An energy revolution is underway. Forward-thinking businesses are changing how they source and use energy – they are rethinking energy for better business performance. Energy Managers are looking for solutions that give them better control of how they use and source energy, while meeting increasing demands, improving efficiency and reducing carbon emissions.
The radical shift from traditional centralized energy generation to localized distributed energy resources is putting power into the hands of energy users. This shift provides new opportunities to tackle energy challenges and find new, more efficient ways of managing and benefiting from energy.
‘Easy-win’ energy efficiency improvements are no longer enough to counter major energy challenges. Organizations who are not adapting to this transforming market may be left behind, as they are unable to capitalize on the proven benefits of distributed energy resources through better energy costs, operational efficiency, and environmental performance – and the reputational advantage of being a sustainable energy leader.
Shifting to a distributed energy strategy requires vision, expertise, and funding. According to our research, organizations that accelerate their journey to energy efficiency, resilience, and sustainability by investing in advanced energy technologies are gaining both economic and environmental advantages.
The good news is that lack of capital is not a barrier to accessing these new energy opportunities. Our investment guide demonstrates how organizations can leverage funding to improve energy performance and gain competitive advantage.
Financial constraints could prove challenging for organizations across North America as they strive to implement energy efficiency and energy infrastructure upgrades while maintaining a healthy cash flow. When frontline processes, critical business systems, and core operational activities are competing for limited capital budgets, energy improvement projects sometimes get sidelined.
It is important for organizations to consider flexible funding options for their energy investments and explore how different funding options could help support wider business objectives. Funding may enable organizations to unlock opportunities that reduce energy and operational costs, improve their energy resilience and environmental performance, and meet corporate social responsibility targets.
There are various methods available for organizations looking to invest in energy efficiency through advanced distributed energy solutions.
Standard funding options
Standard funding options are currently most prevalent. With these traditional CAPEX-based options, organizations can self-fund their energy initiatives, which makes a clear statement about their commitment to an advanced energy strategy – but it requires CAPEX outlay.
Alternatively, they can leverage government incentives and bank loans to reduce or avoid CAPEX outlay and free up capital to invest in other organizational priorities.
However, the advent of advanced distributed energy solutions is now driving demand for more sophisticated CAPEX and OPEX-based funding options. Businesses are beginning to adopt innovative methods of financing complex distributed energy projects. These progressive methods include shared risk models and service agreements.
Innovative funding methods
Innovative funding methods are becoming more popular and are making advanced energy solutions accessible to more organizations across the country. These options provide an alternative to standard funding that requires CAPEX outlay, minimizing the responsibility that comes with energy solution ownership.
Distributed energy solution financing and leases can help to fund all or a portion of a project’s cost. Organizations can choose from several payback terms and rates that work best for their cash flow preferences while avoiding CAPEX outlay and freeing up capital.
Alternatively, organizations can choose services agreements, which enable you to transform your energy infrastructure without the need to divert operational capital. The model is designed for 100% of CAPEX to be funded by a third-party (typically the supplier) and converted into an OPEX paid for as a ‘Service’. Repayment over an agreed period of time is linked to measured and verified savings or measured volumetric output of the installed equipment, such as kWhs or thermal units.
Distributed energy solutions are more accessible than ever before, and we are already helping thousands of organizations across the globe achieve their energy goals. Combining our long history of leadership in the energy industry and end-to-end energy expertise, you can be confident that you have the right energy partner to deliver your ambitions and keep your financial resources focused on what matters most – your business.
Find out more about how Centrica Business Solutions can finance your distributed energy ambitions.
