The document discusses challenges with financing energy efficiency projects. It notes that two key challenges are a lack of quality data and low consumer engagement. It describes different models for direct financing to consumers and indirect financing of larger projects. Open energy data initiatives could help address data issues and allow better assessment of risks. Improving consumer engagement on energy use would also help promote direct financing options.

1. The Future of Financing Energy Efficiency
University of Pennsylvania
Michael Meehan
CEO, Zerofootprint USA
©2013 Zerofootprint - Company Confidential

2. First, A Story…
©2013 Zerofootprint - Company Confidential

3. 1. Energy Investment
Challenges
So if the finance industry has been engaged in
climate and energy for decades, why are we
here?
Investment in energy projects requires good
information. To get better information to investors, two
primary challenges remain:
1. Availability of quality data
2. Consumer Engagement
©2013 Zerofootprint - Company Confidential

4. 2. Energy Sector Financing
Direct vs. Indirect
DIRECT INDIRECT
• Consumer Rebates • Green Energy
• Homeowner tax Subsidies
Incentives • Insurance/Reinsurance
• Utility Rebates & • Program underwriting
Incentive Programs • Federal Investment
• Low-interest loans for programs (ATVMLP)
consumers • Low interest loans to
residential and
commerical
©2013 Zerofootprint - Company Confidential

5. 3. Energy Financing
Direct to Consumer
Direct energy financing addresses the “low-hanging
fruit” in the market (e.g., retrofits, Energy Star) and
provides direct, tangible funding for consumer
purchases. The most straightforward, but has met with
limited success.
The nation’s 130 million homes account for 20% of US
emissions. The technology is widely available and
payback periods are known with a high degree of
confidence.
So why aren’t we doing retrofits everywhere?
©2013 Zerofootprint - Company Confidential

6. Energy Intelligence
Starting with the Consumer
Engaging energy consumers (e.g., tenants) is the key to
acquiring the data required to make investment decisions. If
you can’t engage them, the returns on investment rapidly
decrease.
Declining Returns within Engagement Programs
$10 Million
(47%)
$ Budgeted
$5 Million
$4.7 Million
$300K
Successful Implementations / Time
©2013 Zerofootprint - Company Confidential

7. Direct Energy Financing
Challenges
Retrofitting costs real money, and the market has a data
problem.
•Costs are high: $10-15K per home ( x 130M homes =
$2T)
•Direct financing schemes are not uniform and are often
not marketed appropriately.
•Lack of actionable data – smart meters, APIs, closed
utility systems provide data, but do not engage consumers
•Leads to a lack of investor confidence in the data from
energy projects, especially in residential
©2013 Zerofootprint - Company Confidential

8. 4. Indirect Energy Financing
Large-scale energy efficiency projects offer more suitable
investment vehicles but have their own challenges.
•Complexity begins at the lowest levels (meters, HVAC systems,
building controls, smart homes, etc)
•Problem is compounded by complex systems to get the data:
buildings management systems, closed utility systems, etc.
•Few standards for the communication of data (beyond the building
such as Zigby, etc)
•But some successful funding models
• US Dept of Housing and Urban Dev (HUD) offers creditworthy
borrowers for EE upgrades (not homeowners)
• Federal Housing Admin (FHA) PowerSaver Program ($25M)
©2013 Zerofootprint - Company Confidential

9. Energy Intelligence
Open Energy Data
This push for "open" energy data will enable the
financial sector to more accurately assess risk in
energy projects, whether we're talking about
insuring ESCOs, federal backing of energy
efficiency projects, or supporting the reinsurers.
•White House Open Data Initiative
•Green Button (Dept. of Energy)
•App platforms for Energy Star (NYSERDA)
•Mostly for commercial applications, consumers
aren’t engaged in energy
When consumers are engaged on energy, then it’ll
be the right time to fund it directly. Until then,
indirect investment vehicles are less risky.
©2013 Zerofootprint - Company Confidential

10. 5.
Energy Intelligence Strategies
Bringing Better Data to the Energy
Investment Discussion
Leveraging quality data for intelligent investing in indirect energy
financing.
Federal funding to insure the consistent returns in operating cost reductions of
energy efficiency projects (rather than the reductions themselves) and
packaging these insured savings (indirect).
Underwrite ESCO-driven energy efficiency projects to increase lender
confidence in the projects, while allowing ESCO profitability.
Better consumer engagement on energy to promote direct financing.
Until now, data hasn't existed in a place where companies that have an incentive
to engage people on energy could use it. This is why open energy data like Green
Button is so exciting. This is the first time in US History that the data has been
available for investment analysis. These new “Apps for Energy” will promote
investment through better data.
©2013 Zerofootprint - Company Confidential

11. Michael Meehan
CEO, Zerofootprint USA
michael.meehan@zerofootprint.net
©2013 Zerofootprint - Company Confidential