The Investor Confidence Project was recently featured in an article by Intelligent Utility, a publication focused on connecting the utility sector with the smart grid and reality. We could not agree more with this mission.
The article takes a look at some of the key barriers associated with financing energy efficiency, and some of the key issues that the Investor Confidence Project addresses related to managing performance risk and creating a standardized approach to developing and measuring energy efficiency projects.
The Investor Confidence Project believes that an energy efficiency "investor" can be defined as any organization that receives a revenue stream derived from energy savings in return for taking a performance risk on energy efficiency projects. Utilities through rebates and rate payer incentives often become investors (sometimes unwillingly) in this context. As with other investor classes, the utilities are challenged by the need to make a project finance decision by the ability to accurately predicting ROI based on costs and benefits. In the case of utilities, evaluating returns based on cost avoidance for investments in grid capacity and reliability can be quite challenging. It is especially critical as they must not only determine how to allocate resources to ensure a maximum return fr rate payers, but they must above all ensure that every home and business will access electrical power reliably all the time.
Matt Golden, Senior Energy Finance Consultant with EDF, was interviewed for the article:
Once the marketplace reaches “a critical mass of deal flow and investors willing to commit capital,” more traditional market players such as investment banks and utilities may be eager to enter (or re-enter) the game.
Golden believes the winner of the marketplace game here will be the one who does the best job of catering to investors and project developers. And that doesn’t mean variety. It means security, stability, calm.
“Investors don’t want a choice of 31 flavors; they want vanilla,” he advised. “Creating a marketplace where investors can evaluate projects on an apples-to-apples basis is imperative. Once again, the precursor to this capability is the standardization of projects and datasets that allow for the analysis of credit, asset and performance risk factors. Establish an environment where investors feel that they can manage risk, and the market will thrive.”
Whatever marketplace ends up the winner, Golden sees a bit of underlying good news: All of them seem to understand that “standards cannot be proprietary, and consolidating the industry around common standards benefit all,” Golden noted.
The complete article can be read on the Intelligent Utility.
The article takes a look at some of the key barriers associated with financing energy efficiency, and some of the key issues that the Investor Confidence Project addresses related to managing performance risk and creating a standardized approach to developing and measuring energy efficiency projects.
The Investor Confidence Project believes that an energy efficiency "investor" can be defined as any organization that receives a revenue stream derived from energy savings in return for taking a performance risk on energy efficiency projects. Utilities through rebates and rate payer incentives often become investors (sometimes unwillingly) in this context. As with other investor classes, the utilities are challenged by the need to make a project finance decision by the ability to accurately predicting ROI based on costs and benefits. In the case of utilities, evaluating returns based on cost avoidance for investments in grid capacity and reliability can be quite challenging. It is especially critical as they must not only determine how to allocate resources to ensure a maximum return fr rate payers, but they must above all ensure that every home and business will access electrical power reliably all the time.
Matt Golden, Senior Energy Finance Consultant with EDF, was interviewed for the article:
Once the marketplace reaches “a critical mass of deal flow and investors willing to commit capital,” more traditional market players such as investment banks and utilities may be eager to enter (or re-enter) the game.
Golden believes the winner of the marketplace game here will be the one who does the best job of catering to investors and project developers. And that doesn’t mean variety. It means security, stability, calm.
“Investors don’t want a choice of 31 flavors; they want vanilla,” he advised. “Creating a marketplace where investors can evaluate projects on an apples-to-apples basis is imperative. Once again, the precursor to this capability is the standardization of projects and datasets that allow for the analysis of credit, asset and performance risk factors. Establish an environment where investors feel that they can manage risk, and the market will thrive.”
Whatever marketplace ends up the winner, Golden sees a bit of underlying good news: All of them seem to understand that “standards cannot be proprietary, and consolidating the industry around common standards benefit all,” Golden noted.
The complete article can be read on the Intelligent Utility.
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