Energy Efficiency Projects Under $250K Lack Financing

According to Joule Assets’ first national energy efficiency financing and insurance survey, the majority of respondents said 67 percent of energy efficiency projects under $250,000 lack access to financing.

Joule Assets polled over 3,000 energy efficiency professionals, including contractors, manufacturers and energy efficiency trade associations for its survey.

Why is access to financing so difficult for projects of $250,000 and under? According to the survey:

• Credit risk is often poorly understood by traditional financiers.
• A diffusion effect occurs when financing smaller projects; this has meant it’s been more cost effective to finance fewer, larger projects, compared with many smaller ones with commensurate total capitalization.
• Creating demand for small projects is costly.
• Tracking and measuring is too costly.
• Cost-effective debt collection is a challenge.

Results also showed that the number of projects undertaken per year had a positive correlation with access to financing, up until companies performed more than one thousand projects per year.

Joule Assets offers an array of financing options to fund small-to-midsize energy efficiency projects.

In August, a survey conducted by Noesis Energy found the primary reasons why energy-efficiency projects are not getting approved are i) the inability to get funding; and ii) uncertainty about savings estimates.