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.