Upgrading a chiller, installing a solar photovoltaic system, undertaking a deep whole-building retrofit—all these projects require large upfront investments and have long payback horizons even as they deliver operational savings. External funding and innovative finance may complement the use of internal capital or operating budgets to support investments. And increasingly, new metrics for value are reshaping the discussion from straight financial “return on investment” of a technology to new metrics on building asset value and achieving co-benefits such as improvements in productivity, environment, health, and resilience. Photo Credit: Michael Fleshman/Flickr
Organizations are seeking innovative financing mechanisms and models to enable energy efficiency within their building portfolio, as many cite lack of available capital as a large barrier to implementing efficiency projects. Diversey, a leading manufacturer of cleaning and hygiene products with a global reach of over 60 countries, has developed a unique approach to financing its internal...
Property-assessed clean energy (PACE) financing remains a viable model for commercial buildings in the U.S. and around the world, even though U.S. residential PACE programs are facing delays. PACE financing is an innovative funding mechanism that overcomes many of the largest barriers to energy efficiency and renewable energy retrofits, especially:
It is well known that energy efficiency retrofits of buildings provide attractive and stable financial returns through energy, water and operational cost savings over a long period of time. McKinsey estimates that $1.2 trillion in potential annual energy savings can be achieved through $520 billion of energy efficiency investments over the next decade. However, despite these...
The most commonly cited barrier to implementing energy efficiency and distributed renewable energy improvements in buildings is a lack of capital available to fund clean energy capital, meaning property owners don't have the capital budgets and can't find the financing to proceed with investments. New financing structures are emerging, however, that could break down capital barriers to...
As with all business decisions, the “build or not to build” decision depends on a cost-benefit analysis: a particular construction project or installation is executed if it is expected to generate monetary value that exceeds the price. If, on the other hand, perceived costs outweigh benefits, the project is shelved. The same basic rule applies to construction of green buildings.
Access to basic energy services is a fundamental requirement for sustainable economic and social development. The link between energy and human development is well known and emphasized by the UN Millennium Development Goals1. Energy services are critical for healthcare, sanitation, education, mobility, enterprise, and all of the elements that developing nations need to raise the standard of living...
For many property owners, owning clean energy equipment doesn’t matter. Obtaining clean energy from the equipment does. So long as the owner gets to soak up the energy from the solar system on the roof, or realize reduced operating costs from a highly efficient chilled water plant, it does not matter that the equipment belongs to someone else. A variety of third party ownership structures...