TBL Fund’s founding was informed by the lack of energy financing and of financiers who understand energy financing (vs. traditional debt financing) and the disproportionate impact of this lack on multifamily affordable housing (MFAH). It understands that accessing financing for energy efficiency, renewable energy, and water conservation projects can be challenging due to the sector’s diversity, complexity, and unique characteristics. To overcome barriers, TBL Fund offers innovative energy financing options including energy performance contracts (EPC), property-assessed clean energy (PACE), Energy as a Service (EaaS), and power purchase agreements (PPA).
- EPCs make it possible for Public Housing to access green upgrades. In this structure, an energy service company (ESCO) coordinates installation and maintenance of efficiency improvements and is paid from the energy savings. One challenge associated with EPCs is that they can require extensive energy engineering and modeling to receive approval. TBL Fund staff leverage expertise in affordable housing, finance, and clean energy technology. Further, it can rely on partnership with ICAST for energy engineering and modeling support.
- PPAs can allow MFAH owners to buy the electric output from an energy generation system that is installed, owned, and operated by a third-party developer. Most solar photovoltaics get financed with PPAs.
- EaaS is derived from Software as a Service (SaaS); it leverages flexibilities and best practices from other energy financing options and places financial burden, risk, and responsibility for servicing the installs with the industry experts/proponents of energy efficiency/renewable energy technologies.
- PACE programs allow commercial (C-PACE) and sometimes residential (R-PACE) property owners to make energy efficiency improvements to their properties by fully financing all upfront costs. Costs are then attached to property tax assessments and paid off over an extended period. Over the course of repayment, property owners often save enough on energy efficiency to more than cover the cost of the improvements. PACE does have certain challenges, such as a required approval from the first lien holder, which can cause many Financial Institutions to decline that approval.
These options can be customized to overcome historic barriers, including the inability to take on debt by offering off-balance sheet financing options. Green retrofits can reduce the operational costs and tenant turnovers, while increasing occupancy rates, leading to better net operating income. TBL Fund uses a blend of rebates, incentives, and financing to create the best solution for each of its customers.
Learn more: TBL Fund Blog | Triple Bottom Line Foundation