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Financing Energy Efficiency & Renewable Energy
Clean Energy Now ConferenceOctober 8, 2010Flat Rock, NC
Dr. Ken MitchellU.S. Environmental Protection AgencyAtlanta, Georgia
Many (many, many) ways to finance energy projects…..
Private Equity Financing
Pro
ject F
inan
ce
Project Finance
Munic
ipal B
ond
Fin
ancin
g
Direct M
unicipal Funding
Lease Financing Rebates
Tax IncentivesRevolving Loan Funds
Grants
Loans
Why Energy Efficiency is a GREAT Thing!
A recent study by Duke University and GA Tech showed aggressive EE initiatives in the South could, by 2020:
Prevent 16% growth in energy consumption in the residential, commercial, industrial (RCI) sectors
Retire almost 25 GW of older power plants and avoid 49 GW from new plants
Generate jobs and cut utility bills Energy bills reduced by $41 billion Electricity rate increases moderated 380,000 new jobs created Grow Region’s economy by $1.23 billion
Result in significant water savings 8.6 billion gallons freshwater conserved in
2020 (56% of projected growth in cooling water needs)
20.1 billion gallons conserved water by 2030 (or 45% of projected growth)
Source: Southeast Energy Efficiency Study: Energy Efficiency in the South
Renewable energy technologies are key to creating a clean energy future for not only the nation, but the world
Constantly replenished and will not run out Southeast has abundant renewable energy resources Can have a smaller environmental impact than traditional (e.g., fossil
fuel) sources
Why Renewable Energy?
See: http://www.nrel.gov/learning/
What about “green jobs”?
DOL Bureau of Labor Statistics Definition of “Green Jobs”
Two Types of Green Jobs Produce goods and services which benefit the environment
or conserve natural resources Jobs in which workers’ duties involve making their
establishment's production processes more environmentally friendly or use fewer natural resources
Green Goods and Services Energy from Renewable Sources Energy Efficiency Pollution Reduction and Removal, Greenhouse Gas
Reduction, and Recycling and Reuse Natural Resources Conservation Environmental Compliance, Education and Training, and Public
Awareness
17%
12%
71%
Promoting EE and RE is Key for Governments
Government leaders motivate others by setting an example
Frequently, government is one of the largest local employers and property space owners
Promoting EE and RE in government can be a strongly motivating factor for citizens and businesses
Set anExample
SaveMoney
ReduceGHGs
What did a group of recently elected officials have to say about the reason for implementing local sustainability practices??
SaveMoney
Promoting Clean Energy Alternatives
Government Avenues for Promoting EE and RE
Land use planning and control
Direct services (public transportation)
Internal business practices (buildings, transportation, water/wastewater, procurement, materials management)
Community education and support
Research
Direct finance incentives and programs
Government Finance Capabilities
Acquiring capital at competitive rates and terms
Pooling/aggregating resources for public purposes
Collecting taxes and fees
Providing tax incentives, subsidized audits, rebates, loans, and grants
Some Example Options for Local Community Energy Finance Programs*(typical projects select one item from each
column)Capitalization Security Collection
MethodsTypes of Projects
Target Market
GO bonds Property - Lien with or without Priority Status
Property Tax Bill
Energy Efficiency
Residential
Private Capital Full faith and credit of issuer
Fee for Service (e.g., Utility Bill)
Renewable Energy
Commercial
EECBG Funds Installed/Funded Asset
Stand-alone Bill to Local Government
Water Efficiency
Multi-family
Private Donors Other Real Property
Third Party Servicing
Electric Vehicles
Institutional
*This list is not meant to be exhaustive, but rather to serve as an example.
Other Government Financing Programs
Revolving loan funds Initial sum of money to
establish a “bank” to fund energy efficiency, clean energy or energy conservation projects
Loan loss reserve funds or interest rate buy downs
Credit enhancement for third-party lenders
Provides partial risk coverage to lenders by providing a pool of funds they can draw from to cover default losses
Potential leverage: 10-20 times
Some EE and RE Financing Opportunities through EPA
State Revolving Loan Program for water projects (e.g., waste grease to biodiesel, energy efficiency at wastewater treatment plants)
Clean Diesel Grant program (next RFP opens November 1; http://www.southeastdiesel.org/)
Energy Star Tax incentives and rebates (www.energystar.gov)
Climate Change Showcase Community Grants (http://epa.gov/statelocalclimate/local/showcase/index.html)
Other opportunities discussed at www.epa.gov/Cleanenergy and www.epa.gov/LMOP
Combined heat and power Landfill methane outreach program Etc.
Some Key Resources to Know
EPA’s Center for Environmental Finance http://www.epa.gov/efinpage/
The Environmental Finance Center (EFC) Network http://www.epa.gov/efinpage/efcn.htm In North Carolina, the EFC is at the University of North
Carolina-Chapel Hill: http://www.efc.unc.edu
EPA’s State and Local Climate and Energy Program http://epa.gov/statelocalclimate/
EPA’s Clean Energy Program http://epa.gov/cleanenergy
DOE’s American Recovery and Reinvestment Act Website
http://www.energy.gov/recovery/index.htm
Database of State Incentives for Renewables and Energy (DSIRE)
http://www.dsireusa.org/
Key Resources to Know
