With an increasing focus on decarbonization to mitigate the effects of climate change, many laboratories and other high-tech facilities may be looking to implement new projects or solutions to improve energy efficiency and decrease carbon emissions. When determining how to finance these projects, lab planners need to consider a number of factors, including how much the project will cost, the impact of potential debt, preferred payment structures, preferred ownership status, and availability of utility incentives and tax incentives, if they plan to seek external funding.
There are many possibilities for financing lab renewable energy and energy efficiency projects, but you should research which options are best for your specific project and check out the new best practices guide from the International Institute for Sustainable Laboratories (I2SL). Below are just a few of the available financing options to explore:
Green Revolving Funds (GRFs): GRFs are internal capital pools that are dedicated to funding energy efficiency, renewable energy, and sustainability projects that generate cost savings. A portion of those savings is then used to replenish the fund, allowing for reinvestment in future projects of similar value and thus making the fund self-sustaining.
Power Purchase Agreements (PPAs): PPAs are frequently used to fund large renewable energy projects. PPAs are long-term contract agreements between a party that buys electricity and one that sells it, and are often used to fund large renewable energy projects.
Utility Incentives: Many utilities offer incentive payments for energy efficiency projects. Those can sometimes be significant. Check with your local utility for eligibility.
Tax Credits and Deductions: A tax credit for renewables deducts the full amount from the tax bill, whereas a tax deduction for energy efficiency projects lowers the amount of taxable income by the by the amount of the deduction. The Inflation Reduction Act (IRA) of 2022 provides opportunities for institutions of higher education to use both tax credits and deductions to transition to clean energy and clean transportation. Read more about funding opportunities from the IRA in this report from Second Nature.
Learn more about the various financing possibilities, for lab decarbonization projects in the new Financing Options for Energy Efficiency and Renewable Energy Projects Best Practices Guide. And stay tuned for a webinar highlighting the guide later this year!
If you’re currently looking for funding for a project, you may be eligible for the Buildings Upgrade Prize (Buildings UP) from the U.S. Department of Energy (DOE). DOE is offering more than $22 million to ideas to accelerate widespread, equitable energy efficiency and building electrification upgrades. To find out more about acceptable projects and how to apply, view the recording of the informational webinar or check out the series of upcoming webinars about the prize.
I2SL Educational Opportunities
Join I2SL on the road to decarbonization at the 2023 Annual Conference October 22-25 in Anaheim, California! The Call for Presenters is now open, so submit an abstract by Friday, March 20 if you are interested in speaking. Topics of interestinclude but are not limited to decarbonization, energy efficiency, green labs, sustainable design, ventilation management, and renovation and reuse.
For the first time, I2SL is offering a virtual, international educational experience ahead of the annual conference. I2SL’s Education Week, April 25-27, will feature three days of presentations on hot topics given by international speakers. Registration is opening soon so keep an eye out for more information about the event, including the full agenda of speakers from around the world!