Insurance As Mass-Market Energy Efficiency Strategy?

To make any lasting progress on climate change, we’re going to need to be a whole lot more efficient with the energy we produce.  That means retrofitting existing inefficient buildings as much as possible to reduce waste.

Powering the Savings MARCH 2016 CoverThe dream would be to make a home or commercial building energy retrofit as easy and scalable as rooftop solar has become.  But so far nobody seems to have figured out how to do it.  There are some promising options, which we explored in a recent policy report called Powering the Savings.

But maybe the missing ingredient has been the insurance market.  The idea is that if insurers are willing to back a home or business retrofit project, then financiers should be much more willing to bring Wall Street-type money to the effort on a mass scale.  As PR Newswire reported:

Sealed, an energy software company that empowers homeowners to pay for home upgrades like insulation, air sealing, and smart thermostats with their energy savings, announced today the implementation of a residential energy efficiency insurance policy from The Hartford Steam Boiler Inspection and Insurance Company (HSB), part of Munich Re.

This innovative program insures the performance of Sealed’s proprietary energy analytics, which both removes energy savings performance risk from homes that finance energy efficiency improvements and increases the confidence of third party capital providers.

The key here is trusted and verifiable software that can measure actual energy saved via specific efficiency measures. With software improving to do just that, these kinds of financing arrangements will be just around the corner.