August 8, 2014
By Chris Hummel
Just a few years ago, funding for energy efficiency projects seemed doomed. But now it’s surging back:
- Deutsche Bank has issued $104m in bonds to fund residential energy efficiency projects.
- In France, state bank Caisse de Depots et Consignations will set aside
€5bn (about $6.69bn) for energy programs with half dedicated to building efficiency and zero interest loans for homeowners.
- California-based start-up Renewable Funding recently obtained a $300m line of credit to retrofit homes for efficiency in California, Hawaii and Pennsylvania among other places.
- Connecticut’s Clean Energy and Finance Authority is working with private investors to secure up to $30m in commercial efficiency upgrades.
- New York governor Andrew Cuomo’s NY Green Bank has raised nearly $220m to spur efficiency and renewable energy projects.
At the same time, retirement funds and private equity firms are analyzing ways to create their own efficiency bond funds.
What’s driving this new surge of financing for efficiency? I see a convergence of four factors that are key to fundamental market transformations:
Energy costs have shifted from a background concern to a critical issue for a growing number of companies. Large data centers were among the early movers in efficiency since energy is often their largest expense after employees. Now agricultural companies increasingly worry about the impact of the price fluctuations of oil on their crops. Industrial customers – the sector that will be largest consumer of energy by 2020 – don’t debate carbon regulations anymore but instead plan how to meet them. For full article…