Better Buildings, an initiative of the Department of Energy that drives energy efficiency innovation across the nation, recently published its 2024 Progress Report. The report discusses the innovations in many sectors, notably financing, that drive the Better Buildings mission forward. TBL Fund is recognized in the report as a Climate Finance Innovation Award winner, an award given to Better Buildings partners that “go beyond current market practices.” In particular, the report cites TBL Fund’s work on a solar farm for the City of Aztec, New Mexico, and its work with the Santa Fe County Housing Authority.
Working with our affiliate organization, ICAST, we were able to conduct predictive financial modeling for the City of Aztec and provide financing through a bridge loan leveraged by post-project tax credit reimbursements for a 2MW solar PV farm and a 4MWh battery storage facility. For a $2 million investment, $5 million in savings will be generated over the lifetime of the installations. In Santa Fe, ICAST and TBL Fund collaborated to help the Santa Fe County Housing Authority implement deep energy solutions in 40-years old deteriorating public housing. TBL Fund provided over $1 million in financing, while ICAST acted as the general contractor, enabling upgrades like solar PV installations, weatherization, and furnace replacements.
Other award recipients included BlocPower and Ecosave Inc. BlocPower manages retrofit projects for small- and mid-sized buildings, including multifamily residences, commercial properties, and community centers. Like TBL Fund, BlocPower focuses on low- to moderate-income households and strives to provide financing which requires little or no upfront costs, which it supplies through off-balance-sheet (OBS) financing. BlocPower was nominated for its use of OBS to electrify a historic building housing low- to moderate-income residents. Since its founding in 2014, BlocPower has completed over 5,000 energy efficiency and electrification projects. The organization’s commitment to OBS financing and its explosive success suggest the critical need for OBS financing in the multifamily affordable housing market, as the properties in this sector often have high debt burdens and few or no assets available to leverage for traditional debt financing. This innovative use of OBS, often leveraging tax credits and other post-project federal and state incentives, is key to achieving deep energy retrofits in multifamily affordable housing.
Ecosave is an “Efficiency-as-a-Service” firm offering turnkey services. This innovative model means that, in addition to OBS financing, Ecosave’s clients use a portion of their savings from new energy efficiency upgrades to pay for service fees and leverage upfront capital. This “Ecosave Services Agreement” contract system allowed Ecosave to fund “over $6 million worth of building improvements for a senior living partner at three locations.” Because Ecosave recoups costs and service fees through the energy and water efficiency of its retrofits, the firm can drive deep energy savings in every project: The aforementioned senior living project will reduce energy costs by 30% over the 15-year lifespan of upgrades. This Efficiency-as-a-Service model is another key example of innovative financing that drastically lowers the barriers to entry for MFAH that serves disadvantaged populations, showcasing the need to change how we approach green financing when pursuing equity.
In the era of Bipartisan Infrastructure Law and Inflation Reduction Act funding, innovative green financing products and collaborations are essential to executing scalable and replicable retrofit projects. A white paper recently published by the American Council for an Energy-Efficient Economy, titled “Retrofitting America’s Homes: Designing Home Energy Programs that Leverage Federal Climate Investments with Other Funding,” stresses the importance of partner collaboration in the future of green energy financing and project execution: “Progress is made when meaningful exchanges occur between partners, industry experts, and national laboratories to tackle common challenges and share best practices.” TBL Fund believes that innovation and collaboration, particularly in green financing, is the future of decarbonization and deep energy retrofits.