18 June 2013 — An inventor of the renewable energy certificate has created a new tool to incentivise energy efficiency upgrades in commercial buildings.

The metered energy efficiency transaction structure, or MEETS, is designed to remove conflicts between landlords, tenants, investors and electricity providers that could hinder energy efficiency retrofits, EnergyRM chief executive Rob Harmon told greentechmedia.

“Let’s say a utility customer wants to invest in efficiency,” the article says. “A MEETS starts with a simple meter installed on that customer’s building by EnergyRM to measure energy use and normalise the data. That provides the baseline for energy consumption.

“Next, an investor is brought in to finance a project on the building. Much like a third-party solar lease, the investor ‘rents’ the building for installation of energy-efficient equipment and compensates the owner with a monthly payment.

“Once that energy-efficient equipment is operating, EnergyRM is able to measure the baseline consumption data against the efficiency savings, thus establishing the ‘metered energy efficiency.’

“The utility then charges the building owner for electricity based upon the baseline data, just as it normally would without the efficiency upgrade. (Again, the building owner is getting a monthly rental payment from the investor, rather than going through the utility.) The investor who owns the energy efficiency project gets paid a premium by the utility over a twenty-year contract for each kilowatt-hour of metered energy efficiency, or ‘negawatts’, delivered.

“The utility can then turn around and sell those energy reductions into the capacity markets or energy markets and get compensated for not having to build a new power plant.

“So what does this mean?

“It means the building owner – who receives monthly rental payments from the investor, continues her same relationship with the utility and has a more valuable building – theoretically has no disincentive to upgrade the facility.

“It means the investor – which has a stable twenty-year agreement with the utility based on performance – has every incentive to maintain and deepen energy savings.

“And it means the utility – which gets fully compensated for the electricity sold to the building owner and can treat efficiency like a power purchase agreement for any other generation source – is ‘made whole’ by the structure.”

Read the full story here.

One reply on “Novel financing tool could revolutionise energy upgrades”

  1. The way I have understood this, the savings are based upon a current bench-line, 2013, so lets move forward just 10 years, major building plant equipment is more efficient, power infrastructure has been up graded to deliver power more efficiently, most buildings are now at say 3.0 nabers rating as an average (currently we consider 2.5 as the average) and the overall sustainability practices are now legal requirements as opposed to incentives, where does that leave the investor?
    The Sustainability practices and legislation of 2013 will improve and accelerate as direct and indirect benefits begin to crystallize into returns for existing buildings and their owners. the “norm” will be another level up from what it is today.

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