EE Financing

Financing Energy Efficiency

LBNL’s Electricity Markets and Policy Group provides independent, interdisciplinary analysis of critical issues in energy efficiency financing. Our work in this area includes:

Financing Energy Efficiency

Role of Financing in Driving Energy Efficiency

Easy access to attractive financing can help overcome a common barrier to energy efficiency: the high first cost of more efficient products. Financing is also a way to maximize the impact of public funding for energy efficiency by attracting private institutional capital and encouraging substantial cost contributions from households, businesses and other energy users. LBNL tracks and documents the latest trends in energy efficiency financing and provides analysis of what is working and how to overcome challenges.

Related publications

  • For information on Driving Demand for Home Energy Improvements (2010), which explores strategies that can be used to increase the adoption of comprehensive home energy upgrades, click here.
  • For information on Delivering Energy Efficiency to Middle Income Households (2011), which explores strategies that can be used to increase the adoption of home energy upgrades in the middle income, residential market, click here.

Standardization and Data
Private capital providers prefer to invest in assets that have standard product definitions, terms, structures, protocols, and ample track records. A complete and credible dataset documenting the performance of energy efficiency financing products is critical to engaging investors and attracting more capital into the energy efficiency market. LBNL’s research focuses on standardization of financing products, current data collection practices, recommendations to improve data collection, and the potential to develop energy efficiency loans as a unique asset class.

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Program and Product Design
Efficiency financing programs and products have many structures, with different goals and different scopes. The last several years have seen a dramatic growth in interest, in activity, and in the numbers and diversity of players in the efficiency financing area. LBNL works to extract the lessons learned from this collective experience so that new and emerging programs can incorporate these principles into their program and product designs. 

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Existing and Emerging Financing Tools
An assortment of existing financing tools, strategies, and incentives can be applied to energy efficiency. These tools may be underutilized due to lack of stakeholder awareness, information gaps, or regulatory barriers. In addition, a range of innovative private and public financing models are emerging (e.g., PACE, on-bill financing, Green Banks). LBNL analyzes existing and emerging financing tools to help policymakers, regulators and energy efficiency program administrators understand the important features of these tools, their relevance in the efficiency financing area, and their reach and impact.

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