Financing Your Energy Efficiency Retrofit

Energy Finance Solutions 2018-02-12T12:14:51+00:00

Building owners can choose from both traditional finance options and innovative, energy finance solutions to fund their deep energy retrofits. Owners must consider the level of risk, upfront capital requirements, additional expenses they may incur, and level of project management they are willing to take on when evaluating their options.

Financing Mechanism Description Owner Execution Risk Upfront Capital Costs Ongoing Maintenance Costs Project Management Responsibility
Self-Fund/Loan Building owner utilizes its own capital and/or borrows the capital on its balance sheet to manage and implement the project. High High Owner Owner
Operating Lease Building owner rents equipment where feasible and uses own capital for the balance of the project work; at end of lease the owner can renew the lease, or purchase or return the equipment. Increasingly viewed as an on-balance sheet item. Medium Medium Shared Owner
Capital Lease Building owner leases-to-own equipment where feasible and self funds/finances the remainder of the project work. Ownership is transferred at the end of the lease term. Medium Low Owner Owner
Performance Contract Building owner works with a traditional Energy Services Company (ESCO). ESCO provides project financing; designs, builds and maintains the project; and guarantees the savings to the customer. ESCO shares in the savings. Medium High Owner ESCO
RENEW Energy Services Agreement (ESA) RENEW designs, owns and operates the retrofit. No upfront cost to owner and designed to provide option for off balance sheet treatment. Similiar to a PPA, but for efficiency. Low None RENEW-Energy-Partners RENEW-Energy-Partners
RENEW Power Purchase Agreement (PPA) For on-site clean energy (including combined heat and power). RENEW designs, owns and operates the clean energy system. The building owner purchases the clean energy from RENEW. Low None RENEW-Energy-Partners RENEW-Energy-Partners
RENEW Property-Assessed Clean Energy Agreement (PACE) Building owner finances and managed the project. Project payments are added to the tax bill. Loan is repaid by building owner via property tax. Possibility for off balance sheet treatment. Medium None Owner RENEW-Energy-Partners
RENEW Efficiency Lease Similar to an ESA but for an Owner who will operate and maintain and has no need for off-balance sheet treatment. Medium None Owner RENEW-Energy-Partners