Energy Exchange

How Policy Can Drive Progress In The Energy Efficiency Market

By Kate Zerrenner / Published: June 20, 2013

Energy efficiency is one of the fastest and most affordable ways to reduce harmful pollution. Why, then, aren’t we financing more energy efficiency upgrades?

Well, simply put, there are quite a few barriers that must be addressed and broken down before energy efficiency skyrockets. Yes, there are already many buildings that have set the bar high for others to follow, but some investor and lender hesitancies still exist that we need to overcome.

Furthermore, the efficiency market cannot create itself. And it is currently stifled, despite investors’ eagerness to take part.

The problem, as the investment community sees it, is that there is no secondary market for energy efficiency loans. In other words, the pool of loans is currently not large enough to make these investments worthwhile for institutional investors. Furthermore, there is a lack of uniform standards for energy efficiency loans, limited data on loan and project performance and an insufficient pipeline of projects. There are also challenges to bringing efficiency to scale, namely:

the split incentive—disconnect between the building owner and the residents, who actually pay the utility bill;
utility disincentives—utilities generally make money by selling more energy, not by reducing wasted energy; and
limited information available to consumers on their energy use.

Also posted in Energy Efficiency, On-bill repayment / Comments are closed

Investor Confidence Project Releases Enhanced Energy Efficiency Protocols

By EDF Blogs / Published: June 14, 2013

This blog post was written by guest blogger Matt Golden, Senior Energy Finance Consultant.

Source: City-Data.com

The EDF Investor Confidence Project (ICP) is a multi-year initiative to help spur growth in the commercial energy efficiency retrofit market by reducing transaction costs and engineering overhead, and increasing the reliability and consistency of savings. EDF has worked with a cross-functional team of industry experts to assemble existing technical standards and best practices into a straightforward Energy Performance Protocol (EPP) that defines a standard investment quality energy efficiency project to enable deal-flow and investment.

In November of 2012, we released the initial version of the Energy Performance Protocol for Large Commercial (EPP-LC). We received encouraging reviews from industry allies and many industry leaders have committed to join our growing ICP Ally program, a broad based network of organizations that helps us develop, test, and implement the ICP Protocols.

New Release: Large Commercial – Version 1.1

Building on our initial success and market feedback, ICP is now releasing a new and updated version 1.1 of the EPP-LC, which incorporates a wide array of important improvements that will streamline the project development process and improve results.

Our ICP team is incredibly grateful to all individuals that contributed their time and energy to this process resulting in a more streamlined protocol, especially our committed team of experts who dedicated untold hours and contributed a wide array of industry, research, and public sector experience.

Read More »

Also posted in Energy Efficiency, General, On-bill repayment / Read 1 Response

Lowering The Price Of Residential Solar Starts In The Neighborhood

By EDF Blogs / Published: April 11, 2013

By: Guest Blogger Scott A Robinson, University of Texas at Austin – Energy Systems Transformation Group

Source: SolarCity

The price of solar panels has been decreasing rapidly in recent years. This decrease in price has been reflected in residential markets, with installation numbers booming. However, the total costs of the system remain high enough to discourage mainstream adoption of the technology—even in places like Texas, which have abundant solar resources.

From a customer’s viewpoint, there are two components of the cost of a solar photovoltaics (PV) system. The first is the “sticker price” of the system: the price you pay out of pocket. The second is information cost: the time you must spend researching the technology to understand if it would be a good investment overall. This is a more difficult task for PV technology than it is for a new phone, or even a new car. The complexity of assessing solar PV creates a cost barrier on top of the reported price of the system.

To better understand these costs to consumers, and what can be done to decrease them, Dr. Varun Rai and I looked at data from PV owners across the state of Texas. We wanted to better understand the drivers behind the length of time people spent researching solar PV before deciding to buy. Our paper describing the results of the research, “Effective Information Channels for Reducing Costs of Environmentally-friendly Technologies: Evidence from Residential PV Markets”, was published last month in Environmental Research Letters (ERL). Read More »

Also posted in Renewable Energy, Texas / Read 1 Response

EDF And Others Honored For New York City’s Carbon Emissions Video

By Jim Marston / Published: March 8, 2013

Source: Carbon Visuals

Last week, Environmental Defense Fund (EDF) and Carbon Visuals, a UK-based firm (brought to EDF’s attention by Power Angels) dedicated to “communicating carbon data more effectively,” were honored by American Clean Air Skies Foundation at their awards gala to commemorate videographers and web-based innovators for works that bring climate change and energy resources to mainstream media. Carbon Visuals produced a video, funded by EDF, which encapsulates, literally, New York City’s (NYC) carbon emissions in a year’s time. The video shows blue bubbles as they multiply and expand to cover NYC’s skyline over the course of an hour, day and year. It was designed to engage everyday people who use energy (which is everyone!), helping them to visualize the magnitude of carbon emissions emitted in order to better understand why we must act NOW to accelerate the transition to the clean, low-carbon energy economy we need to avoid climate catastrophe.

This visually impactful video was made possible with the support of NYC and its exemplary effort to track and reduce greenhouse gas emissions. The City of New York provided a report from September 2011, Inventory of New York City Greenhouse Gas Emissions, documenting the 54 million metric tons of carbon dioxide (CO2) – the principal contributor to man-made climate change – NYC added to the atmosphere that year. The building sector alone contributed approximately 75 percent of the emissions, with the bulk of the remainder attributed to the transportation sector. While these figures may seem irreversible, NYC and Mayor Bloomberg have made considerable strides to reduce emissions in one of the most energy-intensive cities in the world. For instance, emissions in 2010 were 12 percent less than 2005 emissions, and NYC continues to stay on track to reduce emissions by 30 percent by 2017 – a commendable target.

Also posted in Climate, Energy Efficiency, New York, On-bill repayment / Comments are closed

EDF’s Investor Confidence Project Helps Achieve The Potential Of Energy Efficiency

By EDF Blogs / Published: January 15, 2013

This blog post was written by guest blogger Matt Golden, Senior Energy Finance Consultant.

The EDF Investor Confidence Project (ICP) has been a two-year process to help standardize the commercial energy efficiency industry. Working with a wide range of project advisors, the first set of protocols designed for large commercial building projects are now available for a public beta on our website www.EEperformance.org. The goal is to simplify the process of creating an investment-quality energy efficiency project, reducing engineering-related transaction costs and increasing deal flow and savings.

We believe that the Investor Confidence Project represents a “silver buckshot” that, when combined with other efforts underway such as On-bill repayment (OBR), Commercial PACE and benchmarking programs, can help deliver a sustainable, private capital-driven market. This will help spur economic development in these challenging times and achieve the potential of energy efficiency as a clean and cost-effective climate and energy policy.

While there are many technical standards regarding how to engineer various aspects of a project, we currently lack a meta layer that creates standardization at the project level. Ultimately, a project’s performance is only as good as the sum of its parts. The ICP protocols are combinations of the existing technical standards in the market, offering clear definitions for how a project is engineered, documented and ultimately measured. In the short-run, this can greatly accelerate channels and increase volume, and, over the long-term, can lead to increased access to lower-cost capital.

The Investor Confidence Project is happy to announce (and thank) our new ICP Allies, who have committed to piloting the ICP protocols in 2013. SciEnergy, Energi, Sustainable Real Estate Solutions, Bright Power, The Association for Energy Affordability, kWhOURS, Inc., Performance Systems Development, Clean Energy Finance and Investment Authority, Rocky Mountain Institute, Institute for Market Transformation, The Centre for Building Performance and the Building Energy Retrofit Institute are moving towards adopting the ICP Energy Efficiency Performance Protocol for Large Commercial Projects as their preferred method for estimating, measuring and reporting savings for large commercial projects.

We have been experiencing a ground swell of support coming from both public programs and market players, who have been instrumental in helping us identify this critical need and develop a set of protocols that balance engineering best practices with market-based realities. While ICP initially focused on financial investors as the key customers, we are now seeing a wide variety of users, including utilities, public programs, insurers and energy service companies, in addition to equity and debt investors and of course building owners.

As we roll-out this initiative in 2013 and achieve critical mass, our focus is now on gaining real-world feedback. We are also embarking on developing two additional protocols tailored to multi-family building retrofits and smaller commercial projects. If you are interested in learning more, or getting involved, please let us know by visiting the ICP website for more details about the project and our Large Commercial protocol.

Also posted in Energy Efficiency / Comments are closed

Leveraging Data To Move Markets

By Elizabeth B. Stein / Published: September 27, 2012

Recently, I blogged here about the fact that significant improvements in the efficiency of existing buildings – a critical and potentially cost-effective part of our carbon reduction strategy – are not easy to achieve, and described how doubts about the likely success of energy upgrade projects are a barrier to “scaling up” efficiency in buildings. I also touched on EDF’s efforts to change that.

Today I’m happy to report further on some of the progress being made toward a future in which energy efficiency (EE) project originators and funders will have greater reason to expect success in energy upgrades involving existing buildings.

Last week, EDF partnered with Bloomberg New Energy Finance to host ‘Leveraging Data to Move Markets,’ a half-day discussion among government, real estate, Wall Street, real estate entrepreneurs and NGOs, with participation from the Department of Energy (DOE) and the White House Center for Environmental Quality (CEQ). The discussion focused on DOE and EDF efforts to address key data and standardization requirements to meet the needs of private capital markets to facilitate comprehensive energy efficiency projects.

It was clear based on the conversation throughout the day that investors and other market players are looking for accurate, reliable, and transparent forecasts of savings from EE projects and related loans in order to manage risk associated with investing. The lack of standards for data and for the various practices that make up the lifecycle of an EE retrofit are not only affecting the ability to rely on the savings being delivered, but also impeding the origination of projects and creating significant transaction costs to all players.

As Jonathan Powers described at the opening of the meeting, the White House’s CEQ is keenly interested in stimulating discussions among private market actors and parties in possession of data, with an eye toward how data sets can be leveraged to achieve purposes above and beyond the capabilities of the entity that collected it in the first place. The DOE is actively engaged in creating data sets with the potential to change the landscape in which energy efficiency projections are made.

Ron Herbst of Deutsche Bank observed during the day’s opening panel that “Data informs where you should hunt for opportunity.” He also noted that auditable energy performance data would be a substantial step forward, and emphasized the power of transparency to correct malfunctioning markets. Jeff Pitkin, of the New York State Energy Research and Development Authority (NYSERDA, a New York State authority with a mandate to run energy efficiency programs), seconded the need for transparency. Mr. Pitkin noted that the ability to ground projections in something that is “seen as a credible process,” and transparency with respect to the distinct track records of different market actors, would be powerful levers for building better programs and making prospective projects more attractive to property owners. Angela Ferrante of Energi, an insurance company seeking to underwrite performance risk in energy upgrade projects, similarly stressed that the variability among project proposals is itself a real barrier to efficient underwriting. Read More »

Also posted in On-bill repayment / Tagged ICP | Read 1 Response