By Matt Golden, Senior Energy Finance Consultant
Environmental Defense Fund’s Investor Confidence ProjectSM (ICP) is pleased to announce a partnership with the Los Angeles Better Buildings Challenge to help develop a more robust marketplace for energy efficiency retrofits in the city. Los Angeles has set a goal of achieving 20% energy savings across 30 million square feet of existing buildings by 2020 as part of the Better Buildings Challenge, a national leadership initiative sponsored by the U.S. Department of Energy. If achieved, it is estimated that this 20% reduction in energy costs will create over 7,000 high-quality local jobs, and avert annual carbon emissions equivalent to taking more than 18,000 cars off the road.
The LA Better Buildings Challenge will be promoting the ICP Protocols through its network of building owners and industry stakeholders to help bring even greater transparency and accountability to the energy efficiency market by introducing a system of standardization in the way commercial building retrofits are developed, funded, and managed. The ICP framework assembles best practices and existing technical standards into a set of protocols that define a clear roadmap for developing projects, determining savings estimates, and documenting and verifying results.
David Hodgins, Executive Director of the LA Better Buildings Challenge, describes how the partnership with ICP will help the project meet its goal. “The mission of the LA Better Buildings Challenge is to support our partners in achieving a minimum of 20% savings by 2020, and to get there we need to have a clear path. We are excited to partner with ICP, which offers our partners a best-practice approach to developing, underwriting, and measuring the impact of their resource efficiency projects,” he said.
With the goal of driving at least $25 million in total investment, the LA Better Buildings Challenge has developed a directory of capital providers to facilitate access to project funding options. Using the ICP protocols, EDF will work with the LA Better Buildings Challenge to increase deal flow and expand its pool of investors putting dollars to work in Los Angeles’ economy.
The ICP Protocols are designed to increase confidence in energy and financial savings among building owners, project developers, and investors, making it easier to overcome the many barriers that make it hard for projects to move from a good idea to construction. The ICP team is working with LA Better Buildings Challenge to connect local companies, building owners, and projects to local investors and our national network of Project Allies. This service will provide them with a range of relevant options, from energy service agreements and debt and equity financing, to insurance products and a diversity of software tools.
Adopting the ICP framework will save LA Better Building Challenge partners from the expensive and time-consuming process of creating and maintaining unique technical project requirements that would otherwise result in a patchwork of program requirements across California and the county, increasing transaction costs for project developers, building owners, and investors alike.
The LA Better Buildings Challenge has been extremely active in engaging the public and private sectors, as well as building owners in order to meet the target goal. Achieving a reduction of 20% in energy savings will significantly reduce operating costs for building owners (freeing up capital for more productive uses), enhance tenant comfort and productivity, and boost market competitiveness.
The LA Better Building Challenge is a great example of how the Investor Confidence Project can support the ongoing growth of an established energy efficiency program and enable deeper investments in energy efficiency. We look forward to working closely with the LA Better Buildings Challenge and a range of other program partners as we help establish a consistent national marketplace for energy efficiency investment.
This post first appeared on EDF's Energy Exchange blog