Joule Assets, HSB Offer Performance Insurance for Small, Midsized Energy Efficiency Projects
Provides capital for an underserved market
BEDFORD HILLS, N.Y. — Joule Assets Inc., a provider of financing solutions for the energy efficiency and demand management industries, has announced an energy efficiency performance insurance offering with Hartford Steam Boiler (HSB), a leader in equipment insurance and part of Munich Re. The companies said the performance insurance product provides scalable energy savings insurance solutions for Joule contractors by underwriting at the portfolio level.
Joule Assets said it has sought to bring financing products to the large and untapped market for efficiency upgrades in small and medium enterprises (SMEs), and this insurance offering represents a significant step in that regard. Joule’s contractors will now be able to offer their customers no upfront cost solutions backed by performance insurance. For investors in Joule’s ERA Fund, insurance on energy performance cash flows provides a path to securitization for Joule’s portfolio with corresponding benefits of increased velocity of capital, reduced portfolio risk, and amplified portfolio returns.
“The market for efficiency retrofits for small and medium enterprises presents a significant opportunity for new and creative approaches to financing,” said Dr. Richard B. Jones, HSB senior vice president for engineering and research. “Products developed for this market, however, must be cost-effective. HSB’s portfolio underwriting approach to developing this new product enhances the value of energy efficiency projects, without adding burdensome costs.”
“HSB’s innovative insurance product will allow Joule Assets to lower their loan loss reserves and deploy more capital in an underserved market,” said Dennis Quinn, Joule Assets’ COO. Joule Assets said its ERA Fund serves a critical, unmet need in the market by connecting investors with the next wave of energy efficiency projects generated by small and medium enterprises. Deutsche Bank estimates a market size of $279 billion in the U.S. alone, 97.5 percent of which sits in SMEs. This market has been virtually untapped due in large part to market barriers including lack of access to financial products. The Joule fund allows investors to reap the benefits of the attractive returns associated with energy efficiency, while providing smaller-scale contractors with the same quality of financing that large-scale energy efficiency projects have enjoyed. This insurance product benefits all parties in the transaction including the contractor, customer, and Joule ERA Fund investor.
“One of Joule’s differentiators is its strength in onboarding and vetting contractors and their projects and monitoring project health through ongoing measurement and verification of performance. We’re proud to have developed a due diligence process that is strong enough to attract world-class partners like HSB,” Quinn added. “In a market that has been historically underserved, this is yet another milestone in our long term effort to create a strong capital source for the small and medium commercial sector and to provide investors an investment vehicle with compelling risk adjusted returns.”
For more information about Hartford Steam Boiler, visit www.hsb.com.
For more information about Joule Assets, visit www.jouleassets.com.
Publication date: 10/13/2015