Advanced Financial Modeling for Renewable Energy

Course Objective

In an online environment, you will build a financial model suitable for advanced analysis of tax equity flip structures for wind and solar projects.This course will provide step-by-step instructions on how to size tax equity investment, back-leverage loan, and how to estimate the sponsor's equity return.By the end of this course, you will be able to build complex, real-life project finance models to analyze tax equity flip structures.

What This Course is About?

Project finance models are used to assess the risk-reward of lending to and investing in an infrastructure project. The project's debt capacity, valuation and financial feasibility depend on expected future cash flows generated by the project and a financial model is built to analyze this. In the tax equity flip structures, there is additional complexity related to the IRS tax rules that have to be reflected in the financial model. On top of that, we have to be able to correctly size the back-leverage debt in the downside scenario, taking into account and reflecting the tax equity's seniority in the financial model.In this course, we will model a complex tax equity flip structure for wind and solar projects in excel.

You will learn about:

How renewable projects are financed;
How to create best practice macro’s and Excel VBA codes to break circularities;
How to size debt based on multiple covenants for wind and solar projects;
how to create best practice macro’s and VBA codes to break circularities
How to model the allocations of tax benefits between tax equity and sponsor, including modeling the capital accounts, DRO, Qualifies Income Offset provisions, and outside basis;
How to size tax equity investment in a yield-based flip;
Optimize the model to achieve the requirements of lender, sponsor and tax equity investor;
Gain insights into the financial model development process, step-by-step – for a renewable energy model;

This is the same comprehensive financial training used to prepare analysts and managers at top financial institutions and infrastructure funds.

How Does It Work?

The course length is over 14 hours.First, we will review how renewable energy projects get financed, so we understand all the essential components of project finance transaction.Then, we will go over the case study and review modeling methods to improve our productivity in excel. We will then dive into building our advanced financial model. We will model the tax benefits allocation and cash distributions before adjustments between partners, which will give us the correct cash flow to the parties.Next, we will size a preliminary back-leverage loan and model the construction funding. Once we have the construction funding, we will work on the adjustments that have to be made to the tax benefits allocated to the tax equity partner. We will implement the IRS requirements in the financial model (capital accounts, DRO, Qualified Income Offset, outside basis). This will allow us to size the tax equity's investment correctly.We will then finalize the calculations of the cash flow available for the distributions to the sponsor. We will have to incorporate the DSCR lock-up and default covenants, and debt service reserve account into the calculations of the sponsor's cash flow to get to the sponsor's IRR.Next, we will work on scenario analysis to find a tax equity transaction structure that could enhance the value of the project for the sponsor and the tax equity partner.And, finally, we will work on modeling the partners' equity return when the sponsor exercises his buyout option. For those, who are interested in the accounting side of the tax equity transaction, we will also include the discussion and modeling of the HLBV accounting.

Is This Course For You?

Yes, if you need to build, review or analyse project finance models for wind and solar projects in the United States.Typical students include analysts, managers, senior managers, associate directors, financial advisors, financiers and CFOs from project companies, investment banks, private equity and infrastructure funds.

Course Prerequisites

Note that this is an advanced financial modeling course, and it is expected that you know how to model the project finance models for renewable energy projects. Most of our students take our other course "Project Finance Modeling for Renewable Energy" before taking the advanced course.

What's inside

Learning objectives

How to model the allocations of tax benefits between tax equity and sponsor, including the capital accounts, dro, qualifies income offset, and outside basis;
How to size tax equity investment in a yield-based flip;
Optimize the model to achieve the requirements of lender, sponsor and tax equity investor;
How to size debt based on multiple covenants for wind and solar projects;
How to create best practice macro’s and excel vba codes to break circularities;

How renewable projects are financed;
Gain insights into the financial model development process, step-by-step – for a renewable energy model;
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How to model the allocations of tax benefits between tax equity and sponsor, including the capital accounts, dro, qualifies income offset, and outside basis;
How to size tax equity investment in a yield-based flip;
Optimize the model to achieve the requirements of lender, sponsor and tax equity investor;
How to size debt based on multiple covenants for wind and solar projects;
How to create best practice macro’s and excel vba codes to break circularities;
How renewable projects are financed;
Gain insights into the financial model development process, step-by-step – for a renewable energy model;
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Syllabus

Introduction to the course

Introduction to the Course

Case Study Review

Welcome to the Excel refresher lessons. In this section, we will briefly go over the modeling methods and Excel formulas that we will be using often in this course. We strongly recommend that you revi

Traffic lights

Read about what's good

what should give you pause

and possible dealbreakers

Focuses on tax equity flip structures, which are complex financial arrangements used in renewable energy project finance

Emphasizes practical skills, such as building macros and VBA codes, which are essential for efficient financial modeling

Explores the Inflation Reduction Act's impact on PTC and ITC, which is highly relevant for renewable energy project finance in the US

Requires prior knowledge of project finance modeling for renewable energy projects, indicating an advanced level of instruction

Models the intricacies of tax equity allocations, including capital accounts and deficit restoration obligations, which are critical for accurate financial projections

Uses Excel for financial modeling, which is a standard tool in the finance industry, but may not expose learners to newer software

Reviews summary

Advanced renewable energy financial modeling (us)

According to learners, this course offers deep, practical knowledge for building financial models for US renewable energy tax equity flip structures. Students appreciate the step-by-step approach to complex topics like tax benefit allocations, capital accounts, and back-leverage loan sizing. While many find the content highly relevant and essential for professionals in the field, some note the significant prerequisite knowledge required, particularly strong prior financial modeling experience or completion of the suggested foundational course. The Excel modeling, including VBA and circularity breaks, is a core part, seen as both a strength for its realism and a potential challenge for those less proficient. Overall, it's viewed as an intensive but valuable course for those with the right background seeking advanced skills.

Content is directly applicable to renewable energy finance careers.

"This course directly addresses the modeling challenges faced by professionals in the renewable energy finance sector."

"Highly relevant skills for anyone working with wind or solar project finance in the US."

"Applying these modeling techniques to real deals is essential, and this course provides the tools."

Hands-on experience building a real-world model.

"Building the complex Excel model step-by-step was the most practical and helpful part."

"The course provides a working model that you build yourself, which is fantastic for learning."

"Gained hands-on experience with circularity breaks and VBA macros in a project finance context."

Detailed coverage of complex US tax equity structures.

"The detailed breakdown of tax equity allocations, capital accounts, and DRO was incredibly valuable."

"This is one of the few places to get such a deep dive into modeling tax equity flips for renewables."

"Understanding the nuances of the tax model was the key takeaway for me; it's very thorough."

Content is dense and requires significant effort.

"Be prepared for a steep learning curve; this course is not for the faint of heart."

"The pace can be quite fast, especially when modeling complex sections."

"Requires dedication and focus to keep up with the detailed financial and tax concepts."

Course assumes strong financial modeling background.

"This course is definitely advanced and requires a solid foundation in financial modeling before diving in."

"Make sure you have taken the prerequisite course or have equivalent experience; otherwise, you will struggle."

"I found it challenging because I didn't fully grasp the basic project finance modeling concepts beforehand."

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Advanced Financial Modeling for Renewable Energy - ( US ) with these activities:

Review Project Finance Basics

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Solidify your understanding of project finance principles to better grasp the advanced concepts in this course.

Browse courses on Project Finance

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Review the fundamental principles of project finance.
Study key project finance terminology.
Practice basic project finance calculations.

Review: Project Finance for Renewable Energy

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Gain a broader understanding of project finance principles and their application to renewable energy projects.

View Alter Ego: A Novel on Amazon

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Obtain a copy of the book.
Read the chapters relevant to wind and solar project finance.
Take notes on key concepts and examples.

Excel VBA Macro Practice

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Sharpen your Excel VBA skills to efficiently handle circularity issues in financial models.

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Find online resources for Excel VBA macros.
Practice writing macros to break circular references.
Test your macros on sample financial models.

Four other activities

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Document Tax Equity Concepts

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Deepen your understanding of tax equity by creating clear and concise documentation of key concepts.

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Research tax equity concepts like capital accounts and DRO.
Write explanations of each concept in your own words.
Create diagrams to illustrate the concepts.

Build a Simplified Tax Equity Model

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Apply your knowledge by building a simplified financial model that incorporates tax equity flip structures.

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Outline the structure of the model.
Implement the tax equity flip logic.
Test the model with different scenarios.

Review: Renewable Energy Finance

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Expand your knowledge of renewable energy finance and gain insights into industry best practices.

View Alter Ego: A Novel on Amazon

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Obtain a copy of the book.
Read the chapters relevant to financial modeling and tax equity.
Compare the book's approach to the course's methods.

Answer Questions in Online Forums

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Reinforce your understanding by helping other students with their questions and challenges.

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Find online forums related to financial modeling.
Monitor the forums for questions about tax equity.
Provide helpful and accurate answers.

Career center

Learners who complete Advanced Financial Modeling for Renewable Energy - ( US ) will develop knowledge and skills that may be useful to these careers:

Tax Equity Investor

Tax equity investors provide capital for renewable energy projects in exchange for tax credits and other tax benefits. As a tax equity investor, one must understand the complexities of tax equity flip structures and how to model them accurately. With the course's comprehensive training on sizing tax equity investments, modeling tax benefits allocations, and optimizing financial models, one gains invaluable skills. The detailed guidance on modeling capital accounts, deficit restoration obligations, and outside basis directly translates to making informed investment decisions. This course offers insights into how renewable energy projects get financed, and you can leverage this knowledge when making investment decisions.

See salaries and explore the career path for Tax Equity Investor

Project Finance Analyst

The role of a project finance analyst involves assessing the financial viability of infrastructure projects, especially in renewable energy. This course helps build a solid understanding of tax equity flip structures for wind and solar projects, which is directly applicable to this role. Project finance analysts must understand how to size debt, model tax benefits, and optimize financial models. The course's focus on modeling tax benefits allocation, sizing tax equity investments, and optimizing models aligns perfectly with the analyst's day-to-day tasks in renewable project finance. The course's insights into financial model development for renewable energy projects provides practical skills.

See salaries and explore the career path for Project Finance Analyst

Financial Modeler

Financial modelers are responsible for creating complex financial models to evaluate investment opportunities and project feasibility. The course will be of use, by teaching relevant skills applicable to modeling renewable energy projects. Financial modelers learn how to incorporate tax considerations. The course's advanced techniques, such as using macros and Visual Basic for Applications codes to break circularities, enhance modeling efficiency and accuracy. Understanding how renewable projects are financed and the nuances of tax equity structures helps financial modelers provide valuable insights to decision-makers. This role often requires an advanced degree.

See salaries and explore the career path for Financial Modeler

Project Finance Officer

Project finance officers manage the financial aspects of infrastructure projects, including structuring deals, securing financing, and monitoring financial performance. This course's focus on tax equity flip structures for wind and solar projects helps project finance officers understand the intricacies of renewable energy project finance. They learn how to size debt, model tax benefits, and optimize financial models to meet the requirements of lenders, sponsors, and tax equity investors. The course's step-by-step guide to building complex project finance models equips project finance officers with the skills to effectively manage renewable energy projects and the financial aspects of them.

See salaries and explore the career path for Project Finance Officer

Renewable Energy Consultant

Renewable energy consultants advise clients on the financial aspects of renewable energy projects, including structuring deals and optimizing returns. This course helps consultants by teaching how to build complex financial models for tax equity flip structures, a common financing method in renewable energy. Consultants need to understand how renewable projects are financed, how to size debt, and how to model the allocation of tax benefits. The course, providing step-by-step instructions on financial modeling and insights into the financial model development process, is especially useful for consultants working on wind and solar projects. A renewable energy consultant will find the course material extremely helpful.

See salaries and explore the career path for Renewable Energy Consultant

Infrastructure Fund Manager

Infrastructure fund managers oversee investments in infrastructure projects, including renewable energy. This course is applicable, as it teaches how to build and analyze complex financial models for tax equity flip structures, a common financing method in renewable energy. Infrastructure fund managers learn how to size debt, model tax benefits, and optimize financial models to meet the requirements of lenders, sponsors, and tax equity investors. The course's step-by-step guide to financial model development equips infrastructure fund managers with the skills to effectively manage their renewable energy investments. This role often requires an advanced degree.

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Asset Manager

Asset managers oversee the performance of investments, including renewable energy projects, to ensure they meet financial goals. This course can be quite useful, with its focus on building financial models for tax equity flip structures. Asset managers learn how to analyze the financial feasibility of projects, optimize returns, and manage risks. The course's coverage of debt sizing, tax benefit modeling, and scenario analysis allows asset managers to make informed decisions and maximize the value of their renewable energy assets. The training provided in step-by-step financial model development is essential for managing renewable energy assets.

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Private Equity Associate

Private equity associates evaluate investment opportunities, conduct due diligence, and build financial models to assess potential returns. The course could be useful, as it covers advanced financial modeling techniques applicable to renewable energy projects. Private equity associates gain a deeper understanding of tax equity flip structures, debt sizing, and tax benefit modeling. The course's comprehensive training helps them make informed investment decisions and optimize financial models to maximize returns. The knowledge gained will assist in evaluating if renewable energy projects offer the financial returns expected, and the risks associated with those investments.

See salaries and explore the career path for Private Equity Associate

Energy Finance Director

Energy finance directors lead the financial strategy and operations of energy companies, including renewable energy providers. This course will enhance the skills necessary to build financial models for tax equity flip structures. Energy finance directors learn how to assess the risk-reward of lending to and investing in renewable infrastructure projects. The course's coverage of debt sizing, tax benefit modeling, and optimization techniques enables energy finance directors to make strategic financial decisions and optimize the company's financial performance. The step-by-step insights into financial model development is useful.

See salaries and explore the career path for Energy Finance Director

Investment Banker

Investment bankers advise companies on mergers, acquisitions, and capital raising, often specializing in specific industries like renewable energy. The course may be useful, as it provides a deep dive into financial modeling of tax equity flip structures for wind and solar projects. Investment bankers learn how to assess the risk-reward of lending to and investing in renewable infrastructure projects. The course's coverage of debt sizing, tax benefit modeling, and optimization techniques will be useful. Developing a financial model provides insights into the financial model development process, step-by-step.

See salaries and explore the career path for Investment Banker

Financial Controller

Financial controllers oversee the accounting and financial reporting of an organization, ensuring accuracy and compliance. This course may be relevant, as it delves into the financial modeling of renewable energy projects, including tax equity flip structures. Financial controllers can leverage this knowledge to better understand the financial implications of renewable energy investments. Topics such as capital accounts, deficit restoration obligations, and outside basis provide a deeper understanding of the accounting complexities associated with renewable energy projects. The training that the course provides can be used to analyze the financial models.

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Sustainability Consultant

Sustainability consultants advise organizations on how to improve their environmental and social performance, often with a focus on renewable energy adoption. This course may be helpful, as it provides a strong foundation in the financial aspects of renewable energy projects. Sustainability consultants gain insights into how these projects are financed, the role of tax equity, and the economic considerations driving investment decisions. Understanding financial models helps consultants develop effective strategies for promoting renewable energy adoption. The course's lessons on the financial workings of tax equity investments is of use to sustainability consultants.

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Energy Economist

Energy economists analyze the economic aspects of energy production, distribution, and consumption, often focusing on renewable energy sources. This course may be useful as it covers the financial modeling techniques used to evaluate renewable energy projects. Energy economists can use this knowledge to assess the economic viability of different projects. The focus on tax equity flip structures and debt sizing equips economists with tools to analyze the competitiveness of renewable energy compared to other energy sources. Economic modeling techniques can supplement the knowledge that energy economists already have.

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Regulatory Affairs Specialist

Regulatory affairs specialists ensure that a company complies with relevant laws and regulations, often in the context of energy and environmental policies. The specialist may find this course useful because they need to understand the financial implications of different regulatory frameworks, especially regarding tax incentives for renewable energy. The content on tax equity flip structures and the allocation of tax benefits provides them with valuable insights. This helps regulatory affairs specialists assess the impact of policy changes. In this course one will learn about the PTC and ITC before and after the Inflation Reduction Act.

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Energy Market Analyst

Energy market analysts research and analyze trends in the energy market, providing insights to inform investment and strategic decisions. The analysts who take this course may gain insights into the financial modeling of renewable energy projects. Energy market analysts gain a deeper comprehension of tax equity flip structures and the financial drivers behind renewable energy investments. The content regarding debt sizing and tax benefit modeling equip analysts with knowledge to evaluate the economic viability of different renewable energy projects. The course has step-by-step guides with the technical knowledge of financial modeling.

See salaries and explore the career path for Energy Market Analyst

Reading list

We've selected one books that we think will supplement your learning. Use these to develop background knowledge, enrich your coursework, and gain a deeper understanding of the topics covered in Advanced Financial Modeling for Renewable Energy - ( US ).

Alter Ego

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Provides a comprehensive overview of project finance in the renewable energy sector. It covers key aspects such as risk assessment, financial modeling, and deal structuring. It is particularly useful for understanding the nuances of financing wind and solar projects, which are the focus of this course. This book serves as a valuable reference for both beginners and experienced professionals in the field.

Alter Ego: A Novel

Paperback

Advanced Financial Modeling for Renewable Energy - ( US )

What's inside

Learning objectives

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Advanced renewable energy financial modeling (us)

Activities

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