Analysis of ROI within renewable energy as a service portfolio
Reed Findlay, Eli Goodman, John Kirkpatrick, David Madej
Prof. James Sweeney
Metrus Energy, Inc is a startup that provides flexible and scalable financial solutions for infrastructure upgrades and sustainable energy projects. Metrus provides its clients with off-balance-sheet financing solutions, project scoping, advising, and management. Metrus' customers seek out their services for a variety of reasons, including pledges to reach net-zero carbon emissions, deferred maintenance costs, and increased speed of implementing energy-saving upgrades.
The key problem facing Metrus is uncertainty about how future policies that incentivize decarbonization will affect their core business. The company wanted to understand:
- How likely is it for a federal carbon tax to take hold in the U.S.?
- What other carbon pricing systems are possible, and how might they be structured?
- How would carbon pricing affect Metrus’s current portfolio and what new opportunities would it create?
In our report, we addressed these questions and explored how Metrus can build a strategy to take advantage of future decarbonization efforts.
Solutions, techniques, and models used
We assessed Metrus’s portfolio and the impact of potential carbon pricing on 5,000+ individual upgrades across 30+ states. We performed a thorough policy analysis to determine the likelihood and structure of possible public and private carbon pricing schemes in the U.S. We used data analysis tools in R and Excel, leveraging data from Metrus and publicly available datasets. We produced summary statistics, regressions, and a sensitivity analysis to establish the baseline KPIs of Metrus’s current portfolio and analyze how they would change under various carbon pricing scenarios.
Under a hypothetical but reasonable future carbon tax scenario (a carbon tax of $25 per metric ton of CO2 applied to 100% of emissions), we found potential revenue increases of over 20% in certain states, and revenue increases of over 10% for certain products. The findings of this analysis will help guide Metrus’s long-term go-to-market and project implementation strategies.
The Metrus Energy team tied for the 2022 first place senior project, as evaluated by MS&E alumni judges.