Presented By: Matt Bell

Partner, Viridian

Buildings and the EnvironmentBuildings account for 36% of greenhouse gas

emissionsBuildings account for 72% of the electricity

useExisting Buildings today will still account for

the majority of buildings in the year 2050.A focused effort must be given to making

existing buildings more efficient to make even modest reductions in GHG emissions.

What is an Energy Financing District? EFDs enable local governments to raise money

through the issuance of bonds to fund energy efficiency projects and renewable energy projects.

The bonds are repaid through a “special tax” or “assessment” property tax bill for only those property owners who choose to participate.

Financing is secured by a lien on the property and like other taxes is paid prior to other claims in the event of foreclosure.

Energy Financing DistrictsProperty Assessed Clean Energy (PACE)Sustainable Energy FinancingClean Energy Assessment Districts (CEAD)Contractual AssessmentsSpecial Tax Districts

Barriers to energy efficiency and renewable energy installationLack of Information by consumersUncertainty of savingsSplit incentivesTransaction CostsInitial Capital InvestmentLength of payback

EFD Benefits to the HomeownerLittle or No upfront cost to the homeownerLonger repayment periodsInterest payments are tax deductible Easy application processImproved property valueImmediate energy savingsRepayment obligation is transferred when the

property is sold

EFD Benefits to the Local GovernmentAssists local government in reaching reduced

GHG emission goals.Stimulates the economy with local green job

creation through energy retrofitting and renewable energy installation

Provides a secure financing mechanism with a low risk of default with loans secured by property liens

Positive Publicity for the local communities participating in EFDs.

Limitations of Energy Financing Districts Available only to homeowners and not

rentersExpected life of the improvements must be at

least as long as the repayment period.Cannot be used for transferable items such

as refrigerators and light bulbs. Set up and administration cost

How to form an EFDPass enabling legislationDevelop a management team to administer

and manage the programDesign a program that meets the specific

goalsSecure FundingFormally create a Special Tax District or tax

assessment districtLaunch the program

Pass Enabling LegislationArkansas currently doesn’t have legislation

that will allow for the special improvement assessments to prime a previously recorded mortgage.

It requires State Statutory authorization as well as approval by the local government entity

Developing Management TeamLocal government will need to hire a

management team and seek partnerships to develop and manage the program

Legal and Bond Council will be requiredFinancial consultantsSustainability program managerStaff from County Recorder / Tax Collecting

body

Design a program Establish a goal of energy reduction targets,

GHG reduction targets, economic development, renewable energy production

These targets must be developed with a team of advisors to evaluate cost and benefits of measures

Develop eligibility properties and eligible improvements

Secure FundingCan be financed through general funds as

part of their investment portfolio strategyIssue bonds and determine market through

consultation with bond councilPossible use of EECBG (Energy Efficiency

and Conservation Block Grants)

Create the Special Tax DistrictWill require several steps by the City Council

or County Board for district approvalsDetermine the boundary of the district

Examples of EFDsBerkley, CA: Berkley First Boulder County, CO: ClimateSmart ProgramPalm Desert, CA: (EIP)Energy Independence

ProgramBabylon, NY: Long Island Green Homes

ProgramStates that are pursuing enabling legislation:

Colorado, Louisiana, Maryland, Nevada, New Mexico, Ohio, Oklahoma, Oregon, Texas, Vermont, Virginia, and Wisconsin.

Berkley First ProgramPilot Started November 2008Property owners reserved $1 million in

funding in the first 10 minutes of program launch

38 projects with average cost of $28,000 each

Pilot program only allowed for PV Solar installations

Boulder County, Climate SmartNovember 2008 voters passed enabling legislation

establishing $40 million in bonding capacityAllows for various energy efficiency measures: air

sealing and ventilation, insulation, space heating and cooling, lighting retrofits, water heating, windows and doors, solar PV, solar hot water, etc.

First application process had 393 applicants with $7.5 million in projects

Boulder is tracking utility data on all applicants to compare dollars invested and dollars saved

Energy Independence Program Palm Desert, CAManaged by the city of Palm Desert Office of

Energy ManagementGoal of reducing energy use by 30% in five

yearsFunds projects for residential, commercial

and industrial customersAllows energy efficiency measures as well as

renewable energy projectsInitial Investment of $7.5 million funded 205

projects with an average cost of $36,000

Long Island Green Homes Project Babylon, NYAdopted a green building code in 2006Requires Energy Star for homes and LEED

certification for commercial buildings over 4000 sf.Financed through the classification of CO2 as a

solid waste and use $2.5 million from the city’s solid waste reserve fund

Funds cost effective energy efficiency measures and solar but must meet Energy Star

Funded 169 projects with an average cost of $7100Measures are predicted to save 28% on energy bills

Resourceswww.climatesmartloanprogram.orgwww.cityofpalmdesert.orgwww.berkleyfirst.renewfund.comwww.thebabylonproject.com

Questions