Authors :
Mosunmola Omowunmi Ilesanmi; Onum Friday Okoh; Onuh Matthew Ijiga
Volume/Issue :
Volume 10 - 2025, Issue 10 - October
Google Scholar :
https://tinyurl.com/39jmtmwz
Scribd :
https://tinyurl.com/vx2rnbtv
DOI :
https://doi.org/10.38124/ijisrt/25oct1443
Note : A published paper may take 4-5 working days from the publication date to appear in PlumX Metrics, Semantic Scholar, and ResearchGate.
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Abstract :
This study explores financial risk modeling for hybrid renewable energy portfolios in the context of evolving U.S.
regulatory and tax equity structures. As renewable integration intensifies, investors face mounting uncertainties stemming
from fluctuating policy incentives, dynamic market conditions, and variable generation outputs from solar, wind, and
battery storage assets. The paper examines how shifts in federal tax credits, state-level renewable standards, and
decarbonization mandates reshape the financial viability and capital structuring of hybrid portfolios. Findings indicate that
regulatory volatility significantly alters project cash flows, risk-return profiles, and the attractiveness of tax equity
partnerships, especially under changing Investment Tax Credit (ITC) and Production Tax Credit (PTC) regimes. The study
further reveals that portfolios optimized for diversification between intermittent and dispatchable assets exhibit improved
financial resilience against market and policy shocks. Investors who integrate adaptive financial risk modeling and scenario-
based performance analytics demonstrate higher expected EBITDA stability and enhanced asset valuation. Overall, the
research underscores the importance of aligning financial strategies with evolving regulatory landscapes to safeguard long-
term investment performance. It recommends that policymakers maintain consistency in tax equity provisions to foster
investor confidence and accelerate the U.S. energy transition toward a low-carbon economy.
Keywords :
Financial Risk Modeling, Hybrid Renewable Energy, Tax Equity, Regulatory Policy, Investment Resilience.
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This study explores financial risk modeling for hybrid renewable energy portfolios in the context of evolving U.S.
regulatory and tax equity structures. As renewable integration intensifies, investors face mounting uncertainties stemming
from fluctuating policy incentives, dynamic market conditions, and variable generation outputs from solar, wind, and
battery storage assets. The paper examines how shifts in federal tax credits, state-level renewable standards, and
decarbonization mandates reshape the financial viability and capital structuring of hybrid portfolios. Findings indicate that
regulatory volatility significantly alters project cash flows, risk-return profiles, and the attractiveness of tax equity
partnerships, especially under changing Investment Tax Credit (ITC) and Production Tax Credit (PTC) regimes. The study
further reveals that portfolios optimized for diversification between intermittent and dispatchable assets exhibit improved
financial resilience against market and policy shocks. Investors who integrate adaptive financial risk modeling and scenario-
based performance analytics demonstrate higher expected EBITDA stability and enhanced asset valuation. Overall, the
research underscores the importance of aligning financial strategies with evolving regulatory landscapes to safeguard long-
term investment performance. It recommends that policymakers maintain consistency in tax equity provisions to foster
investor confidence and accelerate the U.S. energy transition toward a low-carbon economy.
Keywords :
Financial Risk Modeling, Hybrid Renewable Energy, Tax Equity, Regulatory Policy, Investment Resilience.