01-Introduction to Inclusive Financing for EE - 1-12-2017...2017/01/12 · PAYS® Offer – Here’s how it works: Ø Energy saving upgrades are installed in your home or building,

1SoutheastEnergyEfficiencyAlliance|www.seealliance.org

WEBINARSERIESINTRODUCTION TO INCLUSIVE FINANCING FOR ENERGY EFFICIENCY Learning Circle Series


WorkAreas:

BuiltEnvironment

State,Local&U=lityPolicy

EnergyEquity

Innova=veFinance

MissionTheSoutheastEnergyEfficiencyAlliance(SEEA)workstoensurepeopleintheSoutheasthavetheknowledge,resources,andopportuni?estoop?mizeenergyuse.

VisionEnergyefficiencyisaprimarydriverofaprosperous,healthyandsustainableSoutheast.

SEEA Serves the Southeast

SEEA’sLeadershipintheSoutheast

•  2014ArkansasEnergyOfficeStatewideFinancingOp?onsStudy

•  2014NorthCarolinaOn-BillWorkingGroup

•  2015SEEAwebinarwithCEOofRoanokeElectric

•  2015SEEAconferencein2015:TheRoanokeCenter

•  2016SEEAconferencein2016:OuachitaElectric

•  2017SEEALearningCircleforInclusiveFinancing

Solu?onsthatworksforanyone–regardlessofincome,creditscore,orrenterstatus–arebeVerforeveryone.

LearningCircleSeries

Asinterestgrows,youareingoodcompany:

•  U?litymanagers

•  Consumeradvocates

•  U?litycommissionstaff

•  Stateenergyoffices

•  Community-basedorganizers

•  Solu?onproviders


HolmesHummel,PhDPrincipal,CleanEnergyWorks


ü  FoundedCleanEnergyWorkstomobilizemoreinvestmentinthecleanenergyeconomy,opentoallthroughinclusivefinancing

ü  FormerSeniorPolicyAdvisorintheDepartmentofEnergy’spolicyoffice(2009-2013)

ü  WinnerofFiReAwardattheBloomberg“FutureofEnergySummit”forchampioningPAYS®asahigh-impactinnova?oninfinance

ü  Advisortou?li?esonbusinessplandevelopmentforinvestmentsincosteffec?vedistributedenergysolu?ons

Introduc=ontoInclusiveFinancingforEnergyEfficiency

•  Makingthecaseformoreinclusivesolu?ons

•  Overviewoftariffedon-billprograms

•  Comparisontootheron-billfinancingapproaches

•  Precedentsinthefield

•  Moreopportuni?estolearn


Addressingfirst-costbarriers:

S A V I N G SUpfrontCost

Year10

Rebate



Year10

Customers

Rate-payerorPublicfunds

Rebates

$Hundreds

$Thousandsinupgrades

perpar?cipant

Agerallrebatesandpublicfundsareapplied,customersfacetheseop?onsforthebalance:

q  PayCashq  PaywithCreditq  Declinetheupgrades

Payingforcosteffec=veefficiencyupgrades

Rebate



Year10

Rebate

Fina

ncing

Year10

Addressingfirst-costbarrierswithfundingandfinancing:

Rebate

Year10

Addressingfirst-costbarrierswithfundingandfinancing:

“Areyouahomeowner?”

“Doyouhaveagoodcreditscore?”

“Doyouhavesolidincome?”

Commonqualifyingcriteriaforfinancing:

BarrierstoFinancingintheCleanEnergyEconomy:Example-PropertyOwnership

BelowMedianIncome

Non-Homeowners

Homeowners

AboveMedianIncome

Non-Homeowners

Homeowners

Morethan1/3ofallU.S.householdsareinhomestheydon’town.

Source:U.S.CensusBureau,2015








CapitalProvider

U=lity

MeteredSiteSolu=onProviders

U=lity

ON-BILLCOSTRECOVERYTIEDTOMETER

ConsumersChooseAmongCompe=tors

Customer:Current&Future

INVESTMENTINUPGRADES

PAYASYOUSAVE(PAYS)® ®

PAYSoffersallu?litycustomerstheop?ontoaccesscosteffec?veenergyupgradesusingaproveninvestmentandcostrecoverymodelthatbenefitsboththecustomerandu?lity.

PayAsYouSave®andPAYS®aretrademarksofEnergyEfficiencyIns=tute,Inc.

CapitalProvider

U=lity

MeteredSite

Solu=onProviders

U=lity



INVESTMENTINUPGRADESProgram

Operator

AProgramOperatorcanaidimplementa=on


Example:RoanokeElectric’s


USDARUSEECLP

RoanokeElectric

MeteredSite

LocalContractors

RoanokeElectric



INVESTMENTINUPGRADESRoanoke

Center

PAYS® Offer – Here’s how it works: Ø  Energy saving upgrades are installed in your home or building, and you pay

nothing upfront. The utility pays for the installed energy solution.

Ø  To recover its costs, the utility puts a fixed charge on your electric bill that is significantly less than the estimated energy savings from these upgrades.

Ø  You have no loan, no lien, and no debt associated with this transaction; just lower utility bills and a more comfortable home.

Ø  When the utility recovers its costs, your obligation to pay ends.

Ø  If you leave this location sooner, or if an upgrade fails and is not repaired, your obligation to pay ends if you have followed your responsibilities.


PAYASYOUSAVE®(PAYS®)ON-BILLPROGRAMMODELTARIFF

Opt-inTariffforOn-BillEnergyEfficiency:ApprovedbyU=lityCommissionsinKansas,Kentucky,andArkansas

Themodeltariffhereisbasedonthemostrecentfiling,unanimouslyapprovedinArkansas.









ExampleTransac=on: ™

•  Investment: $10,000

•  CostRecoveryPeriod: 15years

•  CostofCapital: 3%

•  Es=matedSavings: $100/month

•  Charge: -$70/month

•  NetSavingstoCustomer: $30/month,~30%ofsavings

•  EnergySavings: 8,000kWh/year

Source:BriefingbyMACED,theprogramoperatorfortheHow$martKYprogram.Thissamplehasconvenientlyroundnumbers;averageinvestmentsizeis~$7500.

Singlestoryhome,upgradedwithinsula?on,airsealing,andheatpump

A`ributes HomeEnergyLendingProgram(HELP)

HELPPAYS®

•Residen?alpar?cipantsareeligible ü ü

•Rentersareeligible ü

•Nocreditscorecheckornodebttoincomera?os ü ü

•Noupfrontpar?cipantcost ü ü

•Es?matedsavingsmustexceedcostrecoverychargesby20% ü

•Par?cipantsignsaloanorpromissorynoteforadebtobliga?on ü

•Par?cipantacceptsanopt-inu?litytariff(NOTadebt)?edtometer ü

•Costrecoveryisthroughafixedchargeontheu?litybill ü ü

•Par?cipantacceptstariffwithdisconnec?onfornon-payment ü

•Paymentsendifupgradefailsandisnotrepaired ü

•Tariffrunswiththemeterandremainsineffectforsubsequentcustomeratthatloca?onun?lcostrecoveryiscomplete ü

Customers


Rebates

$Hundreds


perpar?cipant

Agerallrebatesandpublicfundsareapplied,theremainingbalanceyieldstheseop?ons:

q  PayCashq  PayonCreditq  Declinetheupgrades


Customers


Rebates

$Hundreds

$Billionsoflowcostcapital

available

$MillionsInvestmentannually

Loan PAYS®CapitalMarkets U=lity

Agerallrebatesandpublicfundsareapplied,theremainingbalanceyieldstheseop?ons:

q  PayCashq  PayonCreditq  Declinetheupgradesü  PAYSOffer


perpar?cipant


CustomerEligibility

OfferAccepted DealSize DefaultRate

Loans

PAYS®2X 5X

2X

10X~10%$3300

0.3%50%

Comparisonforbuildingefficiencyupgrades

Investmentaccelera=onisaproductofthesemul=ples.

ü  No consumer loan, lien, or debt ü  Reaches renters and low-income

ü  Higher uptake rates ü  Deeper energy & carbon savings


PAYASYOUSAVE(PAYS)® ®








Comparinglast(andbest)4monthsofHELPwithfirst4monthsofHELPPAYS®:

§  Doubledcustomersseekingassessments,andmorethanathirdweremul?-family(comparedto0previously).

§  Amongcustomersreceivingassessments,100%opt-informul?-familyrentalunits,and>80%forsinglefamily.

§  Doubledthescaleofcapitalimprovementsfromanaverageof$3000toabove$6000togetdeeperenergysavings(~30%).

DoublecustomersXDoubleprojectsize=

§ Quadrupledinvestment,soaringfrom$225kto$1million.

Result:SurgeinInvestment

Source:PreliminaryResultsoftheOuachitaElectricHELPPAYS®Program,November2016,www.oecc.com

Ouachita Electric Cooperative

(Loan)(Tariff)

•  2,400+efficiencyassessmentswithofferstoinvest•  1,400+investments:Morethanhalfofcustomerssay“Yes!”

•  ~$5,700perbuilding,withco-paymentfromcustomer•  $8+millioninvested•  Lessthan0.1%chargeoff

•  AnnualSavings:–  3.2millionkWh–  386,000therms–  5,200tonscarbon

Source:MidwestEnergy,repor=ngresultsthroughAugust2015

ExampleInvestmentProgram:

Thesesavingsgeneratemul=plebenefitstreams

Tariffvirtuallyassuresfullcostrecovery

Coopera=veLeadershipMa`ers

Morethan90%ofpersistentpovertycoun=esintheU.S.areservedbyelectriccoopera=ves.

Coopera=veLeadershipMa`ers

Ac?ve

Diligence

Morethan90%ofpersistentpovertycoun=esintheU.S.areservedbyelectriccoopera=ves.

Ruralcommuni?esareleadingthewayoninclusivefinancing,andareofferingassistance.








MoreIntroductoryInforma=onOnline

•  CleanEnergyWorks.org–  Introduc?ontoPAYS®– Top20Ques?ons&Answers

•  CleanEnergySolu=onsCenter(U.S.DOE)–  InclusiveFinancingforDistributedEnergySolu?ons


And,joinusforthefollowingsessionsinthisseries…

NextSession:UpdateonInclusiveFinancingPrograms

intheSouthThursday,February16th,2:00p.m.-3:00p.m.EST

Learnfromleadingprogramoperatorswhoaremanagingmul?-milliondollarefficiencyinvestmentporxoliosinareasof

theSouththatareaffectedbypersistentpoverty.


™

BeyondtheBasics:LearningCircleonInclusiveFinancing

1.  Introduc?ontoInclusiveFinancingforEnergyEfficiency(today)

2.  UpdateonExis?ngPrograms(Feb16th)

3.  ConsumerProtec?onsinInclusiveFinancingforEnergyEfficiency

4.  DuediligencewiththeDecisionToolforU=lityManagers

5.  ExploringProgramOperatormodels

6.  EstablishingaReserveFundfortariffedon-billEEprograms

7.  SourcingcapitalforaTariffedOn-Billinvestmentprogram

8.  Jobs:WorkforcedevelopmentinrapidlyexpandingEEmarkets


SEEALearningCircleforInclusiveFinancing

Eligibility:•  Par?cipantsintheintroductorysessions•  Ar?cula?onofaprojectthatfurthersyourinterestsBenefits:•  Opportunitytopar?cipateinadvancedsessions•  AccesstootherLearningCirclepar?cipants•  Assistancewithadvancingyourproject

Contact:WesleyHolmes,[email protected]


Ques=ons?



Documents

01-Introduction to Inclusive Financing for EE - 1-12-2017...2017/01/12 · PAYS® Offer – Here’s how it works: Ø Energy saving upgrades are installed in your home or building,