Building Connecticut’s Clean Energy EconomyOpportunities for Regional Economic Xcelleration

Regional Economic Development ForumNew Haven, CTDecember 2, 2011

Agenda

2

History of Clean Energy in Connecticut

From the Connecticut Clean Energy Fund to the

Clean Energy Finance and Investment Authority

Strategic Direction towards Scale with an Example

(i.e. Residential Sector)

Other Important Policies of Public Act 11-80

Your Towns and Next Steps

Yankee ingenuity History of clean energy innovation

Daniel Halladay: Wind Turbine

Owned the Halladay Windmill Company in Coventry, CT

Built and manufactured the first commercially successful self

governing new windmill in the U.S. in 1854

Relocated to Batavia, Illinois because of delays in production and

shipping as a result of the Civil War.

Albert Pope: Electric Vehicle

Owned the Pope Manufacturing Co. in Hartford, CT

Built electric vehicles under the Columbia Automobile Co. in 1897

Was bought out by the Electric Vehicle Co. and went under in 1899

Bernard Baker: Fuel Cell

Founder, president and CEO of ERC in Danbury, CT

Builds molten carbonate fuel cells for low emission, baseload,

distributed generation applications

Receives a two-year 70 MW order from POSCO Power, a

South Korean independent power producer in 2011

Public Act 98-28 – Catalyst #1Creating a new market for renewable energy

Grants and Incentives

Grants Loans

Equity

Public Act 11-80 – Catalyst #2Building a clean energy economy

Financing energy

efficiency projects

Credit enhancements

Bonding

Securitization

Grants Loans

Equity

Loan guarantees

Finance and Investments

Community Development

Financial Institution

Energy savings performance

contracts

Property Assessed Clean

Energy

Energy consumption data

From the CCEF to CEFIASubsidies to Private Capital

Public Capital

Priv

ate

Capi

tal

$1

Catalyst #1 (PA 98-28)

Subsidies – CCEF through CI

1

$0$2

$1

$0

$3

$2

$4

$6

$5

$7

$8

Attract Private Capital

(i.e. Loan Guaranty)

Catalyst #2 (PA 11-80)

Financing – CEFIA through CEFIA

2

Leve

rage

Pub

lic R

esou

rces

3

Reduce Public Subsidies

Clean Energy DefinedTowards a clean energy economy

+

Goals

Attract and deploy capital to finance the clean energy goals for

Connecticut

Become the most energy efficient state in the nation

Scale-up the deployment of renewable energy in the state

Support the infrastructure needed to lead the clean energy economy

9

Job CreationMore Private Capital = More Jobs

Direct and Indirect Job Years Created per Million $ Invested

0 5 10 15 20 25 30 35

Solar PV Installation - Non-Residential

Solar PV Installation - Residential

Fuel Cell Installation

Solar Thermal Installation

Energy Efficiency - C&I

Geothermal Installation

Energy Efficiency - Small Business

Energy Efficiency - Residential

Source: Navigant Consulting 2009 CT Renewable Energy/Energy Efficiency Economy Baseline Study.

10

Efficiency Savings Turn Energy Import Costs into In-State Cash

Fuel Oil

Electricity

Natural Gas

Job impact of energy savings dwarfs the

implementation impact

$

$ Jobs

Efficiency

$

Source: Environment Northeast. (2009). Energy Efficiency: Engine of Economic Growth. A Macroeconomic Modeling

Assessment

Increase the

attractivene

ss to

investors

Increase the

attractivene

ss to

customers

StrategiesInvestors and Customers

Educate customers

Leverage capitalAggregate

demand

StrategiesEducate, Aggregate and Leverage

Section 106 of Public Act 11-80Residential Solar PV Program

Goal: At least 30 MW of new residential solar photovoltaic (PV) systems installed by 2022

Direct financial incentives For purchase or lease of qualifying

residential solar PV systems

Incentives decline over time

Funding: $90-100 million over 10 years Program receives up to one third of ratepayer funds annually

Development Path Stakeholder feedback – all along

Department of Energy – “best practice” benchmarking

Department of Energy and Environmental Protection – approve the blocks

Board of Directors – target approval date for incentive of December 16, 2011

14

Green Loan Guaranty Fund

Up to $18 million in state bond funds for loan guarantees Guarantees loans by participating lenders for energy efficiency and

renewable energy projects

Projects include purchase and installation of:

Clean energy generation systems

Energy conservation materials

Replacement furnaces and boilers

Advanced energy-conserving equipment

Eligible: individuals, nonprofits, small businesses (≤ 50 full-time employees)

x

Undertake Energy EfficiencyQuick payback to finance solar PV

Undertake Energy EfficiencyQuick payback to finance solar PV

Connecticut Solar LeaseFinancial Innovation (Version 1.0)

Home Owner Installer

(Approved by CCEF)

CCEF

(Debt and Incentive)

Appr

oved

Inst

alle

rs

CT Solar Lease, LLC

EquityCo, LLC

(100% Equity)

ITC

Equity

Debt Service

$15,200,000

DeveloperCo, LLC

(Developer)

AdminCo,LLC

(Program Admin)

Originate

s Note

Sells

Not

e

Services

Management Fee

Paym

entLease

Rebate/Incentive

$23,400,000

Solar PV SystemREFERENCES

Design – 5.5% interest rate (4% to AFC First Financial for sourcing and servicing, 0.5% CT Solar Lease, and 1.0% to CCEF), secured, 200% of median income

Consumer Credit Guidelines – 640 if salaried, 680 if self-employed for at least 2 years, 720 if self-employed less than 2 years, no bankruptcy in last 7 years, debt to income or monthly obligations to monthly income 50% for all credit

scores

Performance – 800 loans, 6.0 kW AC average system size, from $5,320/kW rebate in 2009 to $2,731/kW rebate in 2012, and 2 defaults.

Green Loan

Guaranty

Fund

Finance

Energy Efficiency

Clean Energy

Deployment Fund

Fund

Prudent In

vestm

ent

and Retu

rn

Zero-Emission Generation Program (ZREC)

Creates demand for Class I renewable technologies Emit no pollutants

Solar, small hydro, wind, etc.

Beginning January 2012 and over next 6 years, each electric distribution company (EDC) must: Solicit 15-year power purchase contracts for zero-emission

generation projects (competition for ≤$350/ZREC)

Purchase zero-emission renewable energy credits (ZRECS)

Funding: $480 million – $720 million over 4 to 6 years

Result in 1,200 new FTE jobs (estimated) in near term

Administered by: EDCs and PURA

Low-Emission Generation Program (LREC)

Creates demand for Class I renewable technologies with low emissions (e.g. fuel cells, biomass, also zero emissions)

Low emissions:

Example ≤ 0.07 lbs/MWH of nitrogen oxides (carbon monoxide, volatile

organic compounds, etc.)

Beginning January 2012 and for the next 3 or 5 years, each EDC must: Solicit 15-year power purchase contracts for low-emission

generation projects (competition for ≤$200/LREC)

Purchase low-emission renewable energy credits (LRECS)

Funding: $180 million – $300 million over 3 to 5 years

Result in 350 new FTE jobs (estimated) in near term

Administered by: EDCs and PURA

Property Assessed Clean Energy (PACE)

Loans from cities/towns or private investors to property

owners to finance:

Renovations/retrofits to reduce energy consumption

Installation of renewable energy systems

Eligible properties:

Single- or multi-family residences

Commercial and industrial buildings

Loan is repaid through a benefit assessment on the property

tax bill

Loan runs with land/property, not owner who secured original loan

Connecticut Clean Energy Fund

Communities are leading by example

Regional Economic Xcelleration

Collaborating with Your Communities

City or Town Clean Energy Communities

Federal Grants Residential($ incentive – kW)

C&I($ incentive – kW)

Bethany X N2NEC $240,000 – 51

Branford X $600,000 – 129 $235,000 – 46

East Haven $75,000 – 17 $770,000 – 142

Guilford $240,000 – 134

Hamden X $510,000 – 105 $1,730,000 – 593

Madison X $200,000 – 63 $170,000 – 35

Meriden $50,000 – 14

Milford X SunShot $1,075,000 – 241 $1,480,000 – 268

New Haven X SunShot $550,000 – 120 $6,760,000 – 1,970

North Branford $30,000 – 6

North Haven X $340,000 – 68 $1,110,000 – 200

Orange X $390,000 – 101 $1,225,000 – 234

Wallingford

West Haven X $200,000 – 45 $1,660,000 – 293

Woodbridge X $250,000 – 53

Next Steps

1. Matchmaking Event – “How Electricity Consumers Can Take Advantage of Clean Energy Incentives” on January 5, 2012 at the Rocky Hill Marriott with REEBA, CEEF, and CEFIA

2. Energy Savings Performance Contracts – work with the State of Connecticut to make your municipal buildings more energy efficient.

3. Support Property Assessed Clean Energy – work with CEFIA to revise legislation that will enable private capital to invest in clean energy in businesses in your communities

Deliver Measurable Results at Scale

“Capital and Consumers”

26

Visit us online at

www.ctcleanenergy.com

Bryan Garcia

President

865 Brook Street

Rocky Hill, CT 06067-3444

(860) 257–2170

bryan.garcia@ctcleanenergy.com