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Europe to Follow U.S. In Opening Small-scale Energy Efficiency Projects to Individual Investors


insulation-energy-efficiency-CAP1Over the past few years, the trend of developing energy efficient technologies has become quite apparent. The popularity of energy efficient consumer products has now shifted from being strictly associated with giant manufacturers, to becoming a major factor for selling new consumer products, which attracts small-scale individual investments.

Cutting on power usage is undoubtedly one of the most effective ways to reduce greenhouse gas emissions and combat climate change. It is true that wind and solar farms contribute greatly for this, but energy efficient air conditioning systems, lighting and insulation are just as important.

Energy efficiency projects, which require small investments from individuals have picked up speed in the U.S. over the past few years. Although such projects remained relatively low key, earlier this year Hannon Armstrong Sustainable Capital managed to raise $167 million on the New York Stock Exchange, and all shares were made available to retail investors to fund efficiency projects.

As Jeffrey Eckel, the CEO of Hannon Armstrong, pointed out, such projects are not particularly good-looking, as wind turbines or solar panels are, they are not as attractive to invest in, but they do have a huge impact on carbon emissions. The latter is the reason why the company has put nearly $3 billion since year 2000 into energy efficiency building projects. What is more, considering that a big proportion of carbon emissions are generated by buildings, it is predicted that investors in Europe will soon follow their overseas competitors.

According to other experts, real estate investment trusts in the U.S. will soon become the major source of funds for upgrades of buildings’ energy efficiency. These trusts have incredibly high budgets, and only a small fraction of these could completely change the way buildings function.

Unfortunately, to date there are no equivalents to such trusts in Europe, but private investors might well initiate the start of such projects. As it stands, small-scale energy efficiency projects do not present great interest to small retailers, although investing in energy efficiency has already started to become apparent in commercial shopping malls, business centers and office buildings, mainly across the U.K.

On the island, energy efficiency projects are already picking up speed with insulation projects already being funded by the green investment bank and other sources. The current initiatives are not yet available to individual investors, but predictions indicate that very soon this will become a common practice here too.

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