A NEW WAY TO FUND EFFICIENCY
This May Be the Most Innovative Energy Efficiency Financing Tool Yet; The inventor of renewable energy credits has something else up his sleeve.
Stephen Lacey, June 19, 2013 (Greentech Media)
“…[A] tool for deploying energy efficiency [could] be far more revolutionary [than the Renewable Energy Credits (RECs) that have helped drive New Energy growth] … MEETS, the metered energy efficiency transaction structure [is] like a power purchase agreement for energy efficiency…[MEETs] breaks down nearly every conceivable conflict between landlords, tenants, investors and utilities that stand in the way of deep efficiency retrofits…
“…[It] starts with a simple meter installed on that customer's building by EnergyRM to measure energy use and normalize the data. That provides the baseline…Next, an investor is brought in to finance a project on the building. Much like a third-party solar lease, the investor ‘rents’ the building for installation of energy-efficient equipment and compensates the owner with a monthly payment…EnergyRM is able to measure the baseline consumption data against the efficiency savings…The utility then charges the building owner for electricity based upon the baseline data, just as it normally would without the efficiency upgrade. (Again, the building owner is getting a monthly rental payment from the investor, rather than going through the utility.)…”
“The investor who owns the energy efficiency project gets paid a premium by the utility over a twenty-year contract for each kilowatt-hour of metered energy efficiency, or ‘negawatts,’ delivered…The utility can then turn around and sell those energy reductions into the capacity markets or energy markets and get compensated for not having to build a new power plant…
“…[T]he building owner…receives monthly rental payments from the investor, continues her same relationship with the utility and has a more valuable building…[T]he investor…has a stable twenty-year agreement with the utility based on performance…[and the utility] gets fully compensated for the electricity sold to the building owner and can treat efficiency like a power purchase agreement for any other generation source…[Th]e structure could result in about $40,000 a year for the Bullitt Foundation over the twenty-year contract…”
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