Debt for Brands: Tracking Down a Bias in Financing Photovoltaic Projects in Germany

Research output: Journal contributionsJournal articlesResearchpeer-review

Standard

Debt for Brands: Tracking Down a Bias in Financing Photovoltaic Projects in Germany. / Lüdeke-Freund, Florian; Loock, Moritz.
In: Journal of Cleaner Production, Vol. 19, No. 12, 08.2011, p. 1356-1364.

Research output: Journal contributionsJournal articlesResearchpeer-review

Harvard

APA

Vancouver

Bibtex

@article{4d3f58bfb0c2494dbf6df53f2032227f,
title = "Debt for Brands: Tracking Down a Bias in Financing Photovoltaic Projects in Germany",
abstract = "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.",
keywords = "Sustainability sciences, Management & Economics, Gesch{\"a}ftsmodell, Business Model, Project finance, Energy research, Solar, Photovoltaik, Photovoltaic, Business Model, Gesch{\"a}ftsmodell, Project management, Photovoltaic, Renewable energy, Entrepreneurship, Business models, Conjoint analysis",
author = "Florian L{\"u}deke-Freund and Moritz Loock",
year = "2011",
month = aug,
doi = "10.1016/j.jclepro.2011.04.006",
language = "English",
volume = "19",
pages = "1356--1364",
journal = "Journal of Cleaner Production",
issn = "0959-6526",
publisher = "Elsevier Science",
number = "12",

}

RIS

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 -