Financing Energy Efficiency

Financing Energy Efficiency

Berkeley Lab’s Electricity Markets & Policy department provides independent, interdisciplinary analysis of critical issues in energy efficiency financing.

Role of Financing in Driving Energy Efficiency

Rapidly evolving policies, programs, and markets for energy efficiency raise many questions related to financing. To what extent can financing help achieve policy objectives for energy efficiency? Is access to attractive capital (such as loans with low interest rates and long terms) a key barrier to broader uptake of efficiency measures? Can attractive financing drive demand for energy efficiency at lower cost than other strategies? And how can we best measure and evaluate the impact of energy efficiency financing offerings? EMP's research helps states, local governments, and stakeholders develop answers to these questions.

Financing Programs and Products

Clean energy financing programs come in many sizes and shapes. There has been dramatic growth in activity in this area, as well as an increase in the number and diversity of players in the efficiency financing arena, and a range of innovative private and public financing models are emerging. EMP works to extract lessons learned from program design and implementation experience to improve future practice.

Efficiency Finance Markets and Data

To drive the energy efficiency market to “scale,” more capital will be needed than that currently provided by utility customers and public sources. Private capital providers can fill this gap—for example, by packaging efficiency loans into asset-backed securities which are sold to investors. However, standard financial terms, structures, and protocols, and reliable data—particularly on the performance of efficiency loans—are necessary to facilitate broader participation by private capital. EMP provides research and analysis for financing program administrators and capital providers to advance solutions for private capital investment.

Deason, Jeff, Sean Murphy, and Greg Leventis."Customer outcomes in Pay-As-You-Save programs."2022 ACEEE Summer Study on Energy Efficiency in Buildings (2022).