Every indication is that there is a great need for the type of standardization that we are helping to bring to the market, but like so many efforts, the proof is in execution. This is particularly true in the case of industry protocols like the ICP. The more people that use the protocol the more valuable they will become to all involved.
greentech media, January 17, 2013
A new protocol aims to build investor confidence in retrofits to ultimately build a securitized market.
KATHERINE TWEED: JANUARY 16, 2013For the past two years, the Environmental Defense Fund (EDF) has been spearheading a project to open up energy efficiency to investment markets.
The EDF Investor Confidence Project (ICP) has not instilled confidence in the market just yet, but it has just announced the first significant step in the process.
An initial set of protocols is now available to the commercial energy efficiency industry. The protocols, for large and medium commercial and multi-family units, are meant to ultimately serve as the base minimum requirements for an investment quality analysis on how to maintain and validate lower energy use. The nonprofit’s ICP is attempting to create a system to make it easy to identify an investment-quality energy efficiency product to unlock capital, which could take years to be fully realized. In the short term, it is looking to reduce engineering-related transaction costs and increase deals.
“At a very high level, we lack some really fundamental things,” Matt Golden, senior energy finance consultant at Environmental Defense Fund, said of the energy efficiency market.“We don’t have a standardized understanding of what a project consists of and how to measure results.”
The project is not about creating more standards, but rather about bringing all of the disparate standards in the industry together and assembling them into something that creates a predictive analysis of how a project will perform. Golden described energy efficiency projects as a commodity. “I’m growing corn,” he said by way of analogy, “but I don’t have a way to bring my corn to market.”