Energy Efficiency Financing
March 4th, 2010 / 0 Comments
CalCEF Innovations, the market strategy and public policy arm of the California Clean Energy Fund (CalCEF), recently announced the release of the second white paper in its Energy Efficiency (EE) series: “Energy Efficiency Paying the Way: New Financing Solutions Remove First Cost Hurdles.” The CalCEF Innovations report examines in detail various EE financing options, including pooling of individual projects, technologies and service offerings into inventive, larger and more attractive retrofit investment opportunities
Here are some of the programs highlighted:
- Clean Energy Works Program: A city-wide initiative in Portland, OR providing comprehensive financing through long-term loans and technical assistance to local homeowners.
- Property Assessed Clean Energy (PACE): Government programs, such as the highlighted Palm Desert, CA initiative, offer property owners 20-year loans for EE that are repaid through property tax assessments.
- On-bill Financing: San Diego Gas & Electric’s program is an example of the 100% financing terms for EE that small and medium-sized customers receive with loan repayments included on the regular utility bill.
- Utility Aggregated EE Deployment: Ice Energy partners with utilities to deploy large numbers of Thermal Energy Storage units under a single financing structure at no cost to customers.
- Efficiency Services Agreement: Metrus Energy offers large industrial and commercial customers a PPA-like solution to finance and implement EE projects with repayment based on a cost per avoided unit of realized energy savings.
- Managed Energy Services Agreement: Transcend Equity finances and implements EE upgrades at commercial buildings and takes responsibility for repaying a customer’s utility bill.
According to managing director Paul Frankel of CalCEF Innovations, financing of EE retrofits is an integral hurdle to overcome: “We’ve uncovered a critical gap in the EE sector, where the deployment of retrofits is not at pace with the large potential for profits—both economical and environmental—due to a perceived cost-prohibitive barrier to entry. Energy efficiency can pay back, three or four times on its investment in a relatively short time frame when strategic financing and aggregated deployment strategies are implemented.” Art Rosenfeld, PhD is a CalCEF board member and recently retired Commissioner of the California Energy Commission and Emeritus Professor of Physics and the University of California, Berkeley adds: “The work undertaken by CalCEF Innovations sheds light on reliable financing solutions that overcome the first-cost barriers to efficiency that have hindered substantial energy savings for far too long.”
Given the choice, most homeowners and commercial property owners would institute energy efficiency retrofits if there were no large upfront costs involved. To reach significant energy bill savings, though, many retrofits do require a fairly substantial upfront cost, to the detriment of the homeowner. However, the aforementioned new and creative methods can remove these upfront costs and distribute the loan over a long period of time. In addition to these programs, the White House is trying to push the Home Star Program (also commonly known as Cash for Caulkers), which would provide government rebates to homeowners who make their homes more energy-efficient by installing new windows, doors, insulation and other materials from an approved list.
Posted by Fan Ding in Commercial, Residential
