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Ahead of Trump, renewable energy companies tout fundraising success

Facing questions about their business prospects with Donald Trump in the White House, renewable energy companies have rolled out big fundraising announcements in the days leading up to the president-elect's inauguration, with one corporate official saying "the news illustrates that there is still strong interest in solar from the capital markets ... despite a Trump administration."

Residential solar developers Sunrun Inc. and Vivint Solar Inc. recently said they secured $100 million and $204 million, respectively, and CleanCapital, a financial technology company, said it plans to spend up to $300 million buying distributed solar projects through a warehouse fund it set up with Generate Capital Inc.

The latest announcement Jan. 19 came from Spruce Finance Inc., which said it has raised enough debt and tax equity to support $445 million in power purchase agreements with residential solar customers this year. In December 2016, the consumer finance company closed a more than $200 million tax equity deal with Citibank, as well as a $105.4 million follow-on loan from Silicon Valley Bank. It has also increased an existing debt facility with Bank United to $140 million.

Spruce CFO Darren Thompson said the company plans to continue raising capital this year for its residential solar and energy efficiency businesses.

"Spruce's proven record of growth, strong risk management and reliable returns has allowed us to raise capital from a variety of sources at attractive terms," Sean Coletta, managing director for renewable capital markets at Spruce, said in a news release.

Trump, who has called climate change a hoax and promised support for fossil energy companies, sent shudders through the renewable energy industry with his surprise win over Democratic rival Hillary Clinton. Fears have subsided since the election, with renewable energy executives saying a mix of falling technology costs and local economic benefits should protect the industry from political attacks.

But the renewable energy industry is still on guard for attempts to eliminate clean energy tax credits through tax reform. The incentives were extended late in 2015 as part of a deal in Congress to lift a ban on oil exports.

"[While] the credits could become a bargaining chip in a broader tax reform bill, ideological and regional differences among Republicans complicate the ease at which tax hawks could change or eliminate the credits," analysts at FBR & Co. said in a Jan. 9 note.

Alarms have also been raised over some of Trump's cabinet picks, including his choice for EPA director, Oklahoma Attorney General Scott Pruitt, who is seen as an ally of the oil and gas industries. Pruitt has fought the EPA's Clean Power Plan, a rule to limit carbon dioxide emissions from power plants.

"A firm rejection of greenhouse gas regulation could further impact the renewable energy technology industry while benefiting fossil fuel producers and electricity generators," FBR analysts said Jan. 18.

Even if the Clean Power Plan is dismantled, the EPA would still have to regulate emissions absent a finding that carbon does not endanger human health. During his confirmation hearing Jan. 18, Pruitt told the Senate Environment and Public Works Committee that the endangerment finding "is there and needs to be enforced."

Asked by Sen. Bernie Sanders, I-Vt., whether he believes the country needs to transition away from fossil fuels in order to fight climate change, Pruitt said the EPA director "has a very important role to perform in regulating CO2."