A project sponsor might be a business or a municipality that has a resource that can be adapted to produce renewable energy or a project sponsor might be an entrepreneur or group of concerned citizens who want to see a resource in their community converted into a renewable energy resource.

To succeed in bringing about a renewable energy project requires determination, organization and an ability to pull together all of the people and contributors who will be necessary for every stage of the project.

A successful renewable energy project almost always includes these elements:

• One or more key resources;
• A dedicated group of promoters;
• The support of key municipal leaders;
• The support of local business leaders; and
• Experienced legal and financial support.

Key Resources

Renewable energy takes many forms, from hydroelectric power generated by river or tidal power, to the power contained in the biodegradable contents of municipal landfills.

The City of Hoover, Alabama, for example, announced in 2009 that it would begin using the contents of its landfills to generate cellulosic ethanol, a form of alcohol that can be mixed with gasoline or diesel to fuel vehicles. While its project is still in the pilot stage, Hoover, Alabama hopes one day to power all of its vehicles, including ambulance, fire and police vehicles, with liquid fuel generated from its own landfill refuse.

The first step in any renewable energy project is to identify the resource (a river, a tidal estuary, land where there is predictable wind, a landfill, wood or crop residue or other assets) and to obtain the agreement of the owner of that resource to contribute to the project.

Promoters

Like any other large project, a renewable energy project requires promoters who can work tirelessly for months without an immediate hope for compensation.

Successful project promoters are often entrepreneurs who hope to obtain a valuable equity stake in the corporate entity that will own the renewable energy project. While entrepreneurs may have a profit motive, they play a valuable role in pulling together the financial and technical resources necessary to bring the project into existence.

Project promoters can also be concerned citizens or local non-profit groups who simply like the idea of recycling, re-using or repurposing an available asset to produce power.

Producing electricity from renewable resources reduces America's dependence on foreign oil, reduces the production of greenhouse gases and creates the infrastructure needed for America's economy to grow more reliably and more cleanly than before.

While a successful group of project promoters may include individuals with different skills, at least one of the promoters should have the technical background required to understand and explain to different constituencies the technology involved in the energy project and the legal and financial interests involved.

Local Leaders

Both local municipal leaders and business leaders are important when putting together a renewable energy project.

Many renewable projects (like projects involving municipal waste, for example) will not be possible unless municipal governments agree to let the project move forward.Other projects, like wind and hydro power) often require zoning variances or other legal concessions.

A savvy project promoter will work with local political leaders to make sure the project has enough political backing.

Political leaders will often want to know whether the project will require funding. While funding is always a priority for renewable energy projects, recent legislation, including the 2009 American Recovery and Investment Act, have provided federal incentives that can be leveraged to obtain private financing for many renewable projects. When structured correctly, renewable energy projects often have the potential to be structured without the need of public funds.

Financial and Legal Advisors

Financial and legal advisors are absolutely necessary when organizing a renewable energy project. If a project has available resources and local political and business backing it still needs to find the funding necessary to pay for the project.

These transactions usually involve a combination of equity investments from institutions and accredited investors who hope to obtain a return on their investment through the sale of electricity from the project, debt investments from banks and financial institutions who will use the project assets as collateral for their loans and who will expect to have their loans repaid with interest, and tax credit investors who pay cash in exchange for the tax credits that will be produced by the renewable energy project once it begins generating power.

To learn more about organizing renewable energy projects please contact us for a free consultation.