The economic premise behind energy efficiency — that it’s cheaper to save a unit of energy than to make one — has caught on in the US. Energy efficiency spending is up, and our energy use is declining, measured both per capita and per dollar of gross domestic product, according to government figures.
So it is not surprising to see the year begin with several energy efficiency deals in traditionally responsive markets, as well as some good proposals on how to reach more elusive customers.
Big Deals (or Small but Interesting)
Here are some of the recent deals that came across my desk.
Meanwhile, some interesting reports came out around the first of the year that offer ways for energy efficiency companies to reach new or sometimes indifferent customers.
For example, the Washington, D.C.-based Institute for Market Transformation (IMT) has advice on bringing efficiency to multi-family housing. The institute released a report in early January that promotes benchmarking of multi-family housing. Benchmarking provides data on a building’s energy use, the equivalent of a nutritional label for food. IMT points out various benefits to the approach: It leads to better crafted programs and incentives that encourage owners to make upgrades. The upgrades lead to lower tenant energy bills, create a more comfortable indoor environment, and can give owners better cash flow. In addition, during real estate transactions buyers better understand the building’s energy profile and can value the property accordingly. IMT sees $9 billion in potential energy savings from America’s multifamily buildings.
“As a general rule, greater transparency is a positive development, helping markets work better all around,” said Julia Stasch, vice president of U.S. programs at the John D. and Catherine T. MacArthur Foundation.
Meanwhile, the Connecticut Fund for the Environment (CFE) and Environment Northeast released a report, found here, on creating successful energy efficiency financing programs for residential customers.
“A well-designed residential energy efficiency financing program can help expand access to capital and smooth the way for increased program participation," said Roger Reynolds, senior attorney for CFE. "This report indicates that there are a whole host of program design elements that are essential for the success of energy efficiency financing products and, consequently, the programs as a whole."
And last, the Clean Energy and Bond Finance Initiative (CE+BFI) issued a financing model that leverages bond financing to secure low cost capital for energy efficiency and renewable energy projects.
"As the clean energy industry matures and grows, it needs to become less reliant on federal tax credits as the key source of financing," said Lew Milford, President of Clean Energy Group.
Called Industrial Development Bonds, or IDBs, they provide tax-exempt interest rates to private borrowers who meet certain public benefit requirements. Borrowers must be small- or mid-sized American manufacturers.
The paper on the IDB model is one of a series published on financing by CE+BFI. It is intended for state and local governments. See www.cebfi.org.
Elisa Wood is a long-time energy writer. Subscribe to her free Energy EfficiencyMarkets Newsletter at RealEnergyWriters.com
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