Key Financing Elements for State, Local, and Tribal Energy Programs

When designing financing strategies for energy programs, state, local, and tribal governments should consider these key elements.

  • Market Segments

    What market segments do you want to target with your financing program? Different financial products work better for different market segments, such as residential, small business, commercial, and MUSH (municipal, university, school, and hospital) markets.

  • Transaction Points

    What transaction points do you wish to target? Different financial products work better for different transaction points, such as emergency equipment replacements and planned comprehensive retrofits at time of sale or at time of renovation.

  • Eligible Measures

    What eligible measures will be funded under your financing program? Defining eligible measures is important to guide participants toward the highest value improvements.

  • Financing Terms

    What financing terms do you need to define? You must make important decisions about the interest rate, length of term, credit requirements, and security interest.

  • Credit Enhancement

    Can you use credit enhancement mechanisms to create a more effective financing program? Credit enhancement can make credit available to those who do not have access to capital, and it can attract additional private capital through lowered risk to investors.

  • Source of Funds

    What are possible sources of capital for financing energy efficiency and renewable energy projects? Possibilities include utility ratepayer financing, bonds, and loans.

  • Financing Program Pitfalls to Avoid

    What can be learned from experience in both existing and past programs about why some financing programs have not reached their targets? What can you do to avoid these pitfalls?

  • Characteristics of Strong Programs

    What are the elements that distinguish strong state and local financing programs? Successful programs seem to share several characteristics in common.