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Financing Deep Energy Retrofits

Owners, investors, and occupants will naturally think of retrofit financing differently, depending on their unique circumstances. Below we list several retrofit financing mechanisms, both time-tested and emerging. The issues with energy efficiency financing are highly dynamic, with new policy and innovative business models constantly emerging. Check back on this page frequently or follow us on twitter as we will be making updates to stay on top of the most recent options and programs.

Financing Mechanism

Next Step
Loans Allows for flexible spending, yet building owner's debt capacity is reduced; significant down payment is required
Contact a lender, or seek out low-interest loans from your state, municipality, and utility at DSIRE
Bonds Generally a public-sector organization issues a bond; approval time can be quite long but interest rate is low
Contact a lender, or seek out bond programs at DSIRE


Operating Lease Building owner rents equipment; at end of lease the owner can renew/renogiate the lease, or purchase or return the equipment
Talk to an experienced financial professional
Capital Lease Building owner rents equipment and ownership is almost always transferred at the end of the lease term; down payment (which can be zero) is always much less than a loan
Talk to an experienced financial professional
Performance Contracting Financing arranged
by an

Very little hassle for building owner since financing is fully managed and implemented by the ESCO
See the BOMA and Clinton Climate Initiative toolkit

Emerging Mechanisms


 PACE Local government issues bond to pay for efficiency project; bond is repaid by building owner via property tax; more information

Go to DSIRE to find PACE programs in your region
On-bill Financing Utility, state or 3rd party funds efficiency project and collects repayment via utility bill; repayment can be fixed to the property in the event of ownership transfer; more information
Go to DSIRE to find on-bill financing programs in your region
Energy Services Agreement Similar to a power purchase agreement, except for energy efficiency and not
renewable energy; no upfront cost; see Metrus Energy for example

Contact the product provider

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