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Financing Options for Onsite Generation, Energy Storage, and Energy Efficiency Projects

Across sectors, commercial and industrial facilities are benefiting from the implementation of renewable energy generation, storage, and energy efficiency projects. Despite the potential for these projects to reduce onsite energy consumption, build resiliency, and lower operational costs in the long term, the initial expenses are often high. However, there are a growing number of financing mechanisms that can be leveraged. When deployed strategically, these mechanisms can give organizations the financial tools to install projects that accomplish their energy goals. In 6 steps, this resource introduces organizations to a general process to contextualize the many different financing options, ultimately facilitating an informed selection of financing mechanisms. Step 1 discusses the importance of establishing clear organizational preferences. Step 2 briefly introduces common financing options and Steps 3 and 4 provide guidance for selecting mechanisms based on locational availability and organizational preferences. Finally, Steps 5 and 6 show how mechanisms can be combined with incentives and provide preliminary guidance for selecting and engaging with external partners. While this document provides a general approach to selecting a financing mechanism for renewable energy generation, storage, and/or energy efficiency, it does not contain tax and/or legal advice. A tax advisor should be consulted before taking any action.

25 ENERGY STORAGE

Power now, pay later: the evolution of U.S. residential solar financing

Most U.S. residential rooftop solar customers finance their solar purchases through loans or by buying power from third-party owned systems. Prior research demonstrates how third-party ownership (TPO) models such as leases emerged in the early 2010s and accelerated solar adoption by low- and moderate-income households while driving market concentration in the installation industry. Since 2015, loans have emerged as a prevalent financing alternative, but the potential effects of loans on the customer base and industry remain understudied. Here, we fill that research gap by developing a methodology to identify loan-financed and third-party owned systems in a household-level solar adopter data set. The data suggest that loans accounted for increasing solar market shares from 2017 until reaching as high as 70% in 2022, but that the market has since shifted back to TPO. The data show that TPO adopters in our sample earned about 16%–18% less and loan recipients earned 3%–7% less, at the median, than customers who self-financed systems. These results reaffirm prior research showing that TPO has accelerated low- and moderate-income adoption and that loans have likewise expanded the customer base to a lesser extent. The results suggest that loan-financed systems entail around a 16%–26% price premium that is only partly explained by loan fees. Finally, the data suggest that the emergence of loans has likely reduced market concentration in the rooftop solar industry.

financing

Driving Uptake for Energy Efficiency Financing Programs: Marketing and Outreach, Partnership Networks, and Program Design Considerations

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.

29 ENERGY PLANNING, POLICY, AND ECONOMY

Accessible Training and Shared Capitalization Platforms for Low-Income Solar Finance

From March 2020 through November 2023, the University of New Hampshire Carsey Center for Impact Finance and its partners worked to create accessible training programs and shared capitalization platforms to enable community finance institutions – such as credit unions, community banks, and Community Development Financial Institutions (“CDFI”s) – to expand their engagement in solar finance in low-income communities.

14 SOLAR ENERGY

Financing Storage as a Transmission Asset: Initial Considerations for an Emerging Use Case

Deploying energy storage as an electric transmission system asset is a unique use case that, despite a body of policy and regulatory support, has received little attention or investment in the United States. The benefits of using storage on the transmission system—and the remaining barriers to that use—have been explored elsewhere. This paper complements that body of research by exploring the finance implications of using energy storage as a transmission asset (SATA). Because transmission infrastructure in the U.S. is generally subject to rate-of-return regulation, in which asset owners receive both a return of their invested capital and a return on that capital, storage assets deployed for that use are not subject to market volatility and have a much lower risk profile overall. That lower risk profile would, in theory, correspond to lower interest rates and other more favorable financing terms relative to a storage project deployed in a market setting. This paper draws from corollaries in other markets to estimate the expected finance impacts of SATA projects.

24 POWER TRANSMISSION AND DISTRIBUTION

Solar Finance and Ownership Options

Communities facing specific solar project development opportunities or proactively planning their solar development strategies will need to have a basic understanding of solar financing and ownership options. How solar is financed and owned has large implications on how the solar project impacts local economic benefits, risk, and capital needs. This fact sheet provides a brief introduction to these considerations for local officials and community constituents to familiarize them with how local benefits and risks contrast across the basic ownership structures available.

14 SOLAR ENERGY

Energy Finance Training [Slides]

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.

24 POWER TRANSMISSION AND DISTRIBUTION

Rooftop Solar in Lawrence, MA: Community Perspectives, Deceptive Practices, and Financing Options

This report was prepared as part of the U.S. Department of Energy's Communities Local Energy Action Program (Communities LEAP) pilot competitive technical assistance for the Lawrence Massachusetts Stakeholder Coalition (LSC) composed of The City of Lawrence, All In Energy, MassDevelopment, Mill City Community Investments, BlocPower and Groundwork Lawrence, and led by Browning the Green Space. The LSC identified rooftop solar photovoltaics as a top priority for this technical assistance opportunity. Lawrence faces high energy burden and electricity prices, thus rooftop solar can be a tool to help lower those costs. However, the coalition received feedback that some solar companies were using deceptive and unfair practices when marketing, selling, or financing solar energy, costing residents more money than utility rates and increasing the energy burden. This project sought to address rooftop solar community priorities through two pathways: 1. facilitating community engagement to understand community perspectives and experiences with rooftop solar development; and 2. conducting a financial cash-flow analysis highlighting the varying fiscal outcomes for rooftop solar adopters based off rooftop solar leasing, ownership, or buying electricity from the utility (National Grid).

14 SOLAR ENERGY

Strategies for Successful Energy Project Financing [Slides]

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.

29 ENERGY PLANNING, POLICY, AND ECONOMY

Community Energy Storage Financing: Resources and structures under the Inflation Reduction Act

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.

25 ENERGY STORAGE

Understanding the Challenges of Financing Modular Construction: A Case Study for Prospective Multifamily Units

Compared to traditional site build, modular construction can significantly shorten construction schedules and speed income generation. Modular construction may also reduce construction costs. Yet access to commercial financing remains one of the most significant barriers to modular construction. Materials must be purchased, and production lines reconfigured for each project months ahead of fabrication. Materials alone can be 60% or more of the total cost of production. As a result, manufacturers require large upfront deposits—often 30% or more of the off-site contract. In addition, the capital-intensive nature of modular construction requires frequent progress payments for manufacturers to maintain cash flow. For those lenders willing to fund modular projects, many require the developer to share more of the risk. This may include the developer paying for line reservation fees and material deposits 3–6 months prior to production. Because these are unsecured loans, interest rates may be higher and loan amounts lower. As suppliers, modular manufacturers discourage retainage. Together, these and other factors may contribute to higher equity requirements for the developer—particularly at the beginning of the project.

29 ENERGY PLANNING, POLICY, AND ECONOMY

Financing Solar + Storage for Small Businesses in Underserved Communities

Solar and solar and battery storage deployment is under-utilized by businesses in low-income and disadvantaged communities, in large part due to system costs and limited or complicated financial options. This document summarizes existing financial tools, discusses important financial barriers, and identifies emerging programs and opportunities to address these barriers.

battery

A Recipe for ABC Multifamily Retrofits: Technologies, Financing, and Project Delivery

This report documents the final technical accomplishments and outcomes of Rocky Mountain Institute’s project under the U.S. Department of Energy (DOE) Award DE-EE0009064. The project aimed to develop, validate, and scale whole building retrofit solutions for multifamily buildings, including two configurations of Integrated Mechanical System Pods (IMSP-C and IMSP-U), in alignment with DOE Advanced Building Construction (ABC) initiative's decarbonization and energy efficiency goals. While the project made significant progress in Budget Period 1 (Phase 1) and throughout Budget Period 2 (Phase 2), activities were discontinued as of March 26, 2025, following a Stop Work Order issued by DOE. As such, this report reflects all completed work through that date. The project did not enter Budget Periods 3 and 4 (Phase 2), and demonstration site implementation, field M&V, and final commercialization execution were not conducted.

29 ENERGY PLANNING, POLICY, AND ECONOMY

Entropy-Assisted Quality Pattern Identification in Finance

Short-term patterns in financial time series form the cornerstone of many algorithmic trading strategies, yet extracting these patterns reliably from noisy market data remains a formidable challenge. In this paper, we propose an entropy-assisted framework for identifying high-quality, non-overlapping patterns that exhibit consistent behavior over time. We ground our approach in the premise that historical patterns, when accurately clustered and pruned, can yield substantial predictive power for short-term price movements. To achieve this, we incorporate an entropy-based measure as a proxy for information gain: patterns that lead to high one-sided movements in historical data yet retain low local entropy are more “informative” in signaling future market direction. Compared to conventional clustering techniques such as K-means and Gaussian Mixture Models (GMMs), which often yield biased or unbalanced groupings, our approach emphasizes balance over a forced visual boundary, ensuring that quality patterns are not lost due to over-segmentation. By emphasizing both predictive purity (low local entropy) and historical profitability, our method achieves a balanced representation of Buy and Sell patterns, making it better suited for short-term algorithmic trading strategies. This paper offers an in-depth illustration of our entropy-assisted framework through two case studies on Gold vs. USD and GBPUSD. While these examples demonstrate the method’s potential for extracting high-quality patterns, they do not constitute an exhaustive survey of all possible asset classes.

Physics

Feasibility and strategic implications of deploying nuclear power reactors in Africa

This report assesses the feasibility and strategic implications of deploying nuclear power reactors, including large-scale plants, advanced small modular reactors (SMRs), and microreactors, in African countries. Case studies focus on South Africa, Egypt, Kenya, Ghana, and Nigeria, examining nuclear energy’s role in Africa’s rapidly evolving energy landscape, marked by fast-growing demand, significant electricity access gaps, increasing renewable penetration, and strong policy commitments to industrialization and energy security. Several U.S. reactor technologies and designs are considered based on their development status and readiness for deployment. The analysis finds that nuclear power can provide reliable, clean baseload and flexible generation, as well as high-temperature process heat for desalination, hydrogen production, and industrial applications. However, suitability is highly country-specific, depending on grid size and stability, transmission capacity, cooling water availability, regulatory readiness, and fuel supply chains. Near-term deployment opportunities are strongest for light-water reactors (such as NuScale, BWRX-300, AP300, and SMR-300) that use low-enriched uranium and build on proven technology. More advanced concepts, including gas-cooled, sodium-cooled, molten-salt cooled reactors, and microreactors, will likely be relevant for African deployment in the 2030s or later, contingent on demonstration projects, high-assay low-enriched uranium (HALEU) fuel availability, and mature international licensing frameworks. Economic analysis shows that SMRs are capital-intensive, with projected overnight costs for 300 MWe units in 2025 ranging from approximately 1.4 to 2.6 billion USD per module. The levelized cost of electricity (LCOE) is highly sensitive to the weighted average cost of capital (WACC). Given typically higher financing costs and utility balance-sheet weaknesses in many African countries, bankable project structures will require sovereign guarantees, robust offtake arrangements, and layered financing from export credit agencies, development finance institutions, and vendor nations. Comparisons with recent large nuclear projects in the United Arab Emirates (UAE) and Egypt underscore the central role of state-backed loans, long tenors, and concessional terms. Country case studies illustrate a spectrum of readiness and opportunity. South Africa operates two 920 MWe pressurized light water reactors (totaling 1,840 MWe) at Koeberg and has the most mature regulatory and industrial base, positioning it as a prime candidate for both large reactors and SMRs to replace coal, support desalination, and anchor industrial hubs. Egypt is constructing four VVER-1200 units at El Dabaa with strong state leadership and could later complement this fleet with SMRs for coastal and industrial applications. Kenya and Ghana are advancing through IAEA Milestones with growing institutional capacity and clear interest in SMRs that match their smaller grids and industrialization plans. Nigeria has the largest demand potential but faces acute constraints in grid reliability, project bankability, and regulatory capacity; targeted deployments of large reactors and SMRs near coastal or industrial sites could have high impact if accompanied by major grid upgrades and institutional reforms. The report identifies cross-cutting challenges such as financing, political continuity, public acceptance, nonproliferation and security, waste and back-end management, regulatory capacity, grid adequacy, and long deployment timelines for first-of-a-kind designs, and ANL/NSE-26/3 ii proposes broad directions for resolution. These include stronger multifaceted financing for nuclear, long-term national energy strategies that transcend electoral cycles, proactive stakeholder engagement, strengthened regional and national regulators, and systematic workforce development through centers of excellence and expanded training. The United States should develop partnerships with African countries and offer end-to-end nuclear package similar to those used effectively by competitors: coordinated project development, state-backed financing, long-term fuel services, and durable in-country support through regional offices and sustained workforce/regulatory training. With timely planning, sustained political commitment, and appropriate financing and institutional support, nuclear energy, both large reactors and advanced SMRs, can become a meaningful, though not dominant, pillar of Africa’s future power mix, enhancing energy security, enabling industrial growth, and supporting climate goals.

22 GENERAL STUDIES OF NUCLEAR REACTORS