One of the most commonly cited barriers to investments in energy efficiency and renewable energy in the built environment is that the payback is too long.
Private‐sector capital commonly chases investments with paybacks between three and five years in the commercial property space and financing terms rarely exceed 10 years. Building owners on average prefer a 3.4-year payback time on energy efficiency investments when investing their own capital, according to Johnson Controls JCI -0.87%.
On-bill financing and property assessed clean energy (PACE) are two prevalent program strategies for expanding access to long-term financing for clean energy investments in the built environment. The secret sauce for both strategies is the collection mechanism. In both cases, the strategies strike to “de-risk” the investment by recovering the capital on bills customers almost always pay: utility bills and property tax bills. Read full story.