How to Attract Private Investment to Energy-Efficient Buildings? Follow the 5 “S’s”

The document outlines five key strategies for governments to foster private investment in energy-efficient buildings: ensuring policy stability, aggregating projects to achieve scale, adopting standardized certifications and data, tailoring approaches to different market segments, and implementing sequenced policy packages. It highlights that while investors see opportunities in energy infrastructure, they require predictable outcomes and reduced transaction costs to commit capital.

• Investors require policy stability and predictable returns to lend to building efficiency projects. Governments can create this stability by enforcing building energy codes to increase demand or by using risk-sharing agreements to guarantee repayment in new markets.
• High transaction costs often deter commercial financiers, who typically seek investments with a scale of approximately $10 million. Governments can overcome this by aggregating demand from multiple projects into pools to make them attractive to energy service companies.
• Standardization of project data and the use of recognized green building certifications (such as LEED and EDGE) help investors assess risks and bundles of projects more efficiently. Standardized data also enables the creation of secondary markets, which increases confidence in returns.
• Because the building market is fragmented across different property types and decision-makers, governments and NGOs must design mechanisms that address the specific motivations of different segments, such as the productivity concerns of businesses versus the comfort needs of homeowners.
• Long-term, sequenced policy packages are more effective than one-off policies. Combining mandatory energy codes with financial incentives, such as tax rebates, can attract both compliance-driven and opportunity-driven investments.

APA

World Resources Institute (2017). How to Attract Private Investment to Energy-Efficient Buildings? Follow the 5 “S’s”. https://www.wri.org/insights/how-attract-private-investment-energy-efficient-buildings-follow-5-ss

Chicago

World Resources Institute. How to Attract Private Investment to Energy-Efficient Buildings? Follow the 5 “S’s”. 2017. https://www.wri.org/insights/how-attract-private-investment-energy-efficient-buildings-follow-5-ss.

Wikipedia

{{cite report |author=World Resources Institute |title=How to Attract Private Investment to Energy-Efficient Buildings? Follow the 5 “S’s” |date=18 May 2017 |url=https://www.wri.org/insights/how-attract-private-investment-energy-efficient-buildings-follow-5-ss |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitute2017how, author = {{World Resources Institute}}, title = {{How to Attract Private Investment to Energy-Efficient Buildings? Follow the 5 “S’s”}}, institution = {World Resources Institute}, year = {2017}, month = may, url = {https://www.wri.org/insights/how-attract-private-investment-energy-efficient-buildings-follow-5-ss}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }