Meridiam is considering investment opportunities in the regulated utilities sector in the United States and Canada, and has asked the Capstone to provide an introduction to the sector. Due to the complexity of the sector, the team found that the regulatory setup and conditions differ based on every state in the U.S. and province in Canada. Therefore, an understanding of state- or provincial-level regulatory policies and processes will be necessary for the development of any future projects.
This report focused on the current and future trends in the renewable power sector. It provided context for the growth in renewable generation capacity over the past few years and assessed the different drivers of growth that will contribute to future renewable capacity installations. The report also described the capital structures in the industry, including a review of tax equity investors that are currently dominating the market. An overview on the geographical concentration of wind and solar projects in the U.S. and Canada, and a sample of past utility-scale deals was also included in the final report.
Finally, the report briefly addressed the next steps for Meridiam to take if it were to enter the market. Since there will be a significant growth in new renewable generation capacity over the short- to medium-term, the report concluded that the renewable power sector is a suitable industry for Meridiam to invest in. Meridiam should focus on establishing further details on yield returns and prospective market entry strategies.