Clean energy deployment: addressing financing cost

Abstract

New methods are needed to accelerate clean energy policy adoption. To that end, this study proposes an innovative financing scheme for renewable and energy efficiency deployment. Financing barriers represent a notable obstacle for energy improvements and this is particularly the case for low income households. Implementing a policy such as PACE-property assessed clean energy-allows for the provision of upfront funds for residential property owners to install electric and thermal solar systems and make energy efficiency improvements to their buildings. This paper will inform the design of better policies tailored to the creation of the appropriate conditions for such investments to occur, especially in those countries where most of the population belongs to the low-middle income range facing financial constraints.

Barriers to the adoption of photovoltaic systems: The state of the art

“…The high costs of PV installation are mentioned in many studies that are based in several countries, such as South Korea, Greece, and the US [19,51,55,60]. Examples are spread over both off-grid, e.g., in Ethiopia [10] and Senegal [44] and on-grid applications, e.g., in Italy [52] and the US [61]. These discussions also include third-party owners [62].…”

Can the US keep the PACE? A natural experiment in accelerating the growth of solar electricity

“…As PACE costs nothing to taxpayers, we conclude it is a cost-effective way to increase PV installations and, if deployed more widely, could help to meet US' renewable electricity generation targets. Also, the long repayment period and the transferability of the payments allow property owners to invest in deeper energy savings and renewable projects compared with existing alternative financing options [24,25], without hurting residential mobility.…”

Innovations in financing that drive cost parity for long-term electricity sustainability: An assessment of Italy, Europe's fastest growing solar photovoltaic market

“…If the property is sold before the end of the repayment period, the new owner takes over the remaining special tax payments as part of the property's annual tax bill. This allows for longer repayment periods than many other financing options, making these investments more affordable for property owners (Ameli and Kammen, 2012;Fuller et al, 2009aFuller et al, , 2009b. PACE thus addresses the high initial cost of installing solar PV and the concern of some property owners that they will not get the full benefit of their investment if they sell the property.…”

“…This mechanism would enable households to access financing for energy-efficiency improvements or renewable energy technologies, thanks to government guarantees. Local government acting as an intermediary to guarantee repayment of private loans would mitigate the first cost for energy retrofits (Ameli and Kammen, 2012;Fuller et al, 2009a).…”

“…investments very attractive in terms of rate of return on investment (ROI). A high ROI means that the investment gains given by electricity savings, FiT incentive and a contribution based on the difference between injections and withdrawals of electricity into the grid (net metering scheme), exceed the investment cost and future costs, such as maintenance costs (Ameli and Kammen, 2012). According to International Energy Agency forecasts, however, PV is projected to cover 5% of global electricity consumption by 2030, rising to only 11% by 2050 (IEA, 2011a(IEA, , 2011b(IEA, , 2011c.…”