By Bob Hinkle, CEO, Metrus Energy

For those of us fortunate enough to be part of COP 27, the 10-day event in Sharm el-Sheikh, Egypt was enlightening, encouraging… and sobering. Climate action is gaining momentum – spurred in no small part by recent legislation like the Inflation Reduction Act and ratification of the Kigali Amendment to the Montreal Protocol – yet the reality remains that reaching the 2030 and 2050 targets for carbon reduction will take extraordinary cooperation, effort, and innovation.

I participated in a panel convened by the Business Council for Sustainable Energy (BCSE) that focused on the theme, “The Business of Changing the Trajectory to 2030 and Beyond.” The group – which included Scott Tew from Trane Technologies, Anna Pavlova from CarbonQuest, Kyle Davis from Enel North America, and Assemblyman Howard Watts III of the Nevada State Legislature – shared a variety of perspectives on how to “bend the curve” in order to accelerate the clean energy transition.

Moderator and BCSE President Lisa Jacobson began the conversation by asking about the role that finance has to play in driving the implementation of renewable energy and energy efficiency measures. Given that the International Energy Agency estimates that by 2030, private investment will need to account for 70 percent of the projected $4 trillion investment in sustainable energy, the question brought attention to one of the biggest challenges to achieving meaningful decarbonization.

Since my day-to-day focus at Metrus is helping companies bring energy efficiency projects to life, I launched the discussion by highlighting how innovative financing can meet the challenge. Energy as a Service, for example, through which a service provider funds 100 percent of the upfront cost and repayment is covered by the generated savings, has proven to be a successful way to make efficiency upgrades in the built environment. Energy as a Service also makes it possible to broaden the scope, scale, and carbon impact of an upgrade project through bundling – essentially combining different types of efficiency upgrades and/or renewables that have different payback horizons in order to get more climate bang for the buck.

Kyle Davis, a senior director at Enel North America, the world’s largest private owner of utilities, pointed out that the Inflation Reduction Act includes new provisions that promise to improve the project financing landscape as well, including a direct pay alternative to the tax credit for nonprofits and tax credit transferability for the private sector. Kyle predicted that these options will take pressure off the tax equity market and jumpstart more investment in clean energy.