Impact Through Renewable Energy
Photos by Oliver Parini
The traditional approach to portfolio construction utilizes the modern portfolio theory to optimize for your individual goals. Within the one-pocket mindset, the traditional approach is tilted to reflect your value set. The challenge here is to find an optimal mix of investments that reflect values without causing the portfolio to take undue risk.
Conscious construction of one’s portfolio is difficult, but not impossible. Over time Access Ventures has sought to find efficient solutions to this complexity within each asset class and has sought out like-minded funds and asset managers where we can make mission-aligned investments that achieve above-market financial returns. One of these funds we are invested in is Greenbacker Capital Management. Greenbacker is an investment management firm that focuses on sustainable infrastructure investing. They connect investors looking to back green energy solutions with sustainable infrastructure projects that need funding.
With Earth Day this week, we decided to catch up with Greenbacker to ask them about their work, impact and the future of renewable energy. Here is what they had to say.
How did Greenbacker get started?
Greenbacker began in 2011, when a group of founders came together around a common goal: to create an investment vehicle that would enable ordinary American investors to participate in the burgeoning revolution in renewable energy. A decade of sacrifice, sweat, and toil, resulted in a business with a gross investment value of $1+ billion and 1+ gigawatt of clean power generation capacity. We’ve been fortunate to attract a talented group of people who have played instrumental roles in propelling our growth.
What types of sustainable infrastructure do you invest in? Why the variety?
Our energy investments consist of 71% solar, 26% wind, 2% battery storage and 1% biomass across 29 states, territories, districts, and provinces. Geographic diversity allows us to offset weather that results in low performance in one region with outperformance in another region. Having a balance in solar and wind helps us diversify seasonally since wind typically outperforms in winter when there is less sun availability.
What does success look like for you? What types of impact metrics are you measuring?
We measure success through growth, stability, and environmental impact.
One of our business goals is the acquisition of assets. We know that the energy needs of the future will require an intense investment in sustainable infrastructure today and we want to be one of the major players involved.
We also want to deliver on our promise to shareholders to provide a stable, reliable source of income. This means creating efficiencies in how we manage the fleet with the expertise of our technical asset management team and making sure we maintain a smooth operation of business across all our departments.
Fighting the climate crisis has always been at the core of our mission. In addition to the direct impact or renewable energy, we’re looking at ways we can be better stewards of the land by planting pollinators at our solar sites, and how we can be better neighbors in the community with programs to provide low-cost or free energy to income-qualified recipients.
How do you work with organizations like Access Ventures to create impact?
Foundations like Access Ventures, who match their investments with their values, are essential to our business model. Investors are increasingly looking for strategies that they can feel good about and that also meet their financial goals. Access Ventures plays a critical role in connecting values-driven investors with opportunities like ours.
Tell us about your Georgia Mountain Community Wind Project. How did this project come about and what makes it special?
Georgia Mountain Wind is a 10-megawatt wind farm on the top of a mountain outside of Burlington, VT. The developer, AllEarth Renewables, was looking to sell the asset. This is a common pattern in our business model. Developers specialize in creating a renewable asset, working out the logistics of the permitting process and putting a Power Purchase Agreement in place with an off-taker. They want to continue developing new projects but have no interest of specialization in the long-term maintenance or operations of the project. So that’s where Greenbacker comes in – to purchase the asset and maintain it as an owner-operator. In the case of Georgia Mountain Community Wind, this collaboration led to a subsequent acquisition of a 5-megawatt wind farm in Massachusetts with the same developer. The other really cool thing about Georgia Mountain Wind is its relationship to a local small business Georgia Mountain Maples which uses the power generated by the farm to run their maple syrup operation.
How did the relationship with Georgia Mountain Maples come about?
Georgia Mountain Maples was already leasing the land for wind turbine use, so it was a relationship we inherited from the developer. Their business and the surrounding community have embraced clean energy and made it a source of local pride. Last summer we worked with the city of Milton, Vermont to have a fireworks display at the site which had a perfect vantage point atop the ridgeline where many residents could see the display.
Greenbacker is celebrating 10 years this year as a firm. What has changed the most in the sustainable infrastructure industry in that time?
Ten years ago, renewable energy was a hard sell. Solar, in particular, was an expensive energy source. But in the last decade, technological advances combined with economies of scale created by global investments, created enormous cost efficiencies. In the last few years, solar and wind reached cost parity with fossil fuels and are now cheaper than coal, oil, and natural gas.
What has changed the most in the world of investing during this time?
There are several trends in investing that a working in our favor:
– More investors are looking for strategies that align with their values.
– Alternative investments are attracting investors who have soured on unpredictable equity markets and low-performing bonds.
– Baby boomers are retiring and looking for uncorrelated, stable income.
What is Greenbacker most excited about when looking into the next 10 years?
We are excited about the electrification of everything. We are rapidly moving toward a world in which electricity is the cheapest, most flexible way of powering things. It’s already the best way to light our homes, and soon it will be the best way to move our vehicles, heat our homes, and power our mass-transit.
We are also really excited about fighting climate change.With the world’s critical need to decrease carbon emissions, renewable energy has emerged as the replacement for traditional fossil fuel power plants—a transition that is accelerating globally.
Anything else you want us to know about?
We are in the midst of a movement in Renewable Energy. A movement that can not and will not be stopped. The good work that we are doing here at Greenbacker is changing the way we both produce and consume electricity for the better, making a difference for our children and our children’s children.
You can learn more about Greenbacker Capital and our full portfolio of managed assets here.