Can energy efficiency rise to its $279 billion potential and help meet climate goals?

Blog Post | April 29, 2016 - 10:00 am
By Brian Stickles , Senior Research Analyst, Finance Policy

Energy efficiency financing has seen record growth over the past year. Property-assessed clean energy (PACE) hit a billion dollar milestone, the nation’s largest green bank has roughly $4 billion of projects in the pipeline, and green bond issuance grew from $3 billion four years ago to over $40 billion in 2015. Total energy efficiency investment in buildings is slated to reach $125 billion by 2020, which is still less than half of the estimated $279 billion available.

But is it enough? On one hand, the market is telling us that we are poised to leave hundreds of billions of dollars on the table, while the Paris climate negotiations earlier this year set investment targets of over $200 billion to help avoid climate change. Energy efficiency financing is growing fast, but can it grow fast enough?

Green banks have emerged to meet the demand previously unmet by cash-strapped public enterprises and risk-wary private ones. They are facilitating billions of dollars of investment and growing nascent program to scale, but there are just a handful of them and many are nascent programs themselves.

PACE has seen astounding success in the past year, but all that success is still a fraction of its potential. Of the 32 states with enabling legislation, only 16 have active programs, and the vast majority of projects are being done in just one.

For this reason, green banks and PACE are headlining this year’s ACEEE Energy Efficiency Finance Forum in Newport, Rhode Island. These two topics exemplify the theme of this year’s conference, “going deep,” as they have both just scratched the surface of their potential. In order to scale, we need deep energy efficiency retrofits as well as deep market penetration. We need to move beyond swapping out light bulbs and reaching only early adopters.

At this year’s conference we explore all facets of the industry: residential; commercial; multifamily; and the municipalities, universities, schools, and hospitals sector. Within these tracks we will feature case studies of successful financial programs and products so that you can apply these concepts in your own companies and communities. Covering utility programs, different lease agreements, and all types of energy performance contracts, this year’s Finance Forum will spread myriad success stories.

To shed more light on these topics, we will be joined by Rhode Island general treasurer Seth Magaziner who will give the opening plenary speech. Massachusetts energy secretary Matthew Beaton will cross state lines from the top-ranked state in energy efficiency to give Monday’s luncheon address. Tuesday morning, Judith Greenwald, deputy director for climate, environment, and energy efficiency from the Department of Energy’s Office of Energy Policy and Systems Analysis (EPSA) will talk about the Quadrennial Energy Review.

We’d welcome you joining in the discussion. There’s still time to register and book a room at conference rates. Please visit our Finance Forum web page for more information. See you in Newport!