Energy efficiency is certainly not a new topic. It could be argued in fact, that the quest to extract additional productivity out of energy has been present since humanity has learned to harness it. What is relatively new are some of the environmental and social drivers that have compelled society to pursue more and deeper energy efficiency – especially in the context of the built environment.
And it is this drive for “more and deeper” that is prompting policy makers, NGOs, financial institutions, and other market actors to develop finance mechanisms to facilitate the scaling of energy efficiency market activity; mechanisms designed to help establish energy efficiency as an asset class and link energy efficiency project developers to the capital markets.
Given the fragmentation of the energy efficiency market – by building type, underlying ownership structure, geography and technology – there is no silver bullet for financing. The unique characteristics of each fragment necessitate a tailored approach, and numerous market actors have responded in kind by helping to advance solutions such as property assessed clean energy (PACE), utility on-bill repayment (OBR), and energy services agreements (ESA).
Citi is working hard with our partners and clients on the formulation of structures that will help take energy efficiency to scale. While it is still early for secondary market development, there are indications of movement in the right direction, including the establishment of WHEEL, a proposed warehouse facility and securitization for single family residential energy efficiency loans.
To learn more about options for financing commercial energy efficiency projects, make sure to attend the Energy Efficiency Finance Forum at NextEnergy on Thursday, April 18. Visit nextenergy.org/eefforum for details and registration.