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Solar, Wind No Longer Face High Capital Costs, Says Shah

Developers of solar and wind power projects can now access capital at a lower cost, paving the way for continued growth, Jigar Shah, founder and former chief executive officer of SunEdison said in an interview.

Capital costs are now often less than 6 percent to 7 percent thanks to financing sources and greater investor comfort with financing renewable energy projects, Shah said today at the Bloomberg New Energy Summit today in New York.

“Most people in this room believe that access to the lowest cost of capital is completed,” said Shah, who heads a consulting company, in an interview.

New financing methods such as yield companies -- separate businesses that own power plants being pursued by Abengoa SA (ABG) and NRG Energy Inc. (NRG) -- and increased participation in the industry by pension funds make sense because the cost of making those projects is fixed, Shah said.

“The question is: can developers develop enough projects to satiate the money?” he said. “Can this industry really deliver the deals now that the money isn’t an issue? Can you feed the beast? We are long money and short deals.”

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