new business models for financing energy … commons energy seeks to achieve deep energy savings in...
TRANSCRIPT
Purpose:
Commons Energy seeks to achieve deep energy savings in small and medium‐sized unserved buildings in 4 market sectors serving a public purpose.
Result: Energy, economic, and carbon gains
Method:
Four‐part set of integrated services offering comprehensive, whole‐building, client‐based solutions to existing barriers
Approach:
Deepens and extends the ESCO model of future savings to fund improvements, replacing objective of public benefit to traditional private returns
Project FinancingModel:Bundles projects into portfolios, matches “patient capital” (long term, low rates) with portfolios
Additional resources
Open source information about Public Purpose ESCO’s:www.ppescohowto.org
Commons Energy L3C (www.commonsenergy.com)
PPESCO Overview
• “Deep energy savings for the buildings we all use”
• Underserved markets
• Unserved buildings• Project size• Project scope
Public-Purpose Markets
PPESCO Overview
• Comprehensive energy services
• “Energy‐only” or as part of new construction or rehabilitation
• Performance‐based, with full construction management
• Guaranteed energy savings
PPESCO Overview
• Energy improvements financed by energy savings
• Long‐term patient capital from mission‐aligned sources
• Term v. rate
Positive Cash Flow for Client
PPESCO Overview
• Going deeper than the traditional ESCO model
• Increase investment in building via lower ROI needs of PPESCO
Different ROI Needs Different Investment Decisions
PPESCO Overview
• Projects bundled into portfolios
• Capital aligned by affinity
• Each portfolio an LLC
• PPESCO L3C* sources capital and manages projects
* L3C = low‐profit limited liability company
PPESCO Projects
• Four market sectors – all underserved• Education• Health care• Municipal & community • Multifamily housing
• Energy projects ranging from $100,000 to $800,000
• Project types• “Energy only”• New construction / rehabilitiation
• Competition – the “but-for” test
PPESCO Long Term
• Multiple PPESCOs• Some level of central organization
• Quality control• Data• Financing
• Transform the market• “Mind the gap”• Access large pools of capital