Energy Efficiency Project Financing

Energy Efficiency Project Financing

A variety of barriers can prevent the funding of energy efficiency projects, from lack of similar projects for comparing expected savings to unclear metrics for analyzing performance. Fortunately, specialized financing mechanisms are available to help overcome upfront costs and other financing barriers. Additionally, industry leaders are collaborating on data collection and research efforts to help prove the link between energy efficiency and financial performance. These resources include case studies to help prove the value of efficiency projects, information on collaborative groups, and guidance documents to explain energy efficiency financing mechanisms.

Find Financing for Your Energy Efficiency Projects: Financing Navigator
Financial Ally List

Financial Allies are actively seeking new partners to work with and can help drive energy efficiency success for commercial, multifamily, industrial, and public buildings. 

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Team up with DOE’s exceptional network of staff and technical experts to determine energy savings goals, develop innovative cost effective energy solutions, and deploy efficient technologies and market practices.

Market Solutions Research

The resources on this page are part of Better Buildings' Market Solutions efforts, through which DOE coordinates with industry leaders to overcome non-technical barriers to energy efficiency. To explore other Market Solutions resources, click the link below.

Featured Solutions

There are many ways to finance energy efficiency projects in buildings you own or occupy. The Navigator helps you cut through this complexity to secure financing that works for you. 
Customers can borrow money directly from banks or other lenders to pay for energy efficiency projects.
Under an Energy Performance Contract (EPC), an energy service company (ESCO) coordinates installation and maintenance of efficiency equipment in a customer’s facilities and is paid from the associated energy savings.
Lease Financing Fact Sheet
A lease is a simple financing structure that allows a customer to use energy efficiency equipment without purchasing it outright.
PACE Financing Fact Sheet
Commercial property-assessed clean energy (CPACE) is a financing structure in which building owners borrow money for energy efficiency or renewable energy projects and make repayments via an assessment on the their property tax bill.
On-bill financing (OBF) and repayment (OBR) are financing options in which a utility or private lender supplies capital to a customer to make energy efficiency improvements and is repaid through regular payments on an existing utility bill.
This fact sheet describes in detail the efficiency-as-a-service financing solution and summarizes different models in use.
A Power Purchase Agreement (PPA) is an arrangement in which a third-party developer installs, owns, and operates an energy system on a customer’s property. The customer then purchases the system's electric output for a predetermined period.
Internal Funding Fact Sheet
Internal funding refers to the use of an organization’s existing financial resources to pay for energy efficiency projects, rather than seeking external financing.

Other Resources

Implementation Models

Prologis, Inc., took advantage of commercial PACE financing to retrofit its headquarters at the historic Pier 1 building in San Francisco. The projects financed are projected to reduce electricity consumption by 32% and save nearly $100,000 annually.
Metrus Energy deployed multi-measure energy efficiency retrofits in BAE Systems facilities with no upfront costs using an Energy Services Agreement (ESA).
Citi used an energy services agreement to deliver efficient electricity and cooling at its London data center. The project is expected to deliver $1.1 million in annual cost savings.
The District of Columbia's Department of General Services engaged Sol Systems to develop one of the largest onsite solar energy projects in the U.S. on a 12-month timeline using a unique power purchase agreement. The project spans 35 facilities, including schools, hospitals, police facilities, and more.
The AlabamaSAVES Program acquired a participating interest in a third-party loan through its Participating Loan Program to support the redevelopment of the Mercantile National Bank Building in downtown Mobile, enabling the implementation of a suite of energy efficiency measures throughout the building that will result in significant avoided energy costs.


Commercial property-assessed clean energy (CPACE) financing is a hot topic, but it is often poorly understood. This session dove into the state of the growing CPACE industry, with perspectives from both small and large financing companies.
Energy efficiency projects in small, rural, and low-income communities have often struggled to access to low-cost capital, despite representing a significant economic opportunity. This session covered new financing approaches designed to serve these communities. Panelists discussed Community Reinvestment Act lending as well as mission-driven private sector programs that use a variety of financing mechanisms to unlock access to capital.
This session explored industry trends and panelists discussed existing and emerging "as-a-service" models.
Spoiler alert: there's no shortage of capital for the right deal. So what does a good deal look like to investors and lenders? This panel covered key requirements for successful energy efficiency borrowing from the perspective of private banks and mission investors.
This session addressed key questions to ask when looking for project financing, especially if you are a building owner, executive, or other decision-maker. We covered how to select the right financing option, find and vet providers, capture incentives, and avoid common pitfalls.
This session covered the state of the efficiency financing industry in broad strokes, targeted at a general audience. Leading experts guided us through topics including trends in both new and old financing products, key policy changes affecting the industry, and the market outlook for 2018 and beyond.

Solution at a Glance

Metrus Energy reaches efficiency-as-a-service deal to upgrade HVAC, building automation, hot water controls, and interior lighting at Jack Hebrew Academy with support from Pennsylvania's Green Energy Loan Fund.


This toolkit provides an overview of CPACE financing to help building owners, operators, and occupants improve resilience in their facilities.

Additional Information

State Incentives (DSIRE)
A comprehensive database of incentives, rebates and policies that support renewables and energy efficiency in the United States.

See Action Financing Solution and Existing Buildings Working Groups
The mission of the Financing Solutions Working Group for the State and Local Energy Efficiency Action Network (SEE Action) is to provide responsive financing instruments and mechanisms (loans, leases, and power and service agreements) that support widespread adoption of energy efficiency technologies in the United States. The working group recognizes that effective financing is a vital tool that can encourage implementation of energy efficiencies by strengthening the value proposition of investments consumers consider making in energy conservation.

Green Building Financial Consortium
Offers a free, downloadable book that details how to value and underwrite sustainable properties.

Green Revolving Funds: A guide to Implementation and Management
A white paper that helps organizations build the business case for energy efficiency by establishing a green revolving fund. The paper focuses on higher education, but most of its insights are applicable across sectors.

Energy and Financial Modeling tools
The Rocky Mountain Institute (RMI) has developed a set of tools and templates that will save time and increase the quality of energy modeling. These include the Energy Model Input Translator (EMIT), Model Manager, LCCAid, and Elements.

The RMI Retrofit Depot Guides to Managing and Identifying Opportunities for Deep Retrofits
RMI provides three guides to help enact a deep retrofit: (1) Managing Deep Retrofits, (2) Identifying Design Opportunities, and (3) Building the Business Case.

Sector Priorities

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