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The Energy 101: Energy Financing Training presentation, developed for the Energy Technology Innovation Partnership Project (ETIPP), provides an overview of energy project financing. It covers fundamental concepts, technologies, considerations, case studies, and additional resources.
To meet clean energy goals, states will need significant capital. Federal funding from the Inflation Reduction Act and the Infrastructure Investment and Jobs Act will help, including by capitalizing clean energy state revolving loan funds (RLFs). States can leverage state clean water revolving funds to finance even more clean energy improvements. New York and Pennsylvania have used this innovative mechanism to extend the impact of their clean energy loan programs. For states looking to extend the reach of their clean energy financing programs, the brief: -Explains how each state leveraged their state revolving funds, -Identifies critical success factors for doing so, and -Offers key elements for replicating this model In New York, New York State Energy Research and Development Authority structured a sale of bonds secured by the repayments from a portfolio of residential energy efficiency loans from its Green Jobs – Green New York Program, with the additional support of a guarantee from the state’s clean water revolving fund. The Pennsylvania Treasury Department received a direct investment of funds from Pennsylvania’s clean water revolving fund to support the relaunch of the Keystone Home Energy Loan Program (HELP), which had previously been shuttered due to lack of support funding. From our review of these two case studies, when facilitating state clean water revolving fund transactions to support clean energy lending, the following critical success factors emerged: -Reference to preventing atmospheric deposition resulting from the combustion of fossil fuels in the state’s Clean Water Act Section 319 Nonpoint Source Pollution Management Plan, which sets out that state’s strategy for reducing pollution into state waterways. -Strong relationships and trust between the clean water revolving fund administrator and the state agency administering the clean energy loan program. -Limited funding exposure for the clean water revolving funds—which are generally large and well capitalized—to ensure that any losses experienced by clean water revolving funds would have a negligible impact on the fund’s ability to support core water and wastewater projects. -Willingness, on the part of the clean water revolving fund administrator, to innovate and engage in careful analysis to support transaction structuring, and support from state energy partner organizations. The brief provides case studies of these states’ experiences, critical success factors, and key elements for replicating the model.
This NREL training provides a basic introduction to the options for financing a clean energy project as well as for recovering the investment and generating revenue from the project. Two common clean energy project types will be used as case studies to walk through the process and details of obtaining project funding and recovering the investment.
We examine the energy use impacts of energy efficiency and solar PV projects financed by residential property assessed clean energy (R-PACE) programs in California. We leverage household-level interval meter data to apply normalized metered energy consumption (NMEC) methods at significant scale—more than 25,000 electric meters and more than 15,000 gas meters. We develop a comparison group to account for non-project-related changes in usage. The projects include homes that replaced existing HVAC equipment with higher-efficiency units and homes that installed central heating or air conditioning equipment for the first time. We have limited information on pre-project household equipment stock so we develop a method to infer new installations. We find that projects that installed energy efficiency technologies reduce electricity consumption by approximately 3% and gas consumption by approximately 3.5% on average. When we remove homes that installed new cooling and heating equipment for the first time, savings rise to approximately 5% for electricity and approximately 6% for gas. Given the California climate and the results of an existing study of similar California projects, these results are in line with expectations. Solar PV projects produce electricity that offsets approximately 69% of household electricity consumption on average. We estimate that California R-PACE projects installed through the end of 2019 produce annual reductions in grid-tied electricity consumption of 506 GWh (equivalent to the electricity consumption of approximately 74,000 California households) and gas consumption reductions of 2 million therms (equivalent to the gas consumption of approximately 4700 California households) in a typical weather year.
This presentation discusses financing strategies and examples for a range of Energy Efficiency Conservation Block Grant-eligible clean energy initiatives. Beginning with a brief overview of project development and financing, it will address public and private funding sources, ownership models, and key considerations to help practitioners choose among different approaches. The discussion will include examples from three project categories: strategic and planning activities, incentives and structured finance, and direct infrastructure investment.
The Energy to Communities (E2C) peer-learning cohort program provides technical assistance to groups of 15 community entities around a common energy topic over the course of 6 months. Every month, participants join a virtual meeting where they hear from experts and exchange strategies and best practices with their peers.This cohort, "Successful Energy Project Implementation" will explore common challenges in implementing energy projects and learn strategies to turn project plans into reality. Each participant will focus on a local energy project or priority as a cornerstone for their learning throughout the series. This presentation focuses on strategies for successful project financing. This workshop is on April 29, 2026.
Many energy efficiency financing programs could achieve greater uptake and impact by more effectively recruiting participants. This report examines some of the primary factors that have contributed to high participant uptake among successful financing programs. We review best practices in partnerships (Chapter 2), direct marketing (Chapter 3), and program design (Chapter 4) that facilitate robust participation. This report is primarily designed for state and local governments that have established energy efficiency financing programs or are considering doing so and are seeking insight into how they can ramp up program participation. In disseminating lessons learned from well-established programs that have experienced success in their target markets, the objective is to help scale up the large number of energy efficiency financing programs that seek to replicate these successes. This report can inform states, local governments, and other entities that will establish or expand clean energy financing programs with funding made available under the Infrastructure Investment and Jobs Act and the Inflation Reduction Act.
This study investigates the impact that operations and market strategy have on the design and value of an energy storage system on three levels of the facility: the cell level, the system level, and the project level. The study provides insights for developers, capital providers, customers and policy makers into the impact different operational strategies have on effectiveness of energy storage system in today's emerging market. Energy storage systems can be used for a variety of usage profiles, with the choice having a profound impact on their performance, lifespan, and revenue potential. Most evaluations of application stacking only look at the possible revenue potential without understanding the increased costs and potential for major damage to the cells. Evaluating the impact of operational choices is critical to understanding the risk adjusted return from energy storage project investment. This is the fifth study in the Energy Storage Financing Study series, which is designed to investigate challenges surrounding the financing of energy storage projects in the U.S., promoting greater technology and project risk transparency, reducing project transaction costs, and supporting a level playing field for innovative energy storage technologies.
This technical report benchmarks current project financing costs for multiple renewable and conventional energy technologies, and looks out how these costs may change in the future. This report was performed in conjunction with NREL's Annual Technology Baseline.
This presentation provides a look at the full lifecycle of the financial elements of a clean energy project. It reviews approaches for obtaining up-front capital, and then describes options for recovering the investment and generating profit or revenue from the project. The presentation was produced as a training for awardees of the Energizing Rural Communities prize.
New federal financial resources are available to community-based energy storage projects and new financing structures are emerging in response. Many of these new resources arise from the Inflation Reduction Act of 2022, which makes billions of dollars available for clean energy technology like energy storage. It also makes clean energy tax credits available to certain community entities through a new elective pay mechanism. These new resources are a significant opportunity. Navigating their nuances may be challenging. This paper aims to identify and raise awareness of these developments and serve as a resource guide for community entities considering or pursuing community energy storage. The paper is arranged around key financial considerations that a community entity might weigh: the benefits desired from the project, the costs to provide those benefits, project ownership, pursuing tax credits, and additional sources of capital. These considerations give rise to several potential financial structures that are identified and finally compared.
This study investigates the issues and challenges surrounding energy storage project and portfolio valuation and provide insights in to improving visibility into the process for developers, capital providers, and customers so they can make more informed choices. Energy storage project valuation methodology is typical of power sector projects through evaluating various revenue and cost assumptions in a project economic model. The difference is that energy storage projects have many more design and operational variables to incorporate, and the governing market rules that control these variables are still evolving. This makes project valuation for energy storage more difficult. As the number of operating projects grow, portfolios of these projects are being developed, garnering the interest of larger investors. Valuation challenges of these portfolios can be even more challenging as market role and geographical diversity can actually exacerbate the variability, not mitigate it. By proposing additional visibility of key factors and drivers for industry participants, the US DOE can reduce investment risk, expanding both the number and types of investors, plus helping emerging energy storage technology into sustained commercialization.
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This issue brief is for state and local governments that want to track the energy impacts and performance of a Commercial Property Assessed Clean Energy (C-PACE) financing program. C-PACE programs provide a mechanism for commercial property owners to finance energy improvements and can provide a variety of both private and public benefits.
Escalation rates applied to the savings from energy savings performance contracts (ESPCs) and related financed energy projects play a large role in their scope and costs. The U.S. Department of Energy’sFederal Energy Management Program (FEMP) employs the National Institute of Standards and Technology (NIST) to package projections of real (uninflated) energy prices and general inflation forecasts developed by two other federal government entities. The main output from this exercise is NIST’s Energy Escalation Rate Calculator (EERC), which is strongly recommended by FEMP for use in performance contracts and relied on by federal agencies and others conducting performance contracts as an objective source for their projects’ escalation rates. This study investigated whether the rates prescribed by EERC (and a coarser NIST tool that preceded it) have provided users with estimates that approximate actual changes in energy prices over the years. The results are encouraging: the NIST tools slightly under-estimated actual electricity prices and somewhat over-estimated those for natural gas. Concern regarding the latter is mitigated, however, because a) it is seen as due primarily to the increasing surplus of natural gas from the “fracking revolution” in the 2010s, and b) natural gas savings were found to account for only 14.4% of the total savings from the largest population of federal ESPCs (FEMP’s indefinite quantity ESPC contract, representing roughly 430 projects), compared to almost four times that (56.8%) for electricity savings. Consequently, reliance on EERC appears to be a sound policy.
Nearly three-fourths of U.S. states have authorized local governments to use voluntary special assessments on commercial properties to finance energy improvements that boost economic development, create jobs, increase property values and advance energy goals. Commercial Property Assessed Clean Energy (C-PACE) financing allows building owners to repay the borrowed capital — from private or public sources — over time using their property as security. Berkeley Lab is supporting the Department of Energy’s Commercial PACE Working Group by developing a series of C-PACE issue briefs. The second brief in this series, Practices for Demonstrating Energy Savings from Commercial PACE Projects, looks at common practices for demonstrating energy savings to support state and local governments that sponsor C-PACE programs and want to track their energy impacts. This brief reviews: -The value proposition and trade-offs of conducting energy impact assessments for C-PACE programs; -Methods to quantify energy savings impacts from energy efficiency building improvements; and -Available resources and tools to support energy impact assessments. C-PACE programs may benefit from energy impact assessments for many reasons, including: -Validating the public benefits of the programs -Demonstrating that C-PACE can deliver participant benefits -Illustrating program impacts on public policy goals -Generating data to help improve program performance Many C-PACE programs are collecting data on project energy savings impacts, and these data can be leveraged to further support decision making and program implementation. Potential drawbacks to energy impact assessments may include added cost and burdens on property owners (e.g., the need to collect building energy consumption data). Where these burdens are considerable, they might slow program uptake. State and local governments can balance the benefits of energy impact assessments with the range of costs and accuracy inherent to available assessment methodologies. Additionally, depending on the policy context in the state or local government, a C-PACE program may be able to leverage existing efforts (e.g., building energy benchmarking programs) to reduce impact assessment costs, align with building owner practices and expectations, and efficiently assess program impact.
This resource summary is for state, local, and K-12 energy professionals and non-finance experts seeking to understand how bonds can be used to pay for energy efficiency and renewable energy projects and initiatives. The objective of the resource summary is to inform energy professionals, so they can more confidently and efficiently discuss bond financing with public finance officers and executive leadership as an option for supporting energy goals.
Governments procure renewables through a variety of mechanisms. Contracts for difference (CfDs) have been used for more than 50% of the global offshore wind supply. The payments awarded through CfDs are sometimes labelled subsidies, suggesting that they support uneconomic activity. Here, in this study, we argue that the primary role of CfDs is rather risk management by creating a market for electricity supply at stable long-term prices. Similar to its use in other sectors of the economy, this contract type transforms a variable to a fixed price to reallocate volatility risks. Such long-term contracts are often necessary for renewables financing due to limited hedging options in existing markets. Our perspective could imply a shift in perception towards CfDs as a fundamental and lasting market feature. We hope to stimulate a timely discussion about the impact of greater CfD diffusion on electricity market mechanisms, risk allocation and the potential for combining fragmented streams of energy finance, market and policy research.