Published on March 25th, 2016 | by Zachary Shahan0
Green Bonds For Retail Investors, Tesla Model S Service Screens, & Ontario EV Rebates (Cleantech Talk #21)
March 25th, 2016 by Zachary Shahan
Kyle and Matthew decided to sneak around behind my back and do a Cleantech Talk episode without me recently… (no, actually, I was just off in India presenting at an institutional investment conference at the time). Incidentally, this episode focused on an investing option (green bonds for retail investors), as well as Tesla Model S service screens and Ontario EV rebates. Below, you can listen to the episode and/or read Matthew’s summary.
If you are just discovering us, you can subscribe to Cleantech Talk on iTunes or SoundCloud, and you can download the current episode here or watch it in the embedded player below. Matthew’s helpful show notes are below the player.
While Green Bond market is flourishing — with more than US$60 billion in green bonds having now been issued — they generally haven’t been accessible to individuals (“retail investors”) who might be fortunate enough to have saved enough to put their cash where their conscience is. Most green bonds have only been made available to institutional investors, a fancy name for the kinds of financial institutions who nearly collapsed the world economy in 2008.
That’s why we thought CoPower’s recent launch of a green bond for regular Canadians was newsworthy. The organization had aimed to raise a modest $300,000 from individuals committing a minimum of $5000 each, to pay for two rooftop solar arrays (which qualified for a feed-in tariff) and an energy efficiency project, all three of which were built in advance. They reached their goal in late February, and are looking to replicate that success in future projects.
In past decades, administrative costs would have so high, they’d’ve made a capital raise this small, completely impractical. What made CoPower’s offering possible was that they leveraged the Kickstarter model, doing everything online. Most encouragingly, their success means other organizations should be able to do so, as well.
And it’s not just information technology that’s providing a tailwind to green bonds: interest rates are near zero in many parts of the world right now, which means it’s relatively easy for green bonds to offer competitive rates of return. (A lot more renewable energy projects should be able to generate a return of 5% per year, than 15% per year.) Of course, low interest rates help the fossil fuel sector as well — the fracking boom (bubble?) in the United States may not have happened, or may not have been as big, if drillers didn’t themselves have access to inexpensive loans from investment banks.
Thanks to a visit from a Tesla Ranger, Kyle saw “how far down the rabbit hole goes” — at least in relation to the service screens on his Model S. While Kyle emphasized how this reinforced his sense of the car as a smartphone, the hidden menus made Matthew think of the underground labyrinths in Nintendo’s original Legend of Zelda™ game. (Yes, that’s how old he is.)
While Tesla probably won’t ever divulge how much code goes into its vehicles (though as over-the-air updates add new functionality, the amount of code is probably increasing each month) it’s worth noting that today’s luxury vehicles often have more code than computer operating systems.
The Information is Beautiful blog illustrated this about six months ago, noting that Mac OS X Tiger consists of about 85 million lines of code (with Windows 10 estimated to be about the same, or smaller), the average luxury vehicle contains 100 million.
We’ll be discussing the second half of this article in the show notes for Clean Tech Talk 22, but for now, it’s worth celebrating that — while some jurisdictions have cancelled their support for plug-in electric vehicles — the government of Ontario has dug in and increased its incentives.
It also seems to be a trend that governments are reducing / withdrawing support for luxury plug-in electric vehicles. Before any Tesla fans decide to petition the province, it’s worth remembering that the Model S and X’s losses are the Model 3’s gain. Indeed, as the Model 3’s purchase incentives are winding down in the United States (on account of its predecessors’ sales success) it stands to qualify for a whopping $14,000 in purchase rebates in Ontario, depending on its official MSRP!
With luck, these measures — and similar policy supports elsewhere — will help the electric vehicle market segment ramp up volumes in the coming years, to the point where electrics no longer suffer an (appreciable) up-front purchase cost premium over their combustion cousins. The faster we move along the virtuous circle of increased volumes → reduced costs → increased volumes, the faster we can transition off fossil fuels — and in the words of Bloomberg, cause the next oil crisis!