Clean Energy Finance Forum
Produced by Yale Center for Business and the Environment
by Marley Urdanick
Small energy-efficiency lenders face major obstacles including a lack of customer demand and data, a shortage of standardization metrics, regulatory hurdles, and an absence of underwriting standards, according to a report from the Small Lender Energy Efficiency Convening (SLEEC).
The SLEEC took place in October 2013 when the American Council for an Energy-Efficient Economy (ACEEE) and Energi convened a group of key stakeholders to explore the obstacles small lenders face and to identify opportunities for small and mid-size lender engagement in the energy efficiency lending market.
This event resulted in a report, “Engaging Small to Mid-Size Lenders in the Market for Energy Efficiency Investment: Lessons Learned from the ACEEE Small Lender Energy Efficiency Convening (SLEEC),” which was published in February 2014.
The private sector can unlock more than $279 billion by investing in energy-efficient buildings, with $72 billion available in the commercial sector alone, the report said.
Yet growth in the energy efficiency market throughout recent years continues to fall short of this projection. While the majority of existing growth is a result of public-sector investment, growth due to private investment remains sluggish.
Small to mid-size lenders are well-equipped to open access to this market, particularly in the small commercial sector, the report said. Energy efficiency offers an important opportunity for small and mid-size lenders to differentiate their services from those of their larger competitors and maintain their position in local markets. Smaller regional lenders have key advantages: they understand similar local projects and can connect borrowers to local resources. For full article.