Finding Funding for Small Energy Projects
Green technology is a smart, forward-thinking investment, but current technological limitations can make it expensive to build things like windmills and solar farms. Thanks to the economics of scale, investors are more willing to give money to larger projects since they see them as a better investment. Clean energy is expensive no matter what, but bigger projects offer more energy for an investor’s money.
For this reason, funding smaller energy projects can be difficult for everyone involved. Here are a few things you can do to make it easier to get investors interested in small energy projects. One important note: these sorts of solutions take years of development; there is no way to guarantee that this kind of deal will become easier overnight.
Standardization in Developing Long-term Relationships
The key to any effective business deal is developing a meaningful relationship with your investors, but it is even more crucial when looking for investors for small-scale energy financing. Set your business up from the get-go to move as quickly as possible to close as many deals as possible. Standardizing documentation will allow you and investors to develop a quick, steady relationship by simplifying the process. Taking the time, in the beginning, to establish terms and standardize documentation will build confidence and allow future deals to move more smoothly.
Confidence Over Time
Another important factor in maintaining critical relationships is building confidence in your investors. You won’t be simply making one deal in order to get your solar farm off the ground; small-scale energy financing requires developing relationships over several years and many transactions. An investment firm is not going to give you all the money you need in the first meeting. Starting small and building a relationship over time is the most effective way to gain investor confidence. And since energy financing is seen as a high-risk investment, that kind of confidence is exactly what you need in order to reach your goal.
The most important thing to know when starting to look for energy financing is that any kind of small-scale investment is going to cause investors to hesitate. The only way around this is to develop strong business relationships that prove that your specific venture, as well as you as a business person, are a good investment. Establishing reliability through years of business dealings is important, as well as standardizing documentation to make sure everything goes as smoothly as possible.
