Financing must grow to meet climate goals: New analysis updates the data
(ACEEE blog, 10 Dec 2020) Energy efficiency financing has grown more than 40% since 2014, reaching at least $7 billion annually, but it will need to increase significantly more to achieve urgent climate goals, according to an ACEEE analysis released today.
This financing—in addition to grants, rebates, and other incentives—will enable a robust scaling of the energy-saving investments that are vital for reducing carbon emissions, improving equity in energy affordability, and spurring job creation.
Our analysis estimates that five major types of energy efficiency programs are responsible for nearly $7 billion in annual lending:
- Commercial and Residential Property Assessed Clean Energy (C-PACE and R-PACE)
- State energy office (SEO) revolving loan funds (RLFs)
- On-bill financing (OBF), on-bill repayment (OBR), and tariffed on-bill financing (TOB)
- Utility financing programs (in which loans are not paid back on-bill)
- Energy savings performance contracting (ESPC)
This represents growth of more than 40% since 2014, the most recent year for which we have comprehensive lending volume data from these programs. Our research builds on Lawrence Berkeley National Laboratory’s 2016 technical brief Energy Efficiency Program Financing, which until now was the most recent assessment of efficiency financing. Our lending estimates are informed by data sourced from more than 120 financing programs via publicly available data and from direct outreach to program administrators, as well as market estimates for ESPC volume.