It has become apparent that the Trump administration will be substantially less supportive of energy efficiency and renewables than the Obama administration. This will pose a challenge for state energy offices who have worked closely with DOE in the past.
Does this mean that clean energy initiatives and uptake will be dramatically curtailed? That remains to be seen but it may not be a necessary outcome – but new conditions demand different solutions.
For instance, at a recent conference with a track that explored the multifamily market, the speakers, acknowledging the difficulty of driving uptake in the affordable market called for greater cash incentives as the best solution. While we know that cash can work, is there an alternative in this new world? Is there something else – more market-based and more sustainable that will work?
The answer for all market sectors is yes, if we can continue to develop convenient low-cost financing for comprehensive projects with positive cash flow. To do this we need to bring together sources of conventional financing (loans and leases) and innovative financing (efficiency services agreements) with the contracting industry, from performance contractors to HVAC and lighting specialists. To the extent that the providers of financing know and trust the project developers, they will provide lower risk, more convenient and lower cost financing.
The reason for this is that the capital providers know that borrowers that seek efficiency improvement tend to be good credits and that reputable contractors will satisfy their clients. And that satisfied clients, benefiting from the comfort, safety and reliability of new equipment and cash flow from energy savings, pay their bills. in the end, it is a virtuous cycle of better installations and better financing. The equipment leasing industry is a good example, the lenders get to know the installers, to the benefit of both parties and their customers.
What can states do in an era of less money? Bring in strong partners with capital; use the state name as a trusted partner, find ways to build a robust network of efficiency or renewable energy equipment installers through training, standards, codes of conduct and other similar measures. Find ways to facilitate strong communication between the installer industry and the finance industry – and by the way, that facilitation is a big part of what HB&C and its sister company HBC Energy Capital does every day.
It’s a new era, it requires new strategies and adaptations.