurs aren’t out of the woods yet.

“When we talk about climate innovation, we’re often talking about cutting-edge, highly experimental, and at times risky developments,” said Amali de Alwis, CEO of Subak, a non-profit climate accelerator based in the UK. That can mean large, long-term investments in hardware and technology, she told Bloomberg.

“The question is, if it’s not SVB, who is it?”

But “if the flywheel of financing for early-stage climate innovation stops during these critical years, that’s going to be a big problem,” Firger told the Times.

Solar Companies Step Up

While Bhatraju told Utility Dive the collapse will “have an impact on the broader industry,” he and other industry executives were already pointing to the steps they could take to stabilize their operations.

Mary Powell, CEO of rooftop solar giant Sunrun, said her company had less than $80 million on deposit with SVB, adding that she was “pleased” the federal government had made sure those funds were available. Beyond that, “Sunrun has long-standing banking relationships with a large number of financial institutions, and we remain confident in our ability to replace SVB’s undrawn commitments,” she said.

Community solar company Nautilus Solar Energy said it was unaffected by the collapse, but expressed support for “those in our industry negatively impacted,” Utility Dive says. Home solar company Sunnova said its exposure was limited to SVB being a lender to one of its warehouses.

Raymond James renewable energy research analyst Pavel Molchanov said U.S. banks have a “strong appetite” for solar and other renewable energy projects because of the “low risk involved”. That interest will ensure that other lenders step up to take SVB’s place.

“Of course other financiers will fill the gap because these are some of the best infrastructure projects in America,” Bhatraju agreed. “But [financing] pipelines will be in flux for some time as those new relationships get sorted out and due diligence processes get under way.”

Molchanov said the “more substantive issue for project developers in recent months has been the cost of capital, which of course has risen along with higher benchmark interest rates.” That means community solar companies have “plenty of cash is available, just at a higher cost.”



in Batteries / Storage, Cities & Communities, Clean Electricity Grid, Community Climate Finance, Energy Access & Equity, Finance & Investment, Hydrogen, Solar, Sub-National Governments, United States

The latest climate news and analysis, direct to your inbox

Subscribe

Related Posts

Environmental Defence Canada/flickr
Shale & Fracking

Repsol Abandons Plan to Ship Canadian LNG to Europe

March 18, 2023
232
U.S. Bureau of Land Management/flickr
Oil & Gas

Biden Approves $8B Oil Extraction Plan in Ecologically Sensitive Alaska

March 14, 2023
129
U.S. National Transportation Safety Board/flickr
Pipelines / Rail Transport

$30.9B Price Tag Makes Trans Mountain Pipeline a ‘Catastrophic Boondoggle’

March 14, 2023
250

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

Trending Stories

David Dodge, Green Energy Futures/flickr

U.S. Solar Developers Scramble after Silicon Valley Bank Collapse

March 14, 2023
444
Environmental Defence Canada/flickr

Repsol Abandons Plan to Ship Canadian LNG to Europe

March 18, 2023
232
Joshua Doubek/Wikipedia

No New Jobs Came from Alberta’s $4B ‘Job Creation’ Tax Cut for Big Oil

October 6, 2022
839
Rebecca Bollwitt/flickr

Fossils Stay ‘Oily’, Gibsons Sues Big Oil, U.S. Clean Energy Booms, EU Pushes Fossil Phaseout, and Fukushima Disaster was ‘No Accident’

March 14, 2023
203
moerschy / Pixabay

Fringe Conspiracy Theories Target 15-Minute City Push in Edmonton, Toronto

February 22, 2023
1.7k
Behrat/Wikimedia Commons

Hawaii Firm Turns Home Water Heaters into Grid Batteries

March 14, 2023
459

Recent Posts

U.S. Bureau of Land Management/flickr

Biden Approves $8B Oil Extraction Plan in Ecologically Sensitive Alaska

March 14, 2023
129
EcoAnalytics

Canadians Want Strong Emissions Cap Regulations, Not More Missed Targets

March 14, 2023
132
U.S. National Transportation Safety Board/flickr

$30.9B Price Tag Makes Trans Mountain Pipeline a ‘Catastrophic Boondoggle’

March 14, 2023
250
Raysonho/wikimedia commons

Purolator Pledges $1B to Electrify Last-Mile Delivery

March 14, 2023
87
United Nations

UN Buys Tanker, But Funding Gap Could Scuttle Plan to Salvage Oil from ‘Floating Time Bomb’

March 10, 2023
96
Gage Skidmore/Wikimedia Commons

Biden Cuts Fossil Subsidies, But Oil and Gas Still Lines Up for Billions

March 10, 2023
186
Next Post
U.S. Bureau of Land Management/flickr

Biden Approves $8B Oil Extraction Plan in Ecologically Sensitive Alaska

The Energy Mix - The climate news you need

Copyright 2023 © Energy Mix Productions Inc. All rights reserved.

  • About
  • Contact
  • Privacy Policy and Copyright
  • Cookie Policy

Proudly partnering with…

scf_withtagline
No Result
View All Result
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities

Copyright 2022 © Smarter Shift Inc. and Energy Mix Productions Inc. All rights reserved.

Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}