Fund Provides Energy Savings Contracts for Small, Medium Projects
A new financial tool from the efficiency-services financer Metrus Energy and CalCEF, an organization focused on accelerating clean energy technologies, will provide financing for small- and medium-sized businesses to make energy-efficiency improvements with no upfront costs.
The Efficiency Resource Fund is targeted for such organizations as manufacturers, schools, churches and clinics throughout the United States and is now accepting customer applications from facility owners who have efficiency retrofit projects that cost less than $1 million.
The Efficiency Resource Fund signs an Efficiency Services Agreement (ESA) for up to 10 years with a building owner and then hires contractors to design, install, measure and maintain energy-saving improvements. As a result, the customer sees a reduction in its total utility bill. The Fund recoups its investment by billing customers for their realized efficiency gains. Since the useful life of the energy efficiency equipment continues beyond the life of the ESA, customers continue to save for years to come.
The Fund will sell efficiency as a service to building owners and provide tax-exempt returns to private foundations, pension funds, and other community-based financial institutions. According to Metrus Energy, the Fund is an attractive investment for pension funds of the construction trades because it garners a return on investment while also generating new local construction jobs that will increase pension contributions. Recently, Thomas DiNapoli, New York State Comptroller and trustee of the New York State Common Retirement Fund, urged its portfolio companies to increase investments in energy efficiency and renewable energy.
However, a new study from the non-profit Climate Policy Initiative (CPI) finds significant barriers to increases in institutional investment in renewable energy.
As for the Efficiency Resource Fund, CalCEF’s nonprofit division has supported the development of the financing mechanism because of its potential for advancing green buildings, green jobs, emissions reductions, and cost savings for small and medium businesses. CalCEF expects to raise $10 million from investors by the end of the year.
Trade associations and other industry groups, like the Greater Cleveland Partnership’s Council of Smaller Enterprises, will be key channels for helping identify suitable projects and for matching them with vetted local contractors.
Metrus Energy was selected by the White House and the US Department of Energy as a financial ally for the Better Buildings Challenge for which Metrus has committed to develop over $75 million in projects under its ESA structure.
Why bring buildings online? What information can operations teams glean from real-time data that they can’t just get from the monthly data provided by utility companies? Click to learn more.
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