Frontier Forum: Fixing distributed energy's finance gap

Jun 12, 2025

In this vibrant discussion, Amanda Li, Co-founder of Banyan Infrastructure, and Rachel Halfaker from the Milken Institute tackle the urgent financial barriers hindering small-scale clean energy projects. They uncover the complexities of securing funding amidst overwhelming costs and fragmented interests. With a focus on standardization as a key solution, they explore how effective communication and collaboration can streamline investments. The conversation also touches on the transformative potential of AI in finance, pushing for innovative models to revolutionize the sector.

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ANECDOTE

Large Investors vs. Distributed Scale

Amanda Li shared her experience at the Milken Global Conference observing big investors talking "innovative" despite still focusing on large checks.
She highlighted the contrast with distributed infrastructure needing much smaller check sizes, making innovation at that scale harder.

INSIGHT

Overhead Cripples Distributed Energy

Distributed energy projects have a thousand times more overhead due to many small contracts and counterparties compared to utility-scale projects.
This creates prohibitive transaction costs despite the smaller financing amounts at distributed scale.

INSIGHT

Fragmented Ownership Challenges Finance

Distributed energy involves many diverse small-scale owners unfamiliar with finance terms, unlike single-entity utility projects.
"Death by a thousand cuts" refers to needing buy-in from many small stakeholders, complicating deal execution.

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Clean energy attracts nearly $3 trillion in investment annually, but most of that capital flows to massive utility-scale projects through the world's biggest banks and large-scale asset managers. Meanwhile, smaller distributed projects — rooftop solar, batteries, microgrids — face a structural financing challenge that Amanda Li calls "death by a thousand cuts."

As co-founder and COO of Banyan Infrastructure, Li sees this dynamic constantly. Distributed infrastructure developers are trying to secure deals for $500,000 or $1 million, but face the same transaction costs as billion-dollar projects.

"You might have a thousand times the amount of data at every single one of those stages, a thousand models, a thousand PDF documents or contracts, a thousand counterparties," Li explains. "So that's where the overhead really becomes crushing."

Rachel Halfaker, who leads the community infrastructure program at the Milken Institute, sees the same fragmentation from a different angle. Unlike utility-scale projects with a single counterparty, distributed energy involves "a hundred business owners, a hundred nonprofits, a hundred YMCAs or churches" who aren't accustomed to thinking about term sheets and risk profiles.

The solution they are pursuing? Standardization. But previous attempts have failed for specific reasons that go beyond market immaturity.

"Everyone intellectually understands and believes in the benefits of coordination and standardization," said Li. But past efforts lacked dedicated coordinators and sufficient critical mass.

The complexity of distributed energy finance makes standardization uniquely challenging. These projects often require blended capital stacks where three or more financing sources must align simultaneously. "All three things have to be in coordination in order for that deal to pencil,” said Halfaker.

This orchestration typically falls to local developers with small teams, rather than the armies of investment bankers and lawyers that structure utility-scale deals. The result is frequent near-misses where viable projects nearly fall apart due to financing complexity.

In this episode, recorded live as part of Latitude Media's Frontier Forum series, Stephen Lacey talks with Li and Halfaker about why standardization is critical for scaling distributed energy into a trillion-dollar asset class.

They explore how standardization could eventually enable securitization — the "holy grail" that would create secondary markets for distributed energy assets.

This episode was recorded live as part of Latitude Media's Frontier Forum with Banyan Infrastructure. Watch the full video here and download Banyan’s white paper on standardization here.