Smart infrastructure was the original topic of this blog. Smart grids, smart water, you name it! I'd like to come back to this topic with a fresh new angle. Financing. Aligning bottom line results with environmental change has always been a hurdle for clean technology solutions to achieve mainstream adoption. When you face a challenge, it is better to turn it into an opportunity. That is a trait of many entrepreneurs.
Project financing turned out to be a key innovation in the success of commercial and residential solar installations. I will meet Jigar Shah at the local energy symposium tomorrow. He invented the concept of Power Purchase Agreement (PPA) when he was at SunEdison. It had a profound impact on the growth of the solar industry. Last year, California approved Prop 39. The $1B-line-of-loans has spurred not only the greening but also the modernization of schools and university campuses. Energy efficiency is becoming a way to modernize old infrastructure: schools, farms, etc.
“These projects are critical because they allow farmers to continue production while reducing the amount of water and energy used,” said CDFA Secretary Karen Ross. Projects include water-efficiency modifications like drip and micro-sprinkler systems; energy-efficient water pumps that reduce GHG emissions; soil moisture sensors; and irrigation scheduling programs that apply water based on crop needs. Farming represents a significant source of GHG emissions according the Agricultural Sustainability Institute at UC Davis.
And State agencies are not the only ones to notice that energy efficiency can become a mechanism to finance retrofit projects. GSV Sustainability Partners provide capital to finance sustainability projects or products in markets that have little working capital. They focus on buildings, transportation and water. They get a return on their investments from the energy savings over time.