There is huge pent up demand in the investment community for long-term, stable investment vehicles, based on energy efficiency improvements. The problem is that the cash flows needed to support those investments are usually lost to tenants in the form of reduced energy bills. Even if this “split incentive” problem is resolved, cash flow remains tied to the building owner’s willingness to pay the investor back a portion of the savings. The result is either no investment opportunity, or at best, a short-term opportunity. MEETS was designed specifically to correct for these shortcomings.
Cash flows under MEETS are delivered through a long-term power purchase agreement with the utility, not through repayment by the building owner.
Investors benefits include:
- Long-term reliable cash-flow from a stable, asset-based investment
- Investment-grade counterparties – Lower and rated payment risk
- Well‐understood instruments (Power Purchase Agreements for the Independent Power Producer Model and utility equity and bonds for the utility‐invested model)
- Greater liquidity through utility-level portfolio aggregation.