Brookfield Renewable
I’m about to have a first round interview with their Business Development Group. I only have valuation/financial modeling background and never got exposure to renewables. Any idea how to prepare for the renewables side questions? Thank you in advance!
Do you have IB/PE background?
Yes but only as intern. For full time job I only have valuation experience. Never expected I would get the interview lol
https://www.ferc.gov/sites/default/files/2020-06/energy-primer-2020_0.p…
chapter 3 of this will be a good place to start. Use ChatGPT for questions and explanations. Learn the difference between residential solar, community solar, utility scale solar, and C&I solar. Do some research on batteries. Do some research on tax credits (tax equity, ITCs, PTCs).
Learning the renewable industry in 24 hours is going to very tough…
But there’s a chance they don’t ask you a ton on renewables specifically. I would be be honest if you don’t know something industry related, ask questions to learn the basics, and show them how you think through problems.
Really appreciate the advice!!
Adding onto this, you don’t have to be an expert overnight on all power markets. I’m still not after several years on this job. Learn the basics — regulated vs deregulated markets, energy vs capacity, etc., but do not spend your whole time studying markets
Understand that in most markets for most technologies (ie solar, wind or storage), these deals are not financed without a long term power purchase agreement (PPA) with a reputable offtake (utility or corporate) where you sell energy (and/or the capacity and RECs) for a fixed $/MWh price (generally…). There will be a decent bit of ongoing costs related to operations/maintenance, lease agreements, property taxes, etc, but generally expect your EBITDA margins to look healthy (above 50%)
Understand roughly the magnitude of how much these projects may cost to build. Giving out completely arbitrary numbers, a utility scale solar project might cost you $1.5/Watt, a wind project might cost you $2-2.5/W, a storage project might cost even more depending on duration, etc. Insert what size of project the utility scale group at Brookfield might want to do (75MW+ probably in most markets), and you’ll see how huge of an investment these assets are. Id caveat this and my comments on ongoing costs with the warning that these things are totally dependent on many variables (procurement/supply chain, location, site layout/buildability, scale, etc), but I think you should be familiar hearing costs expressed in $/W and understand the magnitude of investment
Above all else, I would make sure you understand at a high level how these deals are capitalized. Understand why tax equity investors exist and how they might invest—i.e., sizing their investment based on a return based on allocated tax credits and cash. Debt and sponsor equity covers the rest. The tax equity market is changing significantly now with different structures, but that’s probably unimportant for the interview.
Knowing Brookfield, if they ask you what Tax Equity is and you don’t have a response, then it’ll be a nearly impossible sell
Good luck
What are your thoughts on the transferability of tax credits as a financing mechanism vs. the legacy tax equity structure? I think I'd argue that larger projects will opt for tax equity as the additional structuring costs is less than the step up and depreciation benefit. But tax credit financing seems relatively easier to do...what are the tradeoffs from your perspective?
Transferability removes a great deal of the complexity with the traditional funding structures — for example, no need to allocate cash and income to pass IRS tests— so it’s generally accepted that it will broaden the universe of potential TE investors.
However, because you can’t transfer any depreciation, on a $/credit basis, the ITC will be worth fewer proceeds, likely 90 cents on the dollar or so.
Theres also a capacity/transaction cost issue. Bigger projects need to offload more tax credits and need more up front capital. Most companies that will enter the transferable market will not have the capacity for many tax credits. And because of the scale we’ve seen traditional TE investors still giving more favorable haircuts due to taking more volume.
I’d imagine for many smaller projects, roughly sub 100 MW, transferability will be great. They can get around traditional TE, build more partnerships with C&I for joint tax credit and power offtake, and won’t mind the haircut b/c usually these smaller projects have better % returns and would get left out of bigger tax equity deals unless bundled.
But overall I wouldn’t even stand by that prediction because this is a really evolving area and theres going to be a lot of tax credit offtake supply coming up and players will get creative to take advantage of this opportunity.
Just had my first round here.
Was just a screener but I have a similar background @aijnewgnahz and was fully expecting the email to be a rejection vs first round.
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