by Brianna Crandall — January 29, 2016—As renewable energy sources and sustainable building technologies grow, the functionality, financial performance and resilience of the built environment in the United States is increasingly linked to the energy sector, according to a new report released by the National Institute of Building Sciences (NIBS) during its annual conference and expo, Building Innovation 2016, held in the DC area.
The Institute’s Council on Finance, Insurance and Real Estate’s (CFIRE) new report, Financing Energy-Efficiency and Renewable-Energy Projects, examines the current and potential roles of three key equity investing structures in capitalizing the sustainable and energy-efficient development and retrofit of investment-grade commercial buildings and renewable-energy production.
The report evaluates the effectiveness of these vehicles — Real Estate Investment Trusts (REITs), Master Limited Partnerships (MLPs) and Yieldcos — in accessing the public capital markets, and recommends needed legislative and regulatory changes.
This examination, which CFIRE accomplished through a committee of member experts, is particularly important in light of the need to conserve limited government resources, notes the Institute. In the current era of federal, state and local spending constraints, the private sector is financing the bulk of the capital required for renewable energy projects and the development and retrofit of energy-smart commercial real estate.
However, government can implement policies to help drive this private-sector investment. Financing itself is not sufficient to expand investments in building energy efficiency and renewable energy, according to NIBS; access to public capital markets is the most efficient way to stimulate the next generation of investment activity, and paves the way for the development of robust secondary markets.
Through the report, which includes an overview of the current funding environment in the USA, recommendations for government agencies and other stakeholders, and figures and sidebars to illustrate important concepts, CFIRE serves to illuminate key elements for consideration by policymakers seeking to improve access to the public equity markets for the renewable energy industry and the development and retrofit of energy-efficient and sustainable commercial buildings.
The Institute says such access would enhance the cost-effectiveness of these sectors and enhance the nation’s energy security and economic resiliency.
The Financing Energy-Efficiency and Renewable-Energy Projects report is available from the Institute’s Web site.
