Energy Efficiency Financing: Where’s The Money? 0

Amongst the problems with energy efficiency upgrades is the little issue of money. Even though the projects will ultimately save a city, business or household money over the long haul, it’s tough to get people to invest the money upfront, if they even have it to begin with.

Experts in the field often note that the right financing schemes could unlock millions and likely billions in energy savings in the coming decades. But a report from Lawrence Berkley National Laboratory, “The Limits of Financing for Energy Efficiency,” refutes that claim. It does not assert that financing doesn’t matter, but there’s a whole lot more that needs to be right than just a financing model to move the industry forward.

“If you were an economically rational robot, you’d do it,” said lead author Merrian Borgeson, a researcher in the Electricity Markets and Policy Group at Lawrence Berkeley National Laboratory. “But people aren’t like that.”

The paper primarily looked at the limits of financing in residential scenarios, but also pointed to commercial situations where easy money still doesn’t get the job done. Borgeson and her colleagues also note areas where financing could likely make an impact, such as in multi-family and municipal buildings, and some of the other elements that need to be put in place for energy efficiency upgrades to go from wonky policy sideshow to mainstream.

Let’s start with where proper financing does work. The institutional market, stable yet cash-strapped, is the most obvious, said Borgeson. “If you have a champion in city government,” she said, “then you just need some money.” That “if” is no small deal, however. Having the staff to set up a well-oiled program and then keep it running is more than most municipalities can invest in.

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