Ed Zaelke, chair of Akin Gump’s global project finance practice, has authored the article “The Year Of The Yieldco: How Last Year’s Top Finance Trend Impacts The U.S. Wind Market,” which appeared in North American Windpower. The article addresses some of the most important developments in the U.S. wind industry last year, including capital raising, M&A activity and the political arena.

Zaelke writes that, while the yieldco first came to market in 2013, it was not until last year that renewable energy industries, including wind, “came to appreciate the changes that yieldcos would offer in terms of reducing the cost of capital projects.” He then discusses the typical structure of a yieldco and the potential it provides, nothing that yieldcos “are able to raise capital at lower rates and, therefore, can be more competitive in purchasing wind farms when bidding against other buyers with a higher cost of capital.”

The short-lived extension of the federal production tax credit (PTC) at the end of 2014 was a significant event for the wind industry, Zaelke says, but “it is still too early to know the impact on the industry of the Republican-controlled Congress.” Still, he adds, the fact that any PTC extension was agreed upon, “may be an indication of things to come.”