Hoping to boost private investment in energy-efficiency projects, the state is launching a pilot program aimed at increasing investor confidence that projected energy savings will be achieved.
The state Board of Public Utilities is the first regulatory agency in the nation to participate in the Investor Confidence Program, which was developed by the Environmental Defense Fund to deal with a perception on the part of private investors that savings and financial returns on energy-efficiency initiatives are unreliable.
As in many other states, New Jersey officials and clean-energy advocates say energy efficiency is the most cost-effective way to reduce pollution, including emissions contributing to global climate change, and to help cut energy costs to consumers and businesses.
The one-year pilot is specifically targeted to midsize commercial buildings and multifamily housing projects as part of an existing state energy-efficiency program. But it offers enhanced incentives to help owners and businesses pay for increased documentation and verification that projected savings will be realized.
“Investors who receive accurate, detailed financial savings data on energy-efficiency projects are better-equipped and more likely to continue invest in projects to save energy,’’ said BPU President Richard Mroz.
Buildings account for nearly 40 percent of energy used in the United States, so improving energy efficiency is crucial to attaining a cleaner-energy future, according to Mary Barber, EDF’s director for clean energy in New Jersey.
“Using smart-engineering standards and best practices to help save energy in buildings creates local jobs, cuts pollution, and saves New Jerseyans money,’’ Barber said.
In standardizing the way energy-savings projects are engineered, documented, and implemented, the EDF is planning on putting practices from other financial markets to work -- from car loans to home mortgages -- to help underwrite and finance those investments.
“As this pilot program demonstrates the investment attractiveness of energy conservation measures, even more financial resources will become available to New Jersey businesses to upgrade and grow their facilities,’’ Mroz predicted.
The pilot will be part of a popular energy-efficiency program, dubbed Pay-for-Performance, under the Office of Clean Energy. It will be voluntary for those who want to participate, but doing so will make projects eligible to up to $10,000 in additional incentives to offset costs associated with the more detailed monitoring requirements.
The state will begin accepting applications for the pilot in December.