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Energy Efficiency Financing

Updated February 2021

Description

New York State utilities need to stimulate market-based approaches to energy efficiency that are more cost-effective and scalable than standard government or utility incentive programs. Traditional energy efficiency will remain; however, there is a gap in the market for business models that promote accessibility and affordability through investment, financing options, and simplified contracts. While energy efficiency financing is currently insufficient across all customer groups, there is a particular opportunity for creative solutions that serve Disadvantaged Communities. Deeper measures and broader access to energy efficiency are key to achieving all the Climate Act goals.

REV Connect is facilitating innovative ideas and business models that work in partnership with utilities to stimulate markets for energy efficiency and create valuable solutions for customers.

Persistent gaps include:

  • A missing path to finance energy efficiency investment that will help to unlock deeper measures.
  • In particular, commercial customer financing models that shift costs from upfront capital investments to ongoing operational expenses, such as energy services agreements, that have struggled to scale in the market.
  • Addressing affordability and access barriers faced by communities that bear burdens of negative public health effects, environmental pollution, and impacts of climate change and/or comprise high concentrations of low- to moderate-income (LMI) households.

Applicable models exist for renewable energy financing but have not yet scaled in energy efficiency. Ideas for partnerships with utilities to deploy analogous efficiency financing models, such as within existing utility efficiency programs and going beyond co-marketing alone, are especially valuable. Here are some illustrative examples, and we expect even more solutions could address this Innovation Opportunity:

Example solutions to address EE Financing

Utility-Specific Interests

We have not focused on utility-specific opportunities in this area, but we encourage companies to submit ideas that they feel address needs that are yet unmet by utilities’ activities.

Funding Pathways

If you have a solution in this area, you can also explore these funding pathways:

  • Utilities can act via their Energy Efficiency programs along with REV Demos.
  • The Clean Energy Fund offers various Energy Efficiency and related programs.
  • NY Green Bank’s ongoing solicitation Clean Energy Financing Arrangements seeks to help developers and financiers overcome transaction barriers to scalable and replicable clean energy projects, including energy efficiency resources.