ICP Helps Programs, Financiers, and Green Banks Lower Transaction Costs and Engage the Market

Energy efficiency financing and utility are entrusted to deliver a steady flow of quality projects while protecting participants and maximizing program resources. Because projects are heterogeneous and there have been a lack of consistent standards to define what is industry practice, this process of technical due diligence historically leads to significant transaction costs and project delays.
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The ICP Protocols provide a ready-made set of technical standards consisting of accepted industry standards and best practices, and a robust but streamlined third party system to verify project compliance. They serve as a standardized roadmap for how projects should be engineered to ensure that saving projections are reliable.

As a program or financing entity, you can focus on the types of projects and paybacks that best fit your needs, and rely on the ICP Investor Ready Energy Efficiency (IREE) certification to replace custom rule books, in house or outsourced engineering, and the need to support developers in their journey. All you need to do is look for the IREE certification, and you know the project meets industry best practices and has been reviewed by a Proffessional Engineer, overseen by GBCI, the global purveyor of building certifications such as LEED.

GBCI is also here to support training and outreach to project developers and QAA in your local markets, to supplement our robust set of current users who will immediately be ready to conduct business under your program due to the uniform nature of ICP requirement and process.

Program Implementation Process

Utilizing the global ICP standard and certification system to streamline your program or financial instrument dramatically reduces your work load as an implementor, and GBCI ICP staff are hear to support you at every step.
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1. Specify the use of ICP IREE certified projects as your technical project requirement
2. Define your own underwriting criteria (savings, GHGs, etc.)
3. Define key requirements such as (but not limited to)
   1. GHG accounting
   2. Certification Timing
   3. Post-Certification Changes
4. Work with GBCI to outreach and train project developers and quality assurance accessors
5. Approve certified projects
6. Track implementation and project performance as reported by the project devloper.

Unique benefits for your program
For any program focused on promoting commercial and multifamily energy efficiency investments, ICP enables an efficient means to ensure the quality of projects, conserve program resources, and increase program uptake. Specific benefits include:

• The ICP Protocols are standardized and market-tested technical requirements that eliminate the overhead associated with developing and maintaining proprietary technical requirements conserving scarce program resources.
• Adopting nationally recognized ICP Protocols as a technical requirement standard streamlines deployment by reducing the time and effort associated with committee driven development of proprietary requirements.
• ICP’s Investor Ready Energy Efficiency (IREE) certification is awarded to compliant projects through independent verification. This nationally recognized certification increases the confidence of owners, investors, regulators, and all stakeholders in the quality of engineering and the predictability of projected energy savings resulting in increased project approval rates.
• ICP credentialed providers, investor network, and partner programs make up a nationwide network of organizations that leverage ICP’s standardized procedures and documentation to deliver quality projects with streamlined development and reduced transaction costs. ICP can work with programs to incorporate this ready-made network into their partner structure to provide participants additional quality investment and development providers.
• The IREE certification process enables programs to utilize a market based approach to streamlined technical review by leveraging the experienced engineering firms that make up ICP’s Credentialed Quality Assurance Providers program. ICP can work with programs to develop local providers or leverage existing providers to implement a variety of quality control methodologies including market-based review.

• Programs are increasingly expected to protect program resources and ensure the success of projects. IREE certification is a recognized mark of project quality in the industry and the ICP System lets programs provide a definitive roadmap to ensure participants’ projects deliver intended results.
• Programs adopting ICP join a growing legion of programs, investors, developers, and other stakeholders that are committed to promoting standardization across the industry. Continuing market adoption of ICP and the network effect it creates will enable the energy efficiency industry to transform into a data-driven marketplace with a critical mass of projects defining a new asset class.

Customizable to tailor-fit your program
The Investor Confidence Project (ICP) can help accelerate a range of public programs focused on encouraging investment in energy efficiency. ICP’s flexible structure allows for effective and straightforward integration with a wide array of programs including, but not limited to utility incentive programs, state/local government utility programs, PACE programs, On-Bill-Finance programs, Pay-for-Performance programs, Benchmarking programs, and market transformation programs such as Architecture 2030 and Better Building Challenge. Depending on the program and its goals, maturity, resources, and processes, there are a number of ways to customize the integration of ICP. For simplicity sake, these can be broken down into the following categories and implementation approaches:

Green Banks and GGRF.  Utilize the ICP IREE certification to get to market quickly with the overhead of technical development, by leveraging global standards and a system to certify project for technical underwriting. Leverage ICPs deep bench of providers and proven methods to start deploying capital quickly and lower transaction costs for all parties. Help create a standard asset class that will facilitate future securitization and private capital.

New or Emerging Incentive Programs. The defining factor for these programs is their ability to mandate technical requirements and their control over access to financial incentives or financing options. Typically these programs may also require certain engineering practices (such as an audit) and/ or cost effectiveness requirements (also known as SIR or Bill Neutrality Requirements). For such programs, adopting the ICP Protocols as a required technical standard can substantially reduce the resources associated with developing and maintaining proprietary requirements especially the significant review and stakeholder approval process that can add significant cycles to program development. Additionally, accurate cost effectiveness as well as M&V calculations require standards-based baseline and savings calculation development which ICP provides.

Mature Programs with Existing Technical Standards. Many successful programs are already operational and utilizing their own proprietary standards. Programs might benefit from transitioning from their proprietary standards for a variety of factors including high costs of maintaining standards, controversy about requirements, or the inability to address market innovation. For such programs, adopting ICP as an alternative compliance path in parallel with the existing standards provides the ability to maintain consistency and avoid program disruption while testing the benefits of ICP without creating uncertainty. This approach allows for a seamless transition to ICP’s nationally recognized technical standards and a more market based system for quality control.

Market Transformation Programs. For market transformation and other voluntary programs that encourage participation in energy efficiency programs through market and resource coordination but do not have the means to enforce cost effectiveness or engineering requirements, ICP as can provide significant benefits as a recommended best practice. Participating programs still gain significant benefits by referencing ICP tools and resources on a program's website/communications, educating participants through coordinated market outreach, and encouraging the use of the ICP System programs  which translates to higher quality projects, lower transaction costs, and more project approvals. For interested programs, the ICP team will work with each program to design a custom engagement plan t will encourage adoption of the ICP System as a best practice rewarding owners with more confidence in project performance and better access to a range of providers and investment options.

ICP in Action
Program managers around the world are becoming more aware of the benefits of utilizing the ICP system and the ease with which it integrates with programs. ICP provides a flexible framework that has allowed programs to implement the system in customized implementation models that yield unique value proposition for each program. ICP’s growing list of program partners includes Pacific Gas & Electric, the Connecticut Green Bank, the Texas PACE Authority, the San Francisco Department of the Environment, the New Jersey Clean Energy Program, Architecture 2030, and a number of committed European programs as well.

Pacific Gas & Electric (PG&E)
PG&E's new High Opportunity Projects and Programs (HOPPs) program for an On-Bill Financing Alternative Pathway program utilizes ICP Targeted Protocols to incorporate a new program framework that is planned to lower administrative costs, reduce approval times and increase the confidence of owners and investors in project outcomes. The program framework requires participating contractors to develop and document projects consistent with the ICP protocols which mandate specific baseline development savings calculations, commissioning, operations and maintenance, project M&V, and meter-based energy monitoring procedures. Following the framework results in more project approvals, sets up projects for success, and enables the measurement of project results.

The program provides OBF loans for small projects (as low as $5,000) yet PG&E wanted a review process that would ensure sufficient engineering rigor. ICP helps PG&E to satisfy these goals through its platform that enables market-based quality control process utilizing third-party certification. ICP’s certification process by independent providers is similar to how issuers of financial statements currently utilize Certified Public Accountants to audit and certify that financial statements are accurate and conform to standardized accounting rules. At the program’s inception PG&E has contracted with an ARUP, an ICP Credentialed QA Provider, to perform all technical review using ICP standards. This process is transparent for participants but results in quicker turnaround times and enables PG&E to scale quickly by using other ICP credentialed providers. It also will allow PG&E to transition to a fully market based quality review methodology and push review associated costs into the market in the future. This approach is consistent with the philosophy of leveraging private markets to scale program capacity resulting in reduced processing times and less program overhead.

PG&E’s Senior Product Manager, Peter Thompson, states that “ICP creates a standard that gives our customers confidence when making investments. Furthermore, wide scale adoption and acceptance of the ICP standard will support greater investment throughout the industry.”

Getting started with ICP
ICP collaborates with programs to craft a winning implementation strategy tailored to each program’s unique goals, structure, requirements, maturity, stakeholders and resources. The steps involved each program varies, but may include:

1. An initial fit analysis to identify ICP and Program alignment opportunities and challenges.
2. Selection of implementation methodology (required technical standard, alternative pathway, or recommended best practices) depending on program specifics.
3. If existing technical requirements exist, develop a gap analysis to evaluate and address differences between technical requirements and processes.
4. Determine which ICP Protocols will be incorporated into the program based on program requirements.
5. Identify strategy to integrate program’s delivery channels (project developers, contractors, installers and other service providers) with ICP Project Developer Credential program.
6. Evaluate quality control strategy to determine best approach for technical review. Review activities and certification may be executed by an internal program team trained by ICP, ICP Credentialed QA Providers (QAP) contracted by the program, with ICP QAPs using a marketplace approach, or any combination of the above.
7. Determine partnering plan including integration any current program partnerships with ICP Credentialed Providers and ICP Investor Network.
8. Develop program’s project workflow incorporating any interaction with ICP providers, the ICP organization, and ICP’s parent organization (Green Business Certification Incorporated).
9. Train program team and staff on relevant aspects of ICP Protocols and the ICP System.
10. Examine joint ICP/Program engagement plan for outreach and educating for local service providers, investors, and other stakeholders.
11. Examine the regulatory environment and, if necessary, determine engagement plan with regulatory or oversight organizations.
12. Determine opportunities, approach, and plan for joint public relations, media, website, and other awareness generation activities.
13. Design roll-out plan to introduce ICP to existing partners and stakeholders including helping to align ecosystem of providers including ICP Interconnect and other networking events.

Conclusion
It’s easy to become part of our growing network for programs who have elected to join forces and align standards through ICP.  The ICP team is happy to discuss what application of ICP makes most sense for your program and work to develop a go-to-market strategy customized for the unique realities of every program and location.  

Once the ICP Protocols are adopted either as program requirements, or a recommended approach, we will work with you and your local stakeholders to encourage interaction between origination channels, building owners, project developers, and investors.

Please contact the ICP Team to discuss how we can help align your program with emerging national standards, a growing network of investors, and an ever expanding group of public programs.