Overcome first cost

Energy efficiency investments are often long-lived with relatively high upfront costs. The first cost barrier is applicable to all building stakeholders, including owners & developers, property managers, tenants, and capital providers as they evaluate technologies during new construction or retrofits.

Solution Summary

Traditional financing

  • Internal – Owners allocate capital from internal capital or operating budgets to be used for energy efficiency upgrades
  • Debt Financing – Owners borrow money from banks to pay for energy efficiency projects

Outsourcing energy efficiency

  • ESCO – An energy services company (ESCO) will assess the energy efficiency opportunity, purchase the equipment necessary to improve performance and install the equipment
  • Energy Service Agreements – Agreements are developed where third parties are paid for achieved savings at a property

Other Options

  • Lease financing – Owner leases equipment rather than purchasing to avoid upfront costs
  • On bill financing / on bill repayment – The utility or some other third-party source loans money to the owner, and the owner in turn repays that money through a charge on the utility bill
  • PACE financing – Property Assessed Clean Energy (PACE) Programs allow for local governments to provide energy efficiency financing in return for adding an assessment on the tax bill