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Energy Efficiency and Renewable Energy Financing

Written by Dr. Madeleine Roberts
Published on May 2, 2024
Research Highlights

Energy efficiency improvements and distributed renewable energy systems benefit the utility grid by reducing demand

Low-income households can particularly benefit from energy efficiency improvement programs.

Federal, state, and private programs are available to assist residential and commercial consumers with paying for energy saving technology.

Energy savings reduce costs to consumers and strengthen the electric grid.

As demand for electricity is expected to increase, the electric grid must be able to meet this need (DOE 2024). Installing new electricity generation and expanding the grid transmission system meet this demand by increasing supply. Investments in energy efficiency and distributed renewable energy, such as residential solar energy, small wind turbines, or battery storage systems, improve grid reliability by reducing overall demand. Energy efficiency improvements save customers money on electric bills and delay installation of new energy generation systems. This delay provides long-term savings to both utility companies and consumers.

  • Implementation of energy saving technologies across commercial and residential buildings is projected to significantly reduce U.S. energy usage by 2030 (NAS 2010).
  • Financial incentives for energy efficiency improvements and distributed energy installation are available to encourage the deployment of these technologies.

See our Science Note on Grid Reliability to learn more about the evolving power system and ensuring the reliability of the U.S. power grid.

PACE provides financing for energy efficiency improvements and distributed energy systems.

Property Assessed Clean Energy (PACE) is a model to finance energy efficiency improvements and renewable energy systems authorized by MO statute (RSMo 67.2800-67.2840). 3 districts administer the program to participating MO communities.

  • 37 states have authorized PACE for commercial clients, including industrial, agricultural non-profit, and multi-family residential properties; 3 states, including MO, have enabled residential PACE (DOE).
  • Since inception through 2024, commercial PACE in MO has provided $225 million in financing (Personal communication, Show Me PACE).
  • No MO PACE districts currently finance residential projects.

Financial assistance is available to households for residential improvements.

Residential energy efficiency improvements can require a high upfront investment that may be inaccessible. Low-income households (MU Extension 2024, Rose 2020, Eisenberg 2014):

  • Live in older, more energy inefficient homes.
  • Use older, less efficient appliances and temperature control systems.
  • Spend more of their income on energy costs, due both to relative energy inefficiency of older homes and higher likelihood of using natural gas for heating.

Programs assist consumers in paying for upgrades or in spreading out the investment over time with accessible financing. Major programs available to Missourians that serve a residential audience are listed in Table 1.

Table 1. Programs that provide financial assistance for residential energy efficiency improvements and distributed energy systems available in Missouri.



Eisenberg JF (2014) Weatherization Assistance Program Technical Memorandum Background Data and Statistics On Low-Income Energy Use and Burdens. Oak Ridge National Laboratory, U.S. Department of Energy. https://info.ornl.gov/Files/Pub49042.pdf

Missouri Housing Development Commission (2022) Update to the Five-Year Strategic Plan for Affordable Housing for the State of Missouri Prepared for Missouri Housing Development Commission. https://mhdc.com/five-year-strategic-plan/

National Research Council (2010) Real Prospects for Energy Efficiency in the United States. National Academies Press. http://nap.nationalacademies.org/12621

Rose E (2020) Background Data and Statistics on Low-Income Energy Use and Burden for the Weatherization Assistance Program: Update for Fiscal Year 2020. Oak Ridge National Laboratory, U.S. Department of Energy. https://weatherization.ornl.gov/ORNL_TM-2020_1566.pdf

University of Missouri Extension (2024) Missouri Economy Indicators: Housing Age and Energy Efficiency. https://extension.missouri.edu/MissouriEconomy_AgingHousing_v5i6_22April2024.pdf

U.S. Department of Energy (2024) The Future of Resource Adequacy. https://www.energy.gov/The%20Future%20of%20Resource%20Adequacy%20Report.pdf

U.S. Department of Energy, Property Assessed Clean Energy Programs. https://www.energy.gov/scep/slsc/

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