Overcome short payback requirements
Many businesses have internal payback requirements that an investment must meet for consideration. These payback periods may disqualify energy efficiency improvements with longer operating lives, and with significant benefits over this time. Financing solutions to overcome this barrier include outsourcing efficiency or using other financing strategies that eliminate the need for internal or debt financing.
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
- 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