What We Do
The Clean Energy Finance Center, a 501(c)(3) nonprofit organization, works with stakeholders to develop policies and programs that drive investment in energy efficiency and small-scale renewable energy, and maximize leverage of limited public funds to attract private capital. We seek to transform markets by helping states and communities develop effective, sustainable financing approaches in the building sector (residential, commercial, government/institutional). Our key strategies include:
- Providing education and guidance to state and community leaders to help them understand and choose among the growing number of clean energy finance tools (e.g., PACE, on-bill financing, performance contracting, green banks, etc.), many of which have great potential but are new and unproven;
- Facilitating strong solutions by bringing all clean energy finance stakeholders to the table including: lenders and investors, governments, environmental groups, utilities, energy service providers, etc.;
- Publishing news and information on financing of energy efficiency and small-scale renewable energy; and
- Enhancing the availability and quality of loan performance and energy savings data to support market growth in the new asset class of energy efficiency investments.
Our comprehensive and collaborative approach has established the Clean Energy Finance Center (CEFC) as one of the leading nonprofit organizations in clean energy finance. In Connecticut, we have played a central role in the development of several key policies and programs in a state that is recognized as being on the cutting edge of clean energy. For example, we brought the innovative green bank concept to the state and helped establish Connecticut’s new Clean Energy Finance & Investment Authority. The CEFC also developed and promoted a best-in-class program on performance contracting that will allow the state to achieve its ambitious energy reduction goals for public buildings. In addition, we are working in South Carolina to help the state enhance its performance contracting program, and in Pennsylvania to develop innovative solar financing approaches for the southwest region of the state.
Our Focus Areas
Energy Efficiency in State and Municipal Buildings
In the government/institutional building sector, a proven approach to implementing energy efficiency retrofits is energy savings performance contracting (ESPC) – approximately $4 billion of ESPC projects are implemented in this sector annually. While this is a significant level of investment, it represents a small percentage of the potential application of ESPC in state and municipal buildings nation-wide. The Center is working in Connecticut and South Carolina, and plans to work in additional states, to enhance their ESPC programs in order to drive much higher levels of investment in energy efficiency retrofits in public buildings.
One of the most promising emerging ideas in clean energy finance is the concept of a “green bank,” which is a quasi-governmental entity that leverages limited public sector funds with private sector capital and provides a one-stop-shop for clean energy financing. In addition to Connecticut’s green bank (Clean Energy Finance & Investment Authority), and New York City established a similar entity called the New York City Energy Efficiency Corporation. The Center is working closely with stakeholders in Connecticut to build its green bank, and plans to work in other states and cities to help establish or build green banks.
News and Information
An important component of the CEFC’s mission is to help local and state governments, the financial community, and other key stakeholders stay informed of developments in clean energy finance. Some existing outlets cover clean energy finance broadly, but there are no news or information sources that focus exclusively on financing of energy efficiency and small-scale renewable energy at the state and local level. To fill this information need in the marketplace, the CEFC has launched a free electronic news service that will focus on these issues.
Energy Savings and Loan Performance Data
The market for energy efficiency financing is still in its infancy. One of the major reasons is that there are limited data in two key areas: 1) the actual performance (actual vs. estimated energy savings) of energy retrofits; and 2) the performance of energy efficiency loans (in particular default rates). The CEFC will be working with stakeholders to design policies and programs that allow for the tracking and collection of this information so that energy efficiency lending becomes more attractive to investors.
To help states assess their needs and opportunities in energy efficiency and small-scale renewable energy finance, the CEFC is exploring way to research and publish benchmarking information that will provide quantitative and qualitative information on each state’s policies and programs in these areas.
One of the largest barriers to the deployment of clean energy in all sectors of the economy is inadequate investment in clean energy projects. While there has been a huge influx of federal funds over the last few years through the American Recovery and Reinvestment Act, these funds will be depleted soon, and new and sustainable sources of capital will be needed. Unlocking the potential of clean energy by creating a robust clean energy finance market would bring significant economic, environmental, and energy security benefits. In the building sector, which accounts for 40% of all energy use in the U.S., we currently spend in the range of $10 to $15 billion per year on energy efficiency retrofits. It has been estimated that the U.S. could reduce energy use in those sectors 23% in ten years if it invested about $52 billion per year in cost-effective energy efficiency measures (i.e., projects with a net positive payback) over that period. The resulting monetary savings would be about $120 billion per year, and it would reduce greenhouse gas emissions by an estimated 1.1 gigatons (about 17% of total U.S. emissions in 2009) annually. The increased investment would also create about 600,000 jobs per year.
The Clean Energy Finance Center is supported by the Emily Hall Tremaine Foundation.