Financing the upfront investment

Eric Woodruff raises a concern that “several surveys show that lack of capital remains the primary barrier to approving energy management projects.  Even if a project has a 50% Return on Investment (or approximately a 2 year simple payback period), there is no “return” if a company cannot make the initial investment.”

The problem as he sees it is that:

  1. many professionals are not aware, or do not have the skills, to effectively navigate their financing option
  2. industry lacks competent professionals who can package deals in a way that is attractive to investors
  3. professionals must understand their options to fund an energy project

Woodruff discusses the two common methods for funding,Traditional Financing & Performance Contracting and then summarizes 4 new options that may help address the problems he has identified above.  Despite these newer options Woodruff states that facilities managers need to know where to look and how to leverage the information.  Additionally, he emphasis education and training in performance contracting and finance.


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