A $200 Million Week for Energy Efficiency Financing

Jan. 23, 2014
It was a big week for energy efficiency financing. Joule Assets announced a $100 million private equity fund to finance small to medium projects. Kilowatt Financial and Citi, meanwhile, partnered on another $100 million fund to help homeowners finance energy efficiency improvements.

Big news on energy efficiency financing this week on two fronts.

Joule Assets launched a $100 million private equity fund that will invest in energy efficiency and demand response markets worldwide.  Joule described the fund as a first-of-a-kind that creates channels into the previously closed $900 billion energy reductions assets markets.

“In the simplest terms, we’ve created an investment fund that will expand financing for energy efficiency. On a grander scale, we believe that we have designed a fund that will aim to achieve the returns of top-performing private equity funds,” said Mike Gordon,  Joule Assets CEO. “We anticipate that our fund will tap into pre-existing marketplaces and for the first time provides investors—in addition to utilities—a way to benefit from those gains.”

Called the Joule Energy Reduction Assets Fund, it aims for a portfolio based on technologies “that can tangibly demonstrate energy savings,” Gordon said. He used as examples building controls, programmable thermostats, LED lighting, automated demand response and HVAC.

“By aggregating small and medium efficiency projects targeting the $50k-500K range, Joule’s ERA Fund streamlines project finance, making available financing features like performance-backed insurance and medium term service-based investments to the ERA Fund’s investors,” he said.

Meanwhile, Kilowatt Financial said it recently closed a $100 million debt facility from Citi to finance 10-12 year unsecured loans for homeowners for up to $30,000. The loans can be used for a range of improvements: HVAC, water heaters, windows, roofing, insulation, lighting, and energy efficient appliances.

The idea is to securitize a pool of loans into the capital markets and help establish a secondary market and scale for energy efficiency. Kilowatt and Citi expect to create term asset-backed securities from the loans, making more capital available for additional homeowners to upgrade their homes.

About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is an award-winning writer and editor who specializes in the energy industry. She is chief editor and co-founder of Microgrid Knowledge and serves as co-host of the publication’s popular conference series. She also co-founded RealEnergyWriters.com, where she continues to lead a team of energy writers who produce content for energy companies and advocacy organizations.

She has been writing about energy for more than two decades and is published widely. Her work can be found in prominent energy business journals as well as mainstream publications. She has been quoted by NPR, the Wall Street Journal and other notable media outlets.

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