Funding mechanisms
Market-based tools Delivery model Stakeholders involved in the delivery of the programme include: William Jefferson Clinton Foundation’s Clinton Climate Initiative, US Department of Energy (ARRA Funds), State of Arkansas Energy Office, State of Arkansas Governor’s Office, AmeriCorps VISTA, Little Rock Workforce Investment Authority, and the Central Arkansas Planning and Development District
The last type of financing mechanism analysed is market-based tools. These are still very much in their infancy but they provide an interesting view on how local energy efficiency markets could be developed. The case study below demonstrates an innovative market-based mechanism that has been set up in Australia. Victorian Energy Efficiency Target, Australia
Funding method
Victorian Energy Efficiency Target (VEET), Australia, 2009-present
The process is as follows: 1. HEAL provides technical assistance to companies that are planning to undertake commercial retrofit of the properties they own
Description
2. HEAL lends money to finance improvements at 0% interest
VEET is administered by the Essential Services Commission (ESC). The scheme was established under the Victorian Energy Efficiency Target Act 2007 and is administered in accordance with the Victorian Energy Efficiency Target Regulations 2008. It is legislated to continue in three-year phases until 1 January 2030.93
3. The company dedicates a portion of its energy savings as a result of the retrofit to a revolving loan fund 4. This revolving loan fund is available to its employees to identify and finance energy efficiency measures in their homes
The scheme operates by placing a liability on energy utilities in Victoria to surrender a specified number of energy efficiency certificates each year. These retailers can create certificates directly by undertaking 35 prescribed activities, or purchase certificates in a competitive market, or both.94
Employees repay debts to the fund through payroll deductions with the repayment schedule tied to savings realised through lower utility bills. Best practice guidance and lessons learned
Each certificate represents one tonne of greenhouse gas abated and is known as a Victorian energy efficiency certificate (VEEC).
The programme is too new to comment on best practices or lessons learned from its implementation. However, it is interesting as an innovative approach to leveraging funding for housing retrofits.
Objectives VEET’s aim is to make energy efficiency improvements more affordable, reduce GHG emissions, and encourage investment, employment and innovation in the energy efficiency market.
It is likely that it will work with only large corporations or public sector bodies since a high level of energy savings would need to be generated in order to set up a revolving fund to fund employees’ home retrofit projects.
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See: www.veet.vic.gov.au/Public/Public.aspx?id=Overview
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Ibid
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