What are the opportunities available to citizens, businesses and the public administration for financing of energy efficiency measures? And how are the various tools currently used?
In principle today i energy efficiency financing they are divided into public financing and other types of financing. Among the first are the European Energy Efficiency Fund (FEEE), the European Local Energy Assistance (ELENA), the European Regional Development Fund (ERDF), the Regional Calls and Horizon 2020.
Between energy efficiency financing 'Non-public' instruments include various instruments such as project bonds, bank loans, mini-bonds, advance payments on energy efficiency, installments on bills, project financing and equity crowdfunding.
Public energy efficiency funding
- FEEE. The European Energy Efficiency Fund is an initiative launched in July 2011 on the basis of a public-private partnership between: European Commission, European Investment Bank, Cassa Depositi e Prestiti. The public administration can use it: non-repayable for preparatory activities, debt for operational activities (the interest rate is defined based on the risk of the project).
- ELENA. The European Local Energy Assistance is a program launched by the European Commission and the European Investment Bank. The public administration can use it for preparatory activities.
- ERDF. The European Regional Development Fund is an initiative of the Veneto Region that provides structural funds with a duration of 7 years. Small and medium-sized enterprises can use it for energy efficiency investments in production processes. It is a non-repayable fund for the preparatory activities, a debt (with variable interest rate) for the operational ones.
- Regional Calls. Currently there are those of Trentino Alto Adige, Basilicata and the Emilia Romagna Energy Fund (to be checked from time to time). These are programs undertaken by regional administrations to support the dissemination of energy efficiency interventions (they are not structural funds like the ERDF). Recipients are companies for the Trentino and Emilia Romagna tenders, private individuals in the case of Basilicata. Non-repayable funds for Trentino and Basilicata (preparatory and operational activities), while the Emilia Romagna Energy Fund is payable.
- Horizon 2020. It is a non-repayable funding program directly managed by the European Commission. It goes to finance initiatives with a marked innovative content. Recipients are the public administration and businesses. For info: Horizon 2020
Non-public energy efficiency financing
- Project bond. These are purpose bonds issued by companies that carry out a project to finance its completion. The target is institutional investors and the repayment depends on the cash flows that the project is able to generate.
- Bank loan. It is the classic loan of money that an authorized credit institution or company grants to another economic entity under the constraint of repayment (at equal value or with interest). It is used by businesses and individuals, especially in the form of a subsidized rate compared to other types of financing.
- Leasing. It is a lease of the goods purchased either from the lessor or on the instruction of the tenant who assumes all the risks, and with the latter's right to become the owner of the leased assets at the end of the lease. It is a tool for businesses and individuals.
- Mini-bond. These are bonds that allow companies to obtain liquidity from the stock market even when they are not structured in Spa, do not invoice more than 2 million euros and do not have a rating. The rules are in the decree law 83/2012.
- Advance of Energy Efficiency Certificates. It consists of an agreement between a person qualified to obtain Energy Efficiency Certificates (TEE) and the customer of the energy efficiency intervention. The customer obtains from these subjects a part of the capital necessary to carry out the energy efficiency intervention (usually 25%). It is a tool aimed at businesses.
- Installments in the bill. This is an agreement between the utility that deals with the supply of energy and the customer affected by the energy efficiency intervention. The utility takes care of financing the intervention (even at 100% of the value) and is repaid in periodic installments accounted for directly in the bill. It is aimed at individuals, but could also find application in the business world.
- Project Financing. It consists in the creation of a project company that collects the capital of the different investor subjects. Within the company there are developers who plan the project and lenders who hold shares. It is used by the PA subjects in the form of equity, such that the person providing the loan becomes a shareholder.
- Equity Crowdfunding. It is a micro-financing practice that involves groups of investors who use their capital to finance energy efficiency initiatives. In Italy, crowdfunding is allowed to innovative start-up companies according to Law Decree 179/2012.