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Financing Single Family Residential Energy Efficiency
Retrofits
Adam ZimmermanEnterprise CascadiaNovember 3, 2010
Why engage in EE consumer finance?
• CDFI Brand: If we don’t the carbon economy will be just about carbon, not opportunity
• Positioned: Seizing the opportunity at the earliest stages of an emerging industry
• Policy: Removing the obstacles to policy innovation and unleashing huge demand– In turn creating markets that deliver
outcomes• Regional: CO2 demands regional response
and aggregated resources• Resource: Substantial and sustained to
bottom line
Outcomes to Date
Access to Credit (Inclusion) Access to Opportunity (Jobs)
% Borrowers < Median HH Income66%
Program $ Paid to W&M Firms23%
% Borrowers Non-White16.5%
Average Wage$25.19
% Borrowers in CDFI Tracts30%
% of Employees Women/Minority50.9%
% Subordinated Debt90%
% of Employees with Health Care73%
Market MakerGoal: Shift the residential energy efficiency market to an environment where action to improve the efficiency of homes is as easy as buying a car with better gas mileage.
• Standardized product offering with options• Standardized & auditable performance rating• Widely branded “outlets” for sales• Affordable, easy to access financing terms• Warranty and peace of mind (value proposition)
Ultimately, the product must remove obstacles to policy decisions that drive markets to
“value” efficiency
Product Specifications• CO2 Matters: Energy usage screen
– Prioritize the greatest CO2 impact• Low Touch Underwriting
– Non-Traditional: Utility payment history, FICO >590– IT Platform: Linked to utilities and loan management
• Product Specifications– Rate: 5.99% (3.99% for <250% Federal Poverty)– Term: 20 years– Security: subordinated lien on property – Servicing: on bill of utility providing energy for heat– Risk: Cash funded loan loss reserve: 10%– Affordable: Goal is net zero impact on the family
budget
Cross Selling Aligned Products
• Efficiency Contractor Finance
Goal: Support business productivity and growth to meet demand • Provide access to working
capital • Blanket loan agreements
for individual contract advances
• Incent quality assurance • Build credit management
capacity• Enhance relationships with
suppliers and subs• Lay groundwork for supply
chain management
• Start Up for New Entrants
Goal: Create access to the market for emerging firms historically under-represented in this space.• Program preference for
underserved and rural firms
• Dedicated technical assistance, training, and certification support
• CDFI capital enhanced by community partners
• Partnerships with existing firms
OutputsYTD 2010 Actual 2010 Projected
Year-end2011 Projected
(Portland+Seattle+ Rural)
Homes Retro-fitted247
Homes Retro-fitted550
Homes Retro-fitted1,000
Loans Dollars Outstanding
$3,102,000
Loans Dollars Outstanding
$6,200,000
Loans Dollars Outstanding
$20,000,000
Simple ROI4.9%
Simple ROI5%
Simple ROI5.2%
Participating Contractors
21
Participating Contractors
25
Participating Contractors
50
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