Debt for Brands: Tracking Down a Bias in Financing Photovoltaic Projects in Germany
Publikation: Beiträge in Zeitschriften › Zeitschriftenaufsätze › Forschung › begutachtet
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Debt for Brands : Tracking Down a Bias in Financing Photovoltaic Projects in Germany. / Lüdeke-Freund, Florian; Loock, Moritz.
in: Journal of Cleaner Production, Jahrgang 19, Nr. 12, 08.2011, S. 1356-1364.Publikation: Beiträge in Zeitschriften › Zeitschriftenaufsätze › Forschung › begutachtet
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TY - JOUR
T1 - Debt for Brands
T2 - Tracking Down a Bias in Financing Photovoltaic Projects in Germany
AU - Lüdeke-Freund, Florian
AU - Loock, Moritz
PY - 2011/8
Y1 - 2011/8
N2 - What kinds of PV project configurations do lenders prefer to finance? Recent developments in the field of renewable energy project finance have reinforced the need for investigation, as fundraising has become more challenging and project evaluation by banks more demanding. To contribute to the limited research in this field, we focus on photovoltaic projects and report from an Adaptive Choice-Based Conjoint experiment with German experts in project finance. We find a bias which we call "debt for brands". Simulations reveal that debt investors prefer projects with premium brand technology (modules, inverters) to low-cost technology. Although we assumed that lenders prefer projects with the highest Debt Service Cover Ratio (DSCR), they favor projects with lower DSCR, as long as those projects include premium brand technology. We find that, if premium brands were engaged, lenders would also choose projects with higher risk. Our findings have implications for renewable energy project finance in practice and research.
AB - What kinds of PV project configurations do lenders prefer to finance? Recent developments in the field of renewable energy project finance have reinforced the need for investigation, as fundraising has become more challenging and project evaluation by banks more demanding. To contribute to the limited research in this field, we focus on photovoltaic projects and report from an Adaptive Choice-Based Conjoint experiment with German experts in project finance. We find a bias which we call "debt for brands". Simulations reveal that debt investors prefer projects with premium brand technology (modules, inverters) to low-cost technology. Although we assumed that lenders prefer projects with the highest Debt Service Cover Ratio (DSCR), they favor projects with lower DSCR, as long as those projects include premium brand technology. We find that, if premium brands were engaged, lenders would also choose projects with higher risk. Our findings have implications for renewable energy project finance in practice and research.
KW - Sustainability sciences, Management & Economics
KW - Geschäftsmodell
KW - Business Model
KW - Project finance
KW - Energy research
KW - Solar
KW - Photovoltaik
KW - Photovoltaic
KW - Business Model
KW - Geschäftsmodell
KW - Project management
KW - Photovoltaic
KW - Renewable energy
KW - Entrepreneurship
KW - Business models
KW - Conjoint analysis
UR - http://www.scopus.com/inward/record.url?scp=79958110337&partnerID=8YFLogxK
U2 - 10.1016/j.jclepro.2011.04.006
DO - 10.1016/j.jclepro.2011.04.006
M3 - Journal articles
VL - 19
SP - 1356
EP - 1364
JO - Journal of Cleaner Production
JF - Journal of Cleaner Production
SN - 0959-6526
IS - 12
ER -