Accessing Secondary Markets as a Capital Source for Energy Efficiency Finance Programs: Program Design Considerations for Policymakers and Administrators

Efficient access to capital from secondary markets—reselling energy loans to investors to replenish program funds­—is being advanced as an important enabler of the energy efficiency industry “at scale.” However, the role that secondary markets can play in bringing energy efficiency to scale is largely untested. Only a handful of secondary market transactions of energy efficiency loan products have been executed to date, and it is too soon to draw robust conclusions from these deals. At the same time, energy efficiency program administrators and policymakers face near-term decisions on whether and how to access secondary markets as part of their energy efficiency deployment strategy.

This report covers:

• How are secondary markets defined in the energy efficiency context?
• What have we learned from secondary market transactions of energy efficiency loans to date?
• What program design choices should program administrators consider as they weigh the pursuit of secondary market capital against other program objectives?
• Who are the key actors in secondary market transactions?