“That generates this demand and potential that means a more diverse set of projects can also find their way to this different set of capital,” Picarsic explains. “You can have more risk-accepting capital backing projects that carry features that might have meant they wouldn’t have been able to receive financing previously.”

The expanded capital pool is enabling a higher pace of project execution whilst spreading risk across a broader base of investors, according to Picarsic.

This allows projects that might previously have struggled to secure financing to move forward, whilst creating a more risk-adjusted investment universe.

Developers now face a complex trade-off between navigating regulatory hurdles to gain domestic content tax credits versus importing components to accelerate project timelines. Picarsic characterised this as “a new type of consideration, a new challenge” for the market.

“Developers are ultimately looking at economic return,” he says. “There’s the timeline on which they need to deliver a project and generate liquidity for their upstream capital formation.”

Many developers are currently in a “sit and wait situation” seeking maximum certainty before proceeding, though some are moving forward where the economic delta between domestic and imported components justifies faster execution.

However, Picarsic suggests the political and regulatory environment is pushing towards models that support domestic manufacturing capacity, pointing to challenges in the data centre space as an early signal of these political realities.

“There’s both leadership in US government as well as popular support on economic development, but a certain type of economic development,” he says.

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