Bottom Line on Public-Private Finance Tools for Energy Efficiency

The guide details five financial tools to facilitate energy efficiency: on-bill financing, Property Assessed Clean Energy (PACE) financing, Sustainable Energy Utility (SEU) models, loan guarantees, and loan loss reserve funds. It highlights how public investment can reduce lender risk to mobilize private capital, providing specific examples from the United States, Canada, and China.

• On-bill financing allows energy efficiency loans to be repaid via a utility bill line item, reducing lender risk. In the Connecticut Energy Efficiency Fund’s Small Business Energy Advantage Program, over 25% of United Illuminating's small business customers participated, with eligibility based on payment history rather than credit checks.
• Commercial Property Assessed Clean Energy (PACE) financing secures loans with a tax lien on the property, resulting in lower interest rates and terms typically ranging from 5–20 years. To avoid conflicts with mortgage underwriters, commercial PACE programs require property owners to obtain consent from mortgage holders if the PACE loan has priority repayment.
• A Sustainable Energy Utility (SEU) acts as a "one stop shop" to coordinate financing and technical services. Examples include Efficiency Vermont, founded in 2000 and funded by a "wires charge" on kWh sold, and Delaware's SEU, which can award rebates and issue tax-exempt bonds for a Sustainable Energy Revolving Fund with interest rates of 3.5–5%.
• Loan guarantees and Loan Loss Reserve Funds (LLRF) mitigate risk for banks unfamiliar with energy efficiency technologies. While a guarantee relies on the credit of an institution, an LLRF requires actual money in an escrow account. The China Utility-Based Energy Efficiency (CHUEE) program, using a $USD 50 million LLRF from the GEF and IFC, aims to mobilize $USD 0.7-1.45 billion in private sector financing.

APA

World Resources Institute (n.d.). Bottom Line on Public-Private Finance Tools for Energy Efficiency. https://www.wri.org/research/bottom-line-public-private-finance-tools-energy-efficiency

Chicago

World Resources Institute. Bottom Line on Public-Private Finance Tools for Energy Efficiency. n.d. https://www.wri.org/research/bottom-line-public-private-finance-tools-energy-efficiency.

Wikipedia

{{cite report |author=World Resources Institute |title=Bottom Line on Public-Private Finance Tools for Energy Efficiency |url=https://www.wri.org/research/bottom-line-public-private-finance-tools-energy-efficiency |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitutendbottom, author = {{World Resources Institute}}, title = {{Bottom Line on Public-Private Finance Tools for Energy Efficiency}}, institution = {World Resources Institute}, url = {https://www.wri.org/research/bottom-line-public-private-finance-tools-energy-efficiency}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }