Financing Energy Efficiency

Upfront costs are one of the major barriers to implementing energy efficiency projects in homes and businesses. Effective financing strategies can minimize these costs to encourage property owners to invest in energy-saving improvements and retrofits. This financing may be offered by various entities including utilities, federal, state, and local governments, and energy service companies (ESCOs). In addition, private equity entities have become increasingly interested in funding packages of energy efficiency projects. Despite promising signs, however, energy efficiency financing has ebbed and flowed over the past few decades due to its complexity and challenges for which resolutions are still evolving.

This toolkit section provides an introduction to existing financing mechanisms, their benefits and drawbacks, and related resources such as ACEEE’s annual Energy Efficiency Finance Forum. Topics include: