Making large-scale energy efficiency easier (and more affordable)

Energy efficiency is a simple, quick and cost-effective method to reduce both costs and greenhouse gas (GHG) emissions. That’s why companies are scaling up their energy efficiency projects in an effort to achieve greater results. And it’s important that they do. Buildings play a considerable role in GHG emissions: Commercial buildings in particular make up roughly 20% of total U.S. energy. So it’s no surprise that optimizing building systems is on the rise.

Between 2006 and 2014, investments in commercial building energy efficiency more than doubled from seven billion to 16 billion, with projects ranging from heating and cooling, to refrigeration, energy management and more.

But commercial buildings owners and operators face barriers to implementing large energy efficiency measures. Even with the growth of incentive programs and innovative technologies, energy efficiency can be a lengthy and intensive process, especially when an entire portfolio of buildings is involved. Building owners and operates have to first understand the systems and then identify funding that best works for their organization.

Project Manager, EDF Climate Corps

Fortunately, financing options and tools help make this process easier. Energy efficiency and renewable energy financing has come a long way in recent years. While we don’t know the precise rate of growth in third-party financing, the Better Buildings Financial Allies (a network of market leaders) funded $3.2 billion in energy efficiency and renewable energy projects in 2016 alone. Building owners and operators are increasingly taking advantage of third-party capital to get projects done, with a variety of traditional and innovative financing structures available.

There have been some exciting developments recently, including the meteoric growth of Property Assessed Clean Energy (PACE) and new “efficiency as a service” and “pay for performance” models for financing projects. The entry of several major banks into the energy efficiency and renewable energy financing space and the rapid growth of green banks at both the state and local level has also opened opportunities for increased investment in energy efficiency.

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Yet even with the availability of these options, there are challenges. Building owners and operators often struggle to understand the nuances of the financing options available. This can make it difficult to overcome decision fatigue and select the best-suited choice for their needs. Vetting and selecting a financing option—each with its own set of associated pros and cons—carries very real transaction costs, which is why it’s important to make the right choice.

Luckily new tools have surfaced that do just that. The Department of Energy developed the Better Buildings Financing Navigator, which helps organizations find financing options that fit their unique needs. The Navigator serves as a way for building operators, owners, facility mangers, etc. to connect with market-leading financing companies, including banks and lenders, that have committed to funding energy efficiency projects. Users can easily compare the various options each Financial Ally offers and move forward with a specific financing solution for their energy efficiency projects.

The availability of financing structures can provide the resources and assistance necessary to encourage building owners to implement energy efficiency projects. For owners with large building portfolios, the opportunity to scale projects is enormous, resulting in the potential for huge energy and costs savings.

EDF’s Supply Chain Solutions Center is hosting a webinar on scaling energy efficiency and how it can benefit your company. An expert from the U.S. Department of Energy’s Better Buildings will lead the conversation.

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