Sidebar Navigation. Elements of performance: factors by MSCI Factors are the building blocks of many portfolios —the elements capable of turning data points into actionable insights. About factors by MSCI In the realm of investing, a factor is any characteristic that can explain the risk and return performance of an asset. Factor Timeline. Academic Factor Milestones. Creation of the multi-factor Barra risk models. Suggested that Macroeconomic factors can systematically affect stock market returns. First generation Barra fixed income factor model launched. Published first research on Momentum factor.
RiskMetrics methodology was launched by J. Fourth generation Barra fixed income factor models launched. Factor Groups. Factor groups Factors have historically been identified as critical drivers of portfolio risk and return and can now be used to better inform the investment process. Factor investing parallax. Factor indexes. Factor indexes MSCI Factor Indexes are designed to help institutional investors seeking to capture the excess return of factors in a cost-effective and transparent manner. Learn more. MSCI FaCS on funds Investors who use factors to help construct and manage portfolios need a common standard in order analyze funds and conduct due diligence.
Factor analytics content seperator. Factor Analytics. Factor analytics Whether building portfolios, implementing strategies, or measuring performance, MSCI helps clients identify and solve for implementing factors throughout the investment process. Incorporating factor strategies in portfolio construction can help: Managers differentiate their strategies Drive performance Understand factor exposures Manage risk and unintended bets Avoid risk of crowded trades Learn more about MSCI Analytics.
Factor analytics quote. By Barra now part of MSCI had created sophisticated models that predicted stock returns based on many different risk factors. MSCI Graphics. MSCI factor investing webinar series. Examining recent market events through factors. Factor block seperator. Additional resources.
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Unencumbered by legacy development, entrenched interests, and red tape, greenfield SRCs can build a model city that showcases and tests the latest technology. Solar and wind power are integral to their plans. NEOM can do the same at a much greater scale. With so much freedom, the challenge for greenfield SRCs is to narrow the options down to a combination worth exploring. The expansion has resulted in new ways for community energy to serve off-grid and on-grid areas. In off-grid areas, it can now provide electrification at price and performance parity with other options.
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In on-grid areas, its ability to power communities independently of the grid fulfills resilience and self-determination goals. In both situations, many countries have embraced community energy as it democratizes access to the benefits of renewables deployment. In off-grid areas, community renewable energy can provide optimal electrification. Community energy in off-grid areas can be defined as community-owned partnerships that enable electrification and reinvest profits in the community.
Projects mostly consist of solar-plus-storage microgrids in rural areas with sufficient population density. The main driver for solar-powered microgrids is their cost-effectiveness relative to fuel-powered microgrids, a grid extension, kerosene lamps, or diesel generators. Renewable microgrids are also generally more reliable than the grids in developing countries. The advantage of community energy over other electrification models is strong community buy-in and empowerment.
The same rationale applies to many island markets and remote areas in developed countries.
Embracing the BRI ecosystem in 2018
On the flipside, some communities in developed countries are pursuing community renewable energy as a means to go off grid. This is notably the case in Australia, where community energy grew strongly in In areas with developed electric grids, community energy provides shared ownership or access to wind and solar resources. Energy cooperatives are the most common structures and involve shared citizen ownership and operation of renewable resources. Germany is the global energy cooperative leader: Over two-fifths of renewable energy installed in the country last year was cooperative-owned, and Germany recently implemented new rules to level the playing field for energy cooperatives to participate in power auctions.
Almost half of US households and businesses cannot host a solar system for lack of suitable or accessible roof space; community energy enables them to buy electricity from a shared solar project and receive a credit on their utility bill. Third-party providers administer two-thirds of community solar capacity, primarily to commercial customers and mostly in Colorado, Minnesota, and Massachusetts, with utilities accounting for the rest and primarily serving residential customers.
This is the case in Japan, which has a national resilience plan supportive of community energy. While cities and communities are increasingly relevant actors in the deployment of solar and wind power in developed markets, the national level is most relevant in emerging markets. The solar and wind industries and markets started and matured in the developed world defined as the 33 high-income OECD members , but their center of gravity has shifted to emerging markets all nondeveloped countries. In , emerging markets surpassed the developed world in onshore wind growth, and in , solar PV growth; in , they accounted for 63 percent of global new investment in renewable energy, widening the investment gap with developed countries to a record high.
Emerging markets have helped bring down the cost of renewables, allowing them to leapfrog developed countries in the deployment of renewables, pursue less carbon-intensive development, and innovate in ways that also benefit the developed world. As the global leader, China is propelling the ascent of emerging markets in renewable energy growth. China recorded the largest solar and wind growth and total installed capacities in and is the only market above GW for both sources.
China alone accounted for over half of new solar capacity installations as well as two-thirds of global solar PV panel production in Eight of the top ten solar PV suppliers are Chinese, and the top three Chinese wind companies together account for the largest wind market share. Even without China, emerging markets are driving renewable energy growth and have the greatest potential to drive future growth.
For the most marginalized unelectrified populations in low-density areas, pay-as-you-go solar home systems are often the best electrification option. The International Energy Agency estimates that in the next two decades, most people without electricity will gain access through decentralized solar PV systems and microgrids.
Emerging markets are incubating innovation. Developed countries have benefitted from market and product designs that initially took off in emerging countries. For example, renewable energy auctions are a trend that emerging markets embraced first and that has brought steep declines in renewable prices across the globe.
For example, microgrids designed to electrify off-grid areas in developing countries have found applications in remote mines in developed countries. More broadly, corporations play a growing role in facilitating transfers between developed and developing countries that promote renewable energy growth. Corporations are procuring renewable energy in new ways, with a growing number of industry sectors involved.
Power purchase agreements PPAs are becoming the preferred tool as corporations become increasingly concerned about the quality of their procurement: The gold standard is additionality, that is, assurance that the procurement creates measurable, additional renewables capacity. PPAs provide the greatest additionality, but are primarily accessible to large corporations. Aggregation is starting to expand access to smaller players.
The largest corporations are also requiring and helping smaller companies to procure renewables as they have encompassed supply chains in their renewable targets. PPAs are the most rapidly growing corporate procurement tool. Corporations sourced terawatt hours TWh of renewables globally in through self-generation or procurement.
EACs, the most widely used procurement tool, are available in 57 countries and are easy to procure. They allow companies to certify compliance with government renewable requirements or voluntary targets. However, they do not capture the full cost benefit of renewables and may not always provide additionality. UGPs are available in 39 countries, mostly in Europe, but are the least used and least transparent tool. They are often tied to EACs and share the same drawbacks. PPAs are available in 35 countries and rapidly spreading.
In , corporations signed a record 5.
However, they are more difficult for smaller players to access. They are a preferred tool for companies with electricity costs exceeding 15 percent of operational expenditures. All three tools are available in North America and most European countries. These developed countries continue to be the leading corporate procurement markets, and information technology remains the leading sector. However, companies in other sectors are increasing renewable procurement as well, and emerging markets are making it easier.
Emerging markets India and Mexico also offer a full toolkit and are seeing growing multinational and national corporate procurement. A corporate compound effect can be achieved through aggregation and supply chains. Two-thirds of Fortune companies have set renewable energy targets and are leading global corporate procurement through PPAs.
Many of them have joined RE, a group of companies as of September that have committed to sourcing percent of their electricity from renewables. Through aggregation, smaller players can form partnerships to jointly execute a utility-scale PPA. Some project developers are now meeting these smaller companies halfway by aggregating a series of PPAs. The scope of corporate procurement is also growing through supply chains.
A third of RE companies have expanded the percent renewables target to encompass their supply chain. This larger scope has the additional benefit of bringing multinational corporate expertise and capital to the renewables sector in emerging markets. Solar and wind power recently crossed a new threshold, moving from mainstream to preferred energy sources across much of the globe. As they reach price and performance parity with conventional sources, demonstrate their ability to enhance grids, and become increasingly competitive via new technologies, deployment obstacles and ceilings are dissolving.
Already among the cheapest energy sources globally, solar and wind have much further to go: The enabling trends have not even run their full course yet. Costs are continuing to fall, and successful integration is proceeding apace, undergirded by new technologies that are bringing even greater efficiencies and capabilities. Meanwhile, the demand for renewables is inexorably growing. Solar and wind power now come closest to meeting three energy consumer priorities: reliability, affordability, and environmental responsibility.
In leading renewable markets such as Denmark, supranational, national, and local community interests are aligned on these goals. In others, such as the United States and Australia, where the national leadership is retreating on decarbonization efforts, cities, communities, and corporations have become the most relevant actors. They have stepped up to fill the vacuum and demand has continued to grow.
The case for renewables has never been stronger. The authors would like to thank Suzanna Sanborn and Deepak Vasantlal Shah for their contributions to this article. Cover image by: Livia Cives. It enables an apples-to-apples cost comparison of different energy resources. View in article. Lazard, Levelized cost of energy analysis—version US Department of Energy, wind technologies market report , REN21, Renewables Global status report , US Department of Energy, wind technologies market report. The worst?
Waiting to get paid. Invoice factoring lets businesses sell their invoices to lenders factors for the sum of their outstanding balances. You essentially borrow against your outstanding invoices in order to get your money faster — since the factor provides the cash instead of the customer. This creates more financial flexibility , all without a lengthy term-loan application process. The factor is then responsible for the collections process, typically by working directly with the clients who are paying for services. Once the factor is paid, the business receives the remainder of the balance — minus interest and fees.
Here are some examples of what businesses can do with the money they receive through invoice factoring:. Keeping your cash flow steady is great. But, sometimes, you need a little extra help with paying for bigger expenses as well, such as payroll or emergency repairs. Invoice factoring is usually a speedier process than obtaining a business loan or business line of credit. Those loans typically require collateral, extensive applications, and a lag between approval and the disbursement of funds.