Author: Matt Golden

Investor Ready Energy Efficiency (IREE) certification offers a groundbreaking approach to energy efficiency by establishing a standard asset class for commercial retrofits. Standardization is crucial for defining how building retrofit projects are developed, engineered, and implemented and how their performance is measured.  Green Business Certification Inc. (GBCI)’s IREE certification aligns existing industry-accepted technical standards into a standardized project development and quality assurance process to ensure that energy efficiency projects are consistent and adhere to high performance
and impact criteria.

Author: Ben Evans
​This article was originally featured in Fortune on July 12, 2023. Read the original article here.

Following the commitments of governments, corporations, and institutions, billions in funding have been allocated to build a net-zero carbon economy by 2050. In the U.S., the Inflation Reduction Act (IRA) alone includes an estimated $369 billion in energy and climate provisions. These commitments represent an enormous challenge and opportunity to target critical barriers to meaningful greenhouse gas emissions reductions, which means we must not overlook our existing buildings.


While many sectors of the U.S. economy are reducing emissions, the buildings sector is a major exception, largely due to aging existing buildings. Homes and buildings account for 40% of U.S. energy consumption and at least 30% of U.S. greenhouse gas emissions–more than any other sector of the economy.


Of the country’s roughly 6 million commercial buildings, 75% are more than 20 years old. Given that these buildings will be in use for decades to come, they must be retrofitted to achieve the world’s climate commitments. The International Energy Agency estimates that we need to retrofit 20% of global building space by 2030 to meet emissions targets, or 2.5% of building space annually.
Smart policy and program design can offer a path to realizing both commercial and residential retrofits at a rapid pace.


Earlier this year, the U.S. Environmental Protection Agency (EPA) announced the initial program design of its $27 billion Greenhouse Gas Reduction Fund, a key climate financing initiative in the IRA. Over $19 billion of the fund will flow to nonprofit grantees, which will then allocate the funds to community financing institutions, such as green banks, community development finance institutions, and credit unions to invest in projects that lower pollution and energy costs.

The EPA rightly identified building efficiency improvements as one of three priority areas for funding. And as the agency moves closer to putting money on the street, it would be smart to look closely at a program implemented by our neighbors to the North that has successfully streamlined and accelerated similar investments in retrofit projects.


In 2020, Canadian Prime Minister Justin Trudeau announced a $2 billion investment in large-scale building retrofits as part of a national growth plan that would be funded by the Canada Infrastructure Bank. Since the announcement, the bank quickly ramped up a Building Retrofits Initiative to execute these investments. As of March 2023, the initiative has made $900 million in building efficiency investment commitments.


The bank’s unique approach provides a model for how public funds in the U.S. can be deployed into retrofit projects at the pace and scale required to move the needle on climate targets. By tying interest rates directly to carbon emissions reductions, the bank’s program incentivizes investment in projects with the greatest potential for climate impact, pushing funding to projects that deliver strong results.
The model used by the bank also brings standardization to predicting and documenting the potential energy savings associated with retrofit investments, overcoming complexity and bureaucracy that have historically been major barriers to investing in building efficiency at scale.


Today, it is typical for investors to utilize their own idiosyncratic approaches to predict and document project energy savings. This market fragmentation makes assessing project returns costly and evaluating project risks difficult. These challenges are compounded when operating an initiative responsible for deploying $2 billion.


To overcome these challenges, the Canadian retrofits initiative turned to Investor Ready Energy Efficiency (IREE) certification. Originally developed by the Environmental Defense Fund and now administered by Green Business Certification Inc. (GBCI), IREE provides third-party verification that the estimated savings associated with a proposed retrofit project have been determined and documented following industry best practices.


IREE certification enables the Canada Infrastructure Bank to partner with firms across the country that can develop and bundle retrofit projects at scale. It also makes underwriting the performance of these otherwise unique investment opportunities easier. The result is more potential projects sourced and evaluated at a lower cost. By uniting all its partners under a common framework, the Canada Infrastructure Bank is moving the retrofit market a step closer to the standardization that is common in other more efficient markets, such as those for mortgages, car loans, and solar power purchase agreements.


This article excerpt was originally featured in Fortune on July 12, 2023. Read the full article here.

​GBCI administers the Investor Confidence Project (ICP), and its Investor Ready Energy Efficiency Certification (IREE). ICP is a global underwriting standard for developing and measuring energy efficiency retrofits for commercial and multifamily residential buildings. Through its IREE certification, ICP aims to standardize energy efficiency upgrades.

“IREE certification was introduced to us as an alternative pathway to access PG&E’s zero percent on-bill financing (OBF) program,” says Corey Brophy, Director of Programs and Processing at EcoGreen Solutions. “So that’s what I initially saw the certification as, an alternative requirement, and additional compliance cost. I couldn’t have been more wrong.” 

Corey elaborated on the IREE incorporation process for their company and the differences they've seen as a result:

EcoGreen Solutions is an energy services firm that has helped thousands of organizations cut costs through energy-efficiency improvements since its founding in 2007. When the firm began following the IREE protocols for PG&E’s OBF program, they quickly realized that using the protocols as a standardized process for developing all projects would allow their team to reach many more customers. 

“IREE provides a recipe that standardizes the entire project development process. So, we jumped at the opportunity to engrain this standardization into our business model,” explains Corey.  

​Embracing IREE protocols fully enabled EcoGreen Solutions to break the development process into a precise series of ten to fifteen-minute tasks. “What took thirty to forty hours of a professional engineer's time now takes nine hours,” continues Corey. You can imagine the impact that has on profitability.” 

Not only did the embrace of IREE substantially reduce project costs, but the time savings also allowed EcoGreen Solutions to more than double the number of energy-efficiency projects they complete each year. ​

The benefits of IREE go beyond improved efficiency and output. With standardization comes consistency and quality. Each IREE project is vetted through a rigorous quality assessment and third-party certification process. This gives project financiers confidence in energy savings projections.

“The embrace of IREE has given us a competitive advantage when it comes to bidding projects. As a result, we’ve seen a huge uptick in the number of projects we are winning in the public sector,” shares Corey. “It’s hard to compete [with EcoGreen] when we are delivering projects that come with [the additional credibility of a] third-party certification.”  

Visit www.eeperformance.org to learn more about IREE certification or contact the IREE team at [email protected].  

The Investor Confidence Project has been working on reducing transaction costs and accelerating adoption of the PG&E On-Bill Finance Program. The webinar below discuss a number of changes to their program that brings it fully in line with ICP, and has resulted in a substantial increase in participation and project pipeline.  

PG&E is demonstrating how standards and simplified process based on consistent certification through GBCI and a network of QA providers can deliver deal flow and lower transaction costs for all parties.

OVERVIEW:
PG&E’s Energy Efficiency Financing program enables qualified, non-residential PG&E customers with a means to finance energy efficiency retrofit projects intended to replace worn-out equipment with more energy efficient models. Customers are offered a 0% interest loan that is in-line with the monthly energy savings from the project upgrades, payable through their monthly energy bill.
 
On Wednesday, July 10, 2019, the On-Bill Financing (OBF) Team will host a “Multiple QA Processes” webinar. An official agenda will be provided closer to the webinar date.
 
WHY IS THIS RELEVANT TO ME:
The Energy Efficiency program uses Investor Confidence Project (ICP) certified Quality Assurance (QA) reviewers to validate pre/post financing projects and confirm the energy savings amount per project, which determines the end customer’s final loan amount.
 
Currently, only one QA serves as PG&E’s main QA reviewer for Energy Efficiency Financing project opportunities. However, in order to scale and streamline the Energy Efficiency program, PG&E is moving from a single QA reviewer to multiple certified QA reviewers, with their own business relationships with the project developers of financed energy efficiency projects.
 
By joining our Energy Efficiency program, your company can generate additional revenue streams while significantly helping drive the energy efficiency objectives of PG&E and the entire state of California.
 
WHAT DO I NEED TO KNOW:
This webinar will provide all the information of participating in the PG&E Energy Efficiency program as a QA reviewer, from enrollment to the systems you will access to validate and confirm the energy savings per financing project.
 
For additional information, check out the Project Developer/Trade Pro Webpage, visit the OBF Webpage.

CONTACT OBF:
 Program Manager: Peter Thompson
 Webinar Hosts: Nadia Hassen | Tarun Kapoor
 
Questions about becoming a Project Developer/Trade Pro and upcoming trainings: Joe Isaacs
 
If you have any additional questions or would like to learn more about the OBF program, contact [email protected] or visit the OBF Wiki Page.

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The General Services Administration High Performance Building Adoption Task Group, an advisory committee of both federal and nonfederal experts, has released a letter with a set of recommendations to accelerate the adoption of high-performance federal buildings, focusing on upgrading existing buildings.

The letter advised projects to adopt national standards, such as the Investor Confidence Project (ICP), a global underwriting standard for developing and measuring energy efficiency retrofits for commercial and multifamily residential buildings. ICP is administered by GBCI and was conceived, incubated and developed by the Environmental Defense Fund as a way to leverage and replicate best practices in the public and private sector.
​
The recommendations to the GSA centered around addressing transaction cost barriers, as well as streamlining the project development and contracting process to create confidence and consistency in project returns. The committee also discussed mechanisms to allow energy performance contracting and energy efficiency to reach smaller buildings that are often too small for most Federal Energy Management Program (FEMP) contractors.

The ICP system and its Investor Ready Energy Efficiency™ (IREE) certification addresses many of the core issues that have made it hard to scale energy efficiency across diverse portfolios of buildings. By standardizing how projects are developed and reviewed, it becomes easier to roll out efficiency with confidence, ensuring consistent quality with lower transaction costs. The ICP system specifically works to increase investor and building owners confidence in the financial and environmental performance of commercial and multifamily buildings.

ICP’s recognition by the GSA advisory group follows on the heels of a report from a committee of Canada’s House of Commons, the Canadian Federal Standing Committee on Finance, that also included ICP as a tool to drive opportunities for targeted retrofit investments for federally funded buildings. The report, “Driving Inclusive Growth: Spurring Productivity and Competitiveness in Canada,” encourages projects to embed ICP as a requirement in the Low-Carbon Economy Fund, the Canada Infrastructure Bank and the National Housing Strategy, three of the central Canadian governmental programs to address energy use in buildings.
​
This combined effort is an indication of ICP’s ability to deliver a consistent approach to energy efficiency retrofitting across markets. Having a standard framework that is consistent in the United States and Canada will help create a more efficient market that will benefit building owners, investors and the efficiency industry. To learn more about ICP and IREE certification, visit the ICP website or contact us via email.

The Canada Green Building Council (CaGBC) is pleased to see the Federal  Standing Committee on Finance pre-budget consultation report (Driving Inclusive Growth: Spurring productivity and competitiveness in Canada) includes recommendations for zero carbon buildings, targeted retrofits for federally-owned buildings and green skills development.
​
Among recommendations originally proposed by CaGBC, the Government is specifically recommending adopting zero carbon building standards and creating opportunities for targeted retrofit investments for federally-owned buildings. To this end, the government says it should buy zero carbon technology in bulk, and embed the Investor Confidence Project (ICP) as a requirement in the Low-Carbon Economy Fund, the Canada Infrastructure Bank, and the National Housing Strategy.

The Federal recommendations also include targeted investments in skills development to strengthen apprenticeship and training programs in order to ensure sufficient labour resources to meet the evolving needs of the economy, including support for green trades.

“We are encouraged to see our recommendations supported in the Standing Committee’s pre-budget consultation report,” says Thomas Mueller, President and CEO of the CaGBC. “In recognizing the importance of green jobs training, building investor confidence in retrofits, and pursuing zero carbon performance, the federal government is demonstrating leadership in the development of Canada’s low carbon economy. We look forward to continuing our work with the Government to deliver on these efforts.”

In May 2017, CaGBC released Canada’s first Zero Carbon Building Standard, a world-class program that positions Canada as a global leader, offering designers and operators the opportunity to make carbon reduction the key indicator for building performance.

Spearheaded in Canada by CaGBC, GBCI and MaRS Discovery District, ICP is a global underwriting standard for developing and measuring energy efficiency retrofits. Its Investor Ready Energy Efficiency certification (IREE) signals to investors that a project has adopted best practices that can help reduce transaction costs and increase savings. The protocols offer investors a consistent roadmap for assessing risk and expected outcomes from deep retrofits.

CaGBC’s Education Strategy is focused on increasing capacity in the Canadian green building industry through the development and delivery of specialized education, including zero carbon building education. CaGBC offers zero carbon building education for the trades through the delivery of its Green Professional Building Skills Training (GPRO). It also offers professional courses focused on CaGBC’s Zero Carbon Building Program.

The Canada Green Building Council (CaGBC), Green Business Certification Inc. (GBCI), and the Advanced Energy Centre at MaRS Discovery District (MaRS) announced today that they are working together to bring the Investor Confidence (ICP) Project and its Investor Ready Energy Efficiency (IREE) certification to Canada.

ICP is a global underwriting standard for developing and measuring energy efficiency retrofits and is administered by GBCI. Its IREE certification signals to investors that a project has adopted best practices that can help reduce transaction costs and increase savings. The protocols offer investors a consistent roadmap for assessing risk and expected outcomes from deep retrofits.

The IREE certification is currently being used by project owners, investors, engineers and insurance companies in North America and Europe. Energy efficiency programs such as Pacific Gas and Electric’s On-Bill Financing Program, the New Jersey Board of Public Utilities Pay4Performance Program, the Connecticut Green Banks Commercial Property Assessed Clean Energy program, the United Kingdom’s Carbon and Energy Fund and others are also applying the IREE certification.

In the Pan-Canadian Framework, the Canadian federal government recognized the role that retrofitting buildings will play in reaching Canada’s targeted emissions reductions. The CaGBC and GBCI are bringing ICP to Canada to facilitate the mass retrofits required to achieve these goals. The IREE-certified projects will provide clarity on the long-term performance of energy efficiency technologies and provide the necessary assurance required to create greater access to competitive financing which will be necessary to achieve retrofits on a large scale.

“As our recent A Roadmap for Retrofits in Canada report found, Canada’s existing building stock has the potential to reduce overall building emissions by up to 51 per cent by 2030. The biggest barrier for the industry and ownership is access to financing,” says Thomas Mueller, President and CEO of the CaGBC and GBCI Canada. “We believe that the ICP can play a critical role in the acceleration of Canada’s retrofit economy by instilling investor confidence in green retrofits and by providing a tested, ready-made tool that government and industry can leverage to accelerate uptake across the country.”

Supported by the Ministry of Energy in Ontario, the Advanced Energy Centre at MaRS is partnering with CaGBC and GBCI to pilot the ICP methodology for the Canadian market. The pilot will bring together a multi-sectoral group that includes owners, government, engineering firms, utilities and financial institutions with the goal of determining how ICP can help facilitate more retrofits in Canada. The pilots will also help inform the accreditation and certification services for Investor Ready Energy Efficiency projects, which will be delivered by GBCI Canada. 

 “The Advanced Energy Centre is pleased to play a role in introducing the Investor Confidence Project and supporting the IREE Certification’s launch in Canada,” says Shawn Peterson, Senior Associate of the Advanced Energy Centre at MaRS. “Our cities need innovative financing mechanisms for improving building performance at scale. Ontario’s large concentration of institutional real estate, financial capital and support to invest in low-carbon building solutions makes it an ideal market for investors.”

The next steps for the ICP program in Canada will be the recruitment of Canadian projects for IREE certification in February 2018, and then the initiation of a pilot in summer 2018. For more information on ICP in Canada, visit the MaRS Discovery District website.