Appendix B 299
a point for complying with the IPMVP. For more information, please
visit their website at wwwusgbc.org.
Chapter 2
The Importance of M&V in Financ-
ing Energy and Water Efficiency
2.1 FINANCING ENERGY AND WATER EFFICIENCY
The key to unlocking the enormous potential for energy and water
efficiency worldwide is securing financing. Good measurement practices
and verifiability are some of the important elements in providing the
confidence needed to secure funding for projects. Securing financing
requires confidence that energy efficiency investments will result in a
savings stream sufficient to make debt payments. Measurement and
verification practices allow project performance risks to be understood,
managed, and allocated among the parties.
It is important that each M&V Plan clearly describe the tolerances
associated with the measurement and savings determination methods.
There can be significant variances in the tolerances within each of the
measurement options presented in this protocol. Users are advised to
understand the pros and cons of each option and the tolerance of the
particular measurement method proposed. Each participant is then
equipped to make an appropriate business decision about the risk and
reward of an investment.
Energy and water efficiency projects meet a range of objectives,
including upgrading equipment, improving performance, helping to
achieve environmental compliance, or simply saving energy and money.
All projects have one thing in common, an initial financial investment.
The type of investment may be an internal allocation of funds (in-house
project) or it may be a complex contractual agreement with an ESCO
and/or third-party financier.
All types of financial investments have a common goal—making
money or a “return” on investment. Rate of return is measured by vari-
ous financial yardsticks such as simple payback, return on investment