Snowflake Problem: Why Energy Efficiency Projects Are So Damned Hard To Finance

As we all learned in kindergarten, every snowflake is unique. Now, studies have shown that is not entirely true (see here if you are marginally interested in the science of snowflakes), but close enough.

Uniqueness may be good for snowflakes, but lousy for financial transactions. At least part of the problem in harnessing private capital to fund energy efficiency projects is the lack of standardization across projects. Major financial institutions need big pipelines of medium- to large- deals to make the sector worthwhile. If each transaction is significantly different, it means that underwriting standards, loan documents, due diligence and so forth have to be created from scratch for each transaction.