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Energy policy

Financing clean energy

J. Environ. Econ. Manage. (2014)


Scaling up renewable energy can help achieve energy security, mitigate greenhouse-gas emissions and boost the economy. Therefore, financial schemes to support the adoption of clean energy are an essential part of wider economic and climate change policies.

In the United States, a novel initiative to finance clean energy-generation investments, known as Property-Assessed Clean Energy (PACE), was in place over the period 2008–2010. A. Justin Kirkpatrick and Lori S. Bennear of Duke University, USA, analyse the effect of PACE financing on the adoption of residential photovoltaic installations in California. Under the scheme, property owners obtain a loan from the local municipality and repay it through a property tax assessment. In this way, the assessment for repayment transfers to a new owner. The researchers analyse PACE programmes in Palm Desert, Yucaipa and Sonoma County, and find that they increased the adoption of photovoltaic installations by roughly 108% over the state average.

The transferability of financing and the effects of endorsement by municipalities on expected benefits are among the likely causes of the scheme's success.


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Contestabile, M. Financing clean energy. Nature Clim Change 4, 758 (2014).

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