User:FelixHum/sandbox

Renewable energy finance focuses on funding projects that contribute to the devel-opment of renewable energy capacities. Given the high upfront capital costs and the comparatively low operating expenditures associated with renewable technologies, along with the urgent requirement for new energy sources to achieve net-zero emissions by mid-century, significant and cost-effective financial investment oppor-tunities and conditions are crucial success factors [2]. In order to analyse the financ-ing conditions for renewable energy technologies, researchers often use the cost of capital as the main evaluating measure. Today, Germany boasts some of the lowest cost of capitals for renewable solar and wind onshore energy worldwide. In 2021 the International Renewable Energy Agen-cy (IRENA) reported capital costs of around 1.1% and 2.4% for solar and wind on-shore [3]. This constitutes a significant decrease from previous numbers in the early 2000s, where capital costs hovered around 5.1% and 4.5% respectively [4]. This decrease in capital costs was influenced by a variety of economic and political drivers. Following the global financial crisis of 2008-2009, Germany eased the refi-nancing regulations on banks by giving out cheap loans with low interest rates in order to stimulate the economy again [5]. During this period, the industry around renewable energies also started to experience learning effects in manufacturing, project organisation as well as financing thanks to rising investment and order vol-umes. This coupled with various forms of subsidies contributed to a large reduction of the capital costs and the levelized cost of electricity (LCOE) for solar and onshore wind power [4]. As the technologies have matured and become integral parts of the existing soci-otechnical systems it is to be expected that in the future, experience effects and general interest rates will be key determinants for the cost-competitiveness of these technologies. Policies that plan on disrupting the current financial ecosystem around renewable technologies therefore require careful consideration to not endanger fu-ture progress towards the climate goals [4].