Explore Financing Options
Energy Efficiency Finance 101
Energy efficiency is a powerful way to reduce operating costs, cut greenhouse gas emissions, and improve the reliability of buildings. However, upfront costs are a major barrier to getting energy efficiency projects done. Many organizations don’t have the capital available to pay for the equipment, installation, and servicing of energy efficiency upgrades out of pocket. Even those with plentiful cash may prefer to spend it on their core operations rather than efficiency.
That’s where financing comes in. In the broadest terms, “financing” simply means using someone else’s capital to fund projects in your facilities and then paying it back over time. In practice, there are a variety of strategies and structures to accomplish this, each with their own pros, cons, and nuances. These are often called financing products, financing mechanisms, or, as we call them in the Navigator, financing options. They range from simple options like loans and leases, to more specialized options designed to overcome specific challenges, such as property assessed clean energy (PACE) or energy services agreements (ESAs).
As demand for energy efficiency financing has grown, the diversity of financing options available in the marketplace—and the number of financing companies that provide them—has grown as well. This means that there is probably a financing option in the market that will fit your needs. But it also means that most building owners, executives, and other decision-makers don’t have time to understand and compare all of the available options.
That’s why we built the Navigator: to help you learn about the options, decide which might be a good fit, and begin connecting with financing providers within a few minutes.
Ready to take the next step? We recommend you start by briefly reviewing the information below. You can click on any financing option button for a simple fact sheet about that option. After that, answer a few questions that will help you find financing options and providers that are right for your organization. Or, if you want to skip ahead, you can begin connecting with Financial Allies right away.
EFFICIENCY FINANCING LANDSCAPE
The diagram below summarizes the energy efficiency financing options available in the market. “Traditional” options are commonly used to finance efficiency projects in addition to other types of goods and services, and “specialized” options are specifically designed for efficiency projects. Organizations can also fund projects internally without seeking third-party financing. For a more detailed typology of financing options, see LBNL's "Current Practices in Efficiency Financing" report.
- Energy Efficiency Financing
- Traditional Financing
- Specialized Financing
- Property Assessed Clean Energy (PACE)
- Savings-Backed Arrangements
- Traditional Financing
BROWSE FINANCING OPTIONS
Here you can sort the available financing options according to a variety of attributes such as balance sheet treatment, contract complexity, and typical close time. Simply select an attribute from the drop-down menu to sort accordingly.