Economics & Finance
This is the first post in a three-part series on understanding and increasing investments in energy efficiency by businesses and individuals. The second post discusses the motivations for investment, and the third discusses approaches that could increase investment in the future.
Congress is likely to tackle federal tax reform in 2017 and may consider new ideas. One proposal it should seriously consider is clean tax cuts—the application of supply-side tax rate cuts to investments that reduce the emissions of harmful pollutants. Cutting tax rates on income gained from clean investments such as energy efficiency improvements could incentivize investors to tap large amounts of private capital.
The meteoric rise of Property Assessed Clean Energy (PACE) financing over the past few years has been surprising even to those working in clean energy finance. Since its inception in 2009, PACE has enabled $3.3 billion in renewable and energy efficiency investments in people’s homes, $2.8 billion of which occurred in 2016 alone.
2017 will usher in a new administration and likely some changes in federal energy policy. Despite the uncertainty of such change, one fact is clear: financing of energy efficiency investments is more important than ever.