Why Fintech Will Drive Green Energy Market Growth

The green energy market has witnessed several growth catalysts over the last couple of decades but it still faces challenges especially from the perspective of financing. Credit accessibility is a big issue for renewable energy projects due to the high setup costs involved. 

In addition, project success is not always guaranteed and this raises the risk levels for potential financiers. As a result, governments and other alternative sources of funding have been forced to step in offering different types of credit facilities to startups operating in the renewable energy market.

However, one major advantage of investing in green energy projects is the residual efficiencies that emanate from low operational costs. Therefore, if financiers could see beyond the inception challenges, the renewable energy market could witness a faster acceleration in growth. 

As it stands, reports already indicate that solar energy in the US has been growing at an annual rate of 30% since the year 2010. Overall, renewable energy is estimated to account for about 10% of the Nation’s total energy production. The rapid growth of renewable energy in the US has been partly because of the operational efficiencies of solar energy.

Furthermore, the government has stepped in with several incentives including tax rebates, grants and subsidized loans to try to encourage more players to embrace green energy.

Why credit providers are strict on Renewable energy projects

According to a report published by the Asian Development Bank, one of the main bottlenecks in green energy financing is inadequate credit information. Some of the players in this space are unable to provide verifiable credit information to back their applications for project financing.

The report suggests that it is imperative that the necessary policies and financing interventions be put in place to improve the quality of credit information both technically and commercially. 

Based on technological advances, some of these challenges are already being addressed. The use of blockchain technology in various markets including the credit sector has enabled players to gather more credible information about their customers. 

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Disclaimer: The material appearing on this article is based on data and information from sources I believe to be accurate and reliable. However, the material is not guaranteed as to accuracy nor ...

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