A new partnership between the Institute for Market Transformation and the Council of Smaller Enterprises could unlock green leases as a source of energy efficiency financing for non-residential buildings in Cleveland, Ohio.
“Traditionally, building energy efficiency has been blocked by a ‘split incentive,’” Fierce Energy reports. “If the tenants pay the energy bills, the landlord has little incentive to invest in efficient equipment. At the same time, the tenant does not own the energy-using systems of the building, and thus has no incentive (or ability) to invest in efficiency upgrades.
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“The result: neither party takes the initiative to make improvements, limiting the uptake of energy-efficiency solutions.”
Green leasing provisions “realign incentives, facilitate information sharing, and encourage landlord and tenant to work together on the efficient use of energy and other resources.”
