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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 percent of total U.S. energy. So, it’s no surprise that optimizing building systems is on the rise.

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 percent of total U.S. energy. So, it’s no surprise that optimizing building systems is on the rise.

But commercial building 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 operators have to first understand the systems and then identify funding that best works for their organization.

Fortunately, financing options and tools help make this process easier. Energy efficiency and renewable energy financing have 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 have also opened opportunities for increased investment in energy efficiency.

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 U.S. 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 managers, etc. to connect with market-leading financing organizations — including banks and lenders — that have committed to funding energy-efficiency projects. Users can easily compare the various options offered by each Financial Ally and move forward with a specific financing solution for their energy-efficiency projects.

EDF’s Supply Chain Solutions Center is hosting an October 19 webinar on scaling energy efficiency and how it can benefit your company. An expert from the Department of Energy’s Better Buildings initiative will lead the conversation and present a success story from Boston Properties.