Find financing that fits your needs

Answer the questions below about your organization, project, and preferences, then we’ll match you to financing options that might be a good fit. If you have multiple projects in mind, pick a representative project and fill out your answers accordingly. Mouse over the “?” tooltips for guidance. You don't need to answer all the questions, so feel free to leave some responses blank if you are unsure.

Select the sector that best defines your organization. Some financing options can work in any sector, while some are best suited for specific sectors.
Estimate the total cost (in $) of your project. This should include equipment, labor, materials, and any other costs that will need to be funded as part of installation. You do not need to be exact—a general estimate is fine.
Indicate whether you own or lease the space where the project is located.

Certain financing options work better in buildings that you own, but many will also work in leased space.
Some financing mechanisms will show up as a liability on your balance sheet (e.g. loans, capital leases), whereas others are typically considered "off balance sheet" and will not appear on your balance sheet (e.g. ESAs). Note that there are no cut-and-dried rules for balance sheet treatment and the final decision on how to treat any given project rests with your accounting team.

Reasons your organization may want off-balance sheet treatment include:
- You already have significant debt on your balance sheet and do not wish to take on more to avoid affecting your credit
- You have limits on the amount of debt you can take on, either in absolute terms or in relation to other financial metrics (e.g. debt service capacity ratio limits).
- On-balance sheet debt requires higher-level approval within your organization

Reasons your organization may prefer on-balance sheet financing include:
- You wish to book the installed equipment as an asset on your balance sheet and are willing to accept the corresponding liability to do so
- You wish to claim depreciation benefits on the asset

Reasons to select "not important" include:
- You are indifferent to balance sheet treatment and wish to get the best deal available

The information in the Navigator summarizes typical practices in the market, as reported in industry research. Nothing in the Navigator constitutes accounting or legal advice from the Department of Energy or any other party.
Some financing mechanisms (e.g. ESAs and EPCs) include a performance guarantee, giving you some protection that your payments to the provider will not exceed your savings. Other financing mechanisms (e.g. loans and leases) simply charge you a fixed payment, so that you bear the risk of project performance. The tradeoff is that fixed payment mechanisms can sometimes be cheaper.

If you do not wish to bear the risk of project performance or you have stakeholders in your organization who require guaranteed savings, select “important.” If your organization is confident in the return on investment from the project and you are open to fixed payments, select “not important.”

Bear in mind that if the financing option you use does not automatically include a performance guarantee, performance insurance can usually be purchased separately.
Energy efficiency equipment can sometimes be depreciated on your balance sheet, allowing you to claim an income tax deduction. Some financing mechanisms allow you to claim depreciation on the equipment being financed, whereas others only allow the lender or financing provider to claim depreciation.

NOTE: You cannot claim depreciation on an asset if it is off-balance sheet. If you selected "off-balance sheet" in the question above, we recommend answering "not important" here.
Under some financing mechanisms, the provider will analyze how your energy costs change to verify the amount of savings achieved from the project (known as measurement and verification, or M&V). This is typically done if the provider is offering a performance guarantee (e.g. an EPC) or plans to adjust your payments to reflect actual savings (e.g. ESA). Other financing mechanisms do not include M&V, so if you wish to measure your savings, you will need to conduct M&V separately from the financing contract.
The term of a financing contract (i.e. the time over which you are obligated to repay the provider) can vary from a few years to 20+ years.

Advantages of shorter-term financing are that you end your obligation to the provider faster and, in cases where you will continue to own and operate the equipment after the financing is repaid, you can enjoy 100% of the cost-savings from the project for the remainder of its useful life.

Advantages of longer-term financing are that it spreads your payments over a longer period of time and, in many cases, results in a lower annual or monthly payment, making the project more cashflow positive for you in the short run.
Financing contracts vary in complexity, from loan agreements made directly between a customer and a lender that are only a few pages long, to comprehensive performance contracts that involve multiple parties and can span dozens or hundreds of pages. The tradeoff is that, while simpler contracts are easier to understand and negotiate, more complicated contracts are sometimes necessary to provide more value to you (e.g. performance guarantees, lower interest rates).

If your organization is sensitive to contract complexity, select "Important," and if complexity must be kept at an absolute minimum, select "Required." If you are willing to tolerate some complexity to get the best deal possible, select "Not Important."
Indicate when you will need financing. Some financing mechanisms take longer to negotiate and close. Selecting "ASAP" or "Soon" will tailor your results to those financing options that tend to close faster, but it may rule out options that are a better fit but take longer to close.