This paper is part of a series being issued to facilitate improved energy efficiency financing programs that substantially increase the implementation of energy efficiency projects in the residential and commercial sectors.
A report describing the major players, barriers, and financing strategies for each market sector.
Innovations and opportunities in energy efficiency finance
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.
This fact sheet describes in detail the efficiency-as-a-service financing solution and summarizes different models in use.
A lease is a simple financing structure that allows a customer to use energy efficiency equipment without purchasing it outright.
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.
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.
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.
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).