Strategies and incentives to finance energy efficiency projects

Image of calculator, receipt, and pen.

Do any of these sound familiar?

“If it’s not in this year's budget, it simply has to wait.”

“Energy isn’t a huge cost for us, so efficiency isn’t that important.”

“Equipment improvements must be paid from the capital budget.”

“We’ll save more money by paying lower interest (with floating bonds) or no interest (by delaying the project and planning it into future budgets), so why would we do this any other way?"

If so, EPA has tools to help. So the next time you face your executive board, chief financial officer, city council, or other decision makers, you’ll be better equipped to persuade them that energy efficiency upgrades can pay for themselves and should be implemented as soon as possible.

Quantify the cost of delay

Put a lid on the “we don’t have the money” objection by translating energy savings into “financial speak.” The Cash Flow Opportunity Calculator has been used to sell energy efficiency projects to decision-makers around the country. It uses simple financial logic that should be familiar to all financial managers and demonstrates that delaying or waiting for financing comes at a significant cost.

Finance your energy efficiency projects

Innovative Financing Solutions: Finding Money for Your Energy Efficiency Projects is an 11-page paper for public-sector organizations that defines some standard financial terms, presents financing options, and lets you calculate a "cost of delay.” Topics include operating expenses versus capital expenses, tax-exempt lease-purchase agreements, performance contracts, net interest cost, and how to develop a financing proposal.

Find incentives and programs in your area

Many utilities, state and local governments, and other organizations across the country sponsor energy efficiency programs to help you finance efficiency programs. Find sponsors in your area by checking the Directory of Energy Efficiency Programs.