IT Architecture for Renewable Energy Financing

IT architecture plays a pivotal role in today’s renewable energy sector, far beyond its function as the technical backbone of an organization. IT architecture is the structured framework that guides the development, deployment, and management of technology systems within a company. The right architecture ensures that every piece of technology - from software applications to data management systems - works together seamlessly to support a company’s overall goals.  

For renewable energy companies, innovation and sustainability are key drivers. Aligning IT architecture with business and ESG (Environmental, Social, and Governance) objectives can help ensure that IT systems are robust, scalable, and primed to support long-term growth. Let’s delve into this process.

Aligning IT Investments with business and ESG goals

To scale and compete in today’s renewables ecosystem, investing in a solid IT architecture is imperative. But what does that look like? An effective architecture will align with existing business objectives and help you reach intended outcomes, like hitting ESG goals. For a good jumping-off point, managers should answer the following questions:

1. - Will the current architecture support the future business drivers and goals? If the company plans to diversify its assets, expand geographically, or integrate vertically, the IT infrastructure needs to be flexible enough to support these changes.
2. - What are the technology principles? These could include flexibility, scalability, security, and/or interoperability.
3. - Are they supporting business principles, such as growth by acquisition or cash agile management?

An optimal IT architecture should provide forward-thinking and comprehensive solutions across the entirety of the business, which means moving beyond only users and addressing the needs and concerns of all stakeholders.

Designing IT Architectures That Will Grow With The Business

When fleshing out an IT strategy, we often think of the end-users, such as the finance analysts or project investors, since they so often interact directly with these systems. Yet when determining an optimal IT architecture, it’s important to capture the needs and concerns of all stakeholders. This ensures the IT architecture is comprehensive, adaptable, and aligned with the company’s broader goals. A stakeholder-based approach can lead to efficient systems that support long-term renewable energy financing projects.

Software systems are not just used. They need to be built, tested, operated, repaired, upgraded, and invested in. An optimal IT architecture should:

1. Capture Stakeholder Needs: Determining an optimal architecture requires adequately capturing stakeholders' needs.
2. Address Stakeholder Concerns: A good architecture successfully addresses the concerns of its stakeholders, and when those concerns conflict, it balances them in a way that is acceptable to them.
3. Communicate Effectively: A good architectural description effectively and consistently communicates the key aspects of the architecture to the appropriate stakeholders.

Optimizing IT Systems - From Point Solution to A Modern Platform Organization

Traditionally, most renewable energy project companies have focused on acquiring off-the-shelf or point software solutions and relying on vendors or integrators to tailor them to their needs.

Some of the most common software solutions we have seen are:

• - Accounting/ERP (Enterprise Resource Planning): NetSuite, Dynamics 365, Xero, and Sage
• - Account management and CRM: Salesforce and HubSpot
• - Project management: Monday.com and Microsoft Projects
• - Payment: Stripe, Great America, and GoCardless
• - FP&A and project finance modeling: Excel

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While these solutions can be adequate for standard business operations, they generally fall short in areas requiring unique, specialized capabilities such as origination or portfolio management.

The issue we have seen is that most core systems have been customized to the point of failure. To address this issue, some companies created their own integrations and cloud platforms. But as their business grows, these ad hoc stitches generally break, causing discrepancies between accounting, invoicing, payments, and contracts, leading to time-consuming and error-prone financial operations.

There are many moving parts in renewable energy project finance operations. In addition to these core systems, some renewable energy companies also use specialized software solutions depending on their business model and asset types:

• - Technical asset management: Omnidian, Radian Generation, Power Factors, WattWatchers, and GreenPowerMonitor
• - Demand response and grid services: Autogrid, CPower, Leap, and SwitchDin
• - Project design and feasibility study: EnergyTool Base, Aurora Solar, OpenSolar, Orkestra, and GridCog

As project finance teams deal with larger volumes of data and more diverse data types and sources, having an IT system that ties everything together is mission-critical. It streamlines processes and leads to better decision-making, from selecting the right ERP system to setting up the right data platform for asset and portfolio management.

Perl Street’s Process

At Perl Street, our mission is to increase your agility and capacity while reducing risk and busy work - all while staying laser-focused on your business’s unique challenges. We view the system architecture as a collection of modular capabilities rather than a single, unified structure. In addition, business requirements should dictate the choice of architectural components rather than the other way around.

After working with several national and global energy companies, we developed a framework to ensure that your IT systems aren’t just optimized for today’s needs but are also built to adapt and thrive as your business evolves. By aligning our solutions with your broader business objectives, Perl Street helps you lay the groundwork for long-term success in the renewable energy sector.

In the fast-paced world of renewable energy, your IT architecture is more than just a technical framework—it’s a strategic tool that can drive business success and sustainability. Perl Street’s solutions can help you align IT investments with your business and ESG goals. With robust and scalable solutions, your renewable energy business will be primed for short-term operations while paving the way for long-term success.

Ready to elevate your IT architecture? Get in touch with Perl Street

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