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Energy Efficiency Finance For Commercial Buildings: Insights From Lenders

Energy  Efficiency Finance For Commercial Buildings: Insights From Lenders Download PDF
Publication Date: 2016 Author: Leonard Kolstad Program Area:Finance & Real Estate

While innovative financing mechanisms such as Property Assessed Clean Energy (PACE) have garnered more attention in recent years for facilitating investment in building energy efficiency,  these niche energy efficiency products comprise only a small fraction of the overall commercial real estate loan pool. Far greater involvement from the commercial banking industry is needed to scale up energy efficiency finance solutions and attain the potential level of investment that exists. 

Some experts have argued the barrier to greater investment in energy efficiency is a lack of building owner demand, while others point to financial barriers, particularly for older Class B and C buildings. IMT explored this complex issue by conducting a survey of 30 national, regional, and local commercial lenders, with results shared in our new report, "Energy Efficiency Finance for Commercial Buildings: Insights From Lenders."

While lenders may not often perceive benefits to financing energy efficiency projects, this report describes how energy efficiency can lower lender risk and explores opportunities to increase their willingness to finance such projects.