FREE

Podcast Recap

What are we expecting at the Canadian Climate Investor Conference? Shawn Severson, CEO and Co-Founder of Water Tower Research, and Graham Mattison and Peter Gastreich, WTR Energy Transition & Sustainable Investing analysts, discuss their expectations on the latest episodes of the Water Tower Hour and WTR Sustainable Investing podcasts. The team also discussed the current trends and outlooks for voluntary carbon markets and the US residential solar industry. Those interested can listen to the Water Tower Hour episode on Apple Podcasts, Spotify, and the WTR Sustainable Investing episode. Links in our full report accessible below. Water Tower Research is a sponsor of the Canadian Climate Investor Conference, which will take place June 25, 2024, in Toronto, Canada. The conference will be hosted by the Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) and brings together growth-oriented sustainability and energy transition-related companies and investors to share ideas and look to accelerate the deployment of capital needed to build a more sustainable future. Severson, who is also WTR’s Head of Energy Transition & Sustainable Investing Research, discussed the panel he will be hosting on Structuring Financing for a Sustainable Future. He said that innovative financing can help to accelerate sustainability projects. The royalty approach to investing in renewable industries allows capital to be recycled across projects, while securing ongoing revenue streams. Severson explained how one of the panelist companies RE Royalties (see recent WTR fireside chat) applies this strategy in areas like small-scale solar, wind, and EV charging. Mattison discussed voluntary carbon markets and what’s driving growth. Voluntary carbon markets allow companies to purchase carbon credits to offset their CO2 emissions and meet carbon neutrality goals. Companies like Base Carbon (see recent WTR Management Series) help underwrite and develop emissions-reduction projects. The aim is to earn the resulting carbon credits, have them certified, and then sell the credits to their clients. Clients include companies that are unable to fully offset carbon emissions with changes to their own business operations. In response to shareholder demand, many companies have been accelerating their emissions goals out of concern that the cost of carbon credits will rise in the future. Gastreich discussed why residential solar installations recently declined but also why growth should resume. Rising interest rates have affected affordability. Moreover, regulatory changes in California led to a large drop in installations in the state, and this fed into weak national installation statistics. He expects growth in installations will resume as rising grid electricity costs prompt more residents to switch. The cost of grid electricity is expected to be on a long-term structural uptrend, driven by electrification, demand from AI and data centers, and by costly upgrades needed for ageing US power infrastructure. Spruce Power was mentioned as a leading owner-operator in residential solar (see recent WTR Management Series).