Deutsche Bank and The Rockefeller Foundation Release Building Energy Retrofit Study
US Retrofits could yield $1 trillion of energy savings and create 3.3 million job years; new financing models can unlock this opportunity
DB Climate Change Advisors (DBCCA) and The Rockefeller Foundation today released a research study which examines the potential size and investment opportunity of upgrading and replacing energy-consuming equipment in US real estate. The paper, entitled, “United States Building Energy Efficiency Retrofits: Market Sizing and Financing Models,” highlights this investment opportunity, with the potential for significant economic, climate, and employment impact. DBCCA is the climate change investment and research business of Deutsche Bank’s Asset Management business.
Judith Rodin, President, The Rockefeller Foundation, noted “buildings consume approximately 40% of the world’s energy and are responsible for 40% of global carbon emissions. However, proven technologies to retrofit buildings can both conserve energy and - even more importantly in these difficult economic times – have the potential to create a large number of jobs. With the release of this new report, outlining both the investment and job opportunities, I am increasingly hopeful that this market can achieve its full potential.”
Mark Fulton, Global Head of Climate Change Investment Research for DBCCA, stated “We believe that the emerging Energy Service Agreement financing structure offers significant near term potential to scale quickly and meet the needs of both real estate owners and capital providers in the commercial and institutional market, without the requirement for external enablers such as regulation or subsidy.”
In this report, DBCCA and The Rockefeller highlight that:
- ~$279 billion could be invested in retrofitting the residential, commercial, and institutional market segments in the US.
- This investment could yield more than $1 trillion of energy savings over 10 years, equivalent to savings of approximately 30% of the annual electricity spend in the United States.
- If all of these retrofits were undertaken, more than 3.3 million job years could be created.
- These jobs would include a range of skill qualifications, and would be geographically diverse across the United States.
- Additionally, if all of these retrofits were successfully undertaken, it would reduce U.S. emissions by nearly 10%.
The report goes on to investigate a number of financing models which offer the potential to scale investment in these markets and overcome both the supply and demand side barriers. Utilizing the work done by the World Economic Forum as a reference point, the report profiles these models, including the Energy Services Agreement (ESAs), Property Assessed Clean Energy (PACE) and On-Bill Finance (OBF), in addition to examining the largest historical provider of energy efficiency upgrades, the Energy Services Companies (ESCOs).
DB Climate Change Advisors (DBCCA) is the climate change investment and research business of Deutsche Asset Management (DeAM). DeAM is one of the leading climate change investors in the world, with approximately $5.3 billion under management as of September 2011. With a world-class in-house research team focusing on this theme, DBCCA is an investment industry thought-leader on a broad range of clean tech dynamics.
About Rockefeller Foundation
The Rockefeller Foundation’s mission to promote the well-being of people throughout the world has remained unchanged since its founding in 1913. Today, that mission is applied to an era of rapid globalization. Our vision is that this century will be one in which globalization’s benefits are more widely shared and its challenges are more easily weathered. To realize this vision, the Foundation seeks to achieve two fundamental goals in our work. First, we seek to build resilience that enhances individual, community and institutional capacity to survive, adapt, and grow in the face of acute crises and chronic stresses. Second, we seek to promote growth with equity in which the poor and vulnerable have more access to opportunities that improve their lives. In order to achieve these goals, the Foundation constructs its work into time-bound initiatives that have defined objectives and strategies for impact. These initiatives address challenges that lie either within or at the intersections of five issue areas: basic survival safeguards, global health, environment and climate change, urbanization, and social and economic security. For more information, please visit www.rockefellerfoundation.org.
About Deutsche Bank
Deutsche Bank is a leading global investment bank with a substantial private clients franchise. Its businesses are mutually reinforcing. A leader in Germany and Europe, the bank is continuously growing in North America, Asia and key emerging markets. With more than 100,000 employees in 72 countries, Deutsche Bank offers unparalleled financial services throughout the world. The bank competes to be the leading global provider of financial solutions, creating lasting value for its clients, shareholders, people and the communities in which it operates. For more information, visit www.db.com.
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