This report is a guide to all customer-facing financing products—products offered by a lender directly to a borrower—used to pay for energy efficiency. Intended for state and local governments that are deciding whether to start a new program, tune up and existing program, or create a Green Bank, it provides information on the full range of financing product options for target participants, the tradeoffs of various products, and potential advantages and disadvantages for different types of customers.

The benefits of energy efficiency extend beyond energy savings. Homes, commercial buildings, and industrial facilities gain comfort, health, and safety benefits from energy efficiency programs. Additional benefits for businesses include savings on maintenance, materials, and the costs of regulatory compliance. On the supply side, electric utilities enjoy reduced system costs. Focusing on the residential, business, and utility sectors, this report examines each of these multiple benefits, their role in program marketing, and current best practices for including them in cost-effectiveness testing.

Reviews and summarize energy efficiency financing models and strategies. Models are analyzed according to funding sources, program structures, limits to scale, repayment vehicles, and project risks. Strategies consider applicable building sectors, models, levels of establishment, growth potential, advantages, and disadvantages.