Energy Efficiency Financing
Financing is one of several linked strategies to drive and enable customer demand for energy efficiency. Financing alone does not lead to energy savings, but it may be an effective tool for helping customers overcome the high up-front costs of a range of energy efficiency investments.
Key Focus Areas
Broad customer access to attractive capital can enable widespread adoption of energy efficiency improvements by scaling and leveraging secondary markets, reflecting a true assessment of risk, providing more liquidity, and reducing borrowing costs. SEE Action has identified four key focus areas in financing:
- Improve Data Access. Improve data collection practices and access to quality data on energy efficiency financing product performance.
- Improve Program Design. Help energy efficiency financing program administrators align program strategies with customer needs, and share lessons learned from experiments in energy efficiency financing program design.
- Support Effective Financing Tools. Explore whether novel financing tools and capital sources are more effective than conventional ones in addressing the unique barriers of energy efficiency financing.
- Clarify Regulatory Treatment of Financing. Identify how state public utility commissions are treating financing initiatives under the regulatory framework, share successful approaches.
SEE Action is currently working on several initiatives that will provide state and local entities and their partners with the tools and information they need to design and implement effective energy efficiency financing programs. These include:
- Developing a series of primers for state decision makers and financial institutions on fundamental energy efficiency financing topics, including program design and credit enhancements
- Identifying and addressing regulatory challenges that must be overcome in order for ratepayer-funded EE financing initiatives to deliver on their potential
- Reviewing existing practices for data collection for energy efficiency financing programs, and identifying high-priority needs and uses for finance program data
- Reviewing existing on-bill programs and program design choices including disconnection and meter attachment, sources of capital, underwriting criteria, and eligible measures.