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Enigin News - Energy Efficiency Favoured for Funding

Commercial money is tight, but not quite as tight when projects involve increasing energy efficiency. Some innovative financing techniques are emerging to allow customers to make improvements without incurring initial out-of-pocket costs.

Energy efficiency has emerged as the most palpable and least controversial way to make environmental changes, although the time to earn a return-on-investment is often short, such projects are often sidelined until companies calculate ways to pay for them.

Policymakers and businesses are therefore joining forces to enable cost-effective implementation of energy-saving techniques.

While creative financing and governmental initiatives can be useful, customers will often still need access to loans from commercial banks and that remains problematic in many areas but not all.

Energy efficiency programs, however, are often encouraged with some lending institutions, as well as venture capitalists, who understand the potential. The former, for example, may realise that companies taking such steps reduce their overheads and become more profitable. The latter, meanwhile, understands the potential for growth.

"Energy efficiency is in the sweet spot of many venture capital investors in terms of skill sets and funding parameters, particularly given its basis in information technology," says John de Yonge, Americas Research Director of Cleantech for Ernst & Young. "Consequently, we may see investor participation in clean-tech broaden."

As a percentage of all such clean energy deals, energy efficiency financing grew from 24 percent in 2008 to 32 percent in 2009.

Tough lending policies along with an environmental awareness are prompting some states in the U.S. to actively promote energy efficiency. As an example is the California Energy Commission, which provides financing for schools, hospitals and local governments for both feasibility studies and the actual installation.

So far the CEC has made about $40 million available with some cases receiving 100 percent funding.

Energy efficiency projects are running into fewer policy hurdles than other ecologically-minded efforts, and now there are some creative ideas regarding financing that are favoured by both the public and private sectors alike. Some of those ideas are winning acceptance and may be seen more often in different countries.
In difficult financial times it is good to be involved in energy saving and efficiency.

Enigin Distributors, worldwide, can help private and public organisations benefit financially from the energy savings they make, but also to take advantage of low cost loans, initiatives and grants available in their regions for energy efficient products and solutions.

Tuesday 9th March 2010