The Global Innovation Lab for Climate Finance announced today that it endorses Pay As You Save® (PAYS®) for Clean Transport, starting with battery electric transit buses.
Members of the Lab, including governments, private investors, philanthropies, and development finance institutions convened at the Rockefeller Foundation in New York during Climate Week to endorse and formally launch new investment vehicles for implementation including PAYS for Clean Transport. Public and private investors also committed to financial, technical, and political backing to take these rigorously developed instruments to market. Barbara Buchner, Executive Director of Climate Policy Initiative and the Lab Secretariat said, “The instruments are already on their way to making significant impact on the ground, at a time when swift and catalytic solutions for climate action are needed more than ever.”
Clean Energy Works participated in the 2018 Lab process as a proponent for the concept of PAYS for Clean Transport. PAYS harnesses a utility’s capacity to reduce the upfront cost of electric vehicles by investing in the on-board batteries and charging equipment that connects them to the grid. The utility recovers its costs through a service charge for the transit provider that is less than the expected savings, providing a path to ownership for the transit agencies without a loan or lease obligation.
Dr. Holmes Hummel, founder and principal of Clean Energy Works, noted the business opportunity for utilities. “With PAYS, utilities have a growth opportunity at the grid edge as electricity gains market share in a historic transition to clean energy on both the grid and in the transportation sector. Our aim in advancing this solution is to accelerate investment without expanding utility monopolies by introducing instead business models fit for many distributed energy innovations in the 21st century.”
Along with the endorsement, the Lab also released a brief overview and an instrument analysis with more detail. Clean Energy Works will present an online briefing for those interested in learning more about the PAYS for Clean Transport model in the coming weeks. To receive more information about that event, please register here.