Financing Your Energy Efficiency Project

Jeremy Epstein Energy Efficiency Finance Specialist

Boulder County, Colorado

Elevations Energy Loans: Behind The Music

May, 2010: $25M DOE

RFP Awarded to Elevations Credit Union

$8 million to create a finance program

EnergySmart Program Successes To Date

• Worked with over 150 contractors• Over 2,700 commercial properties • Over 10,000 homes• Leveraged private investment 6:1• 16,000 mtCO2e annually = 3,300 passenger

vehicles off the road

What’s the Big Deal With Financing For Energy Efficiency?

Seriously!

• 1/3 of GHG’s

• 70% of Electricity

• Negawatts!

Is Energy Efficiency Financing The Silver Bullet?

• Lack of Information = Education• Transaction Costs & Lack of

Time Resources = Technical Assistance

• Lack of Confidence in Savings = Workforce Development

Good God! What Is It Good For? • Can Eliminate First Cost Barrier• Compliment to Existing Incentives (Rebates

and Tax) • Financing Means Customers Have “Skin In The

Game”– May operate for optimal savings and maintain

better over rebated/granted/free equipment.

Colorado 2010….

1

1. ClimateSmart PACE Program

Colorado 2013

1

1. Elevations Energy Loans

2. City of Ft Collins On Bill Finance

3. EnergySmart 4. PowerSaver Loan

5. Green Colorado Credit Reserve

6. Energy Efficient Mortgages

1

2

3 4,5,6

Many Ways To Finance

FHA PowerSaver

Power Purchase

Agreements

Energy Efficient

Mortgages

PACE

On Bill

Performance Contracting

Revolving Loan Funds

QECB (Bonds)

Mechanics of a Loan Loss Reserve (LLR)Five $100,000 loans are made, totaling $500k

Simultaneously…….$7

Million

LLR in

“Escrow”

20% ($100k) of every loan’s value

is transferred

to LLR

One Loan

Defaults:

Elevations can pull

$90,000

from LLR

$7Million LLR Leverages Lending Capital on 5:1 basis, $7million x 5=$35 million in lending capital

General Criteria for Energy Loans• Residential Rates start at: 2.75% and go up to 7.125%

• Commercial rates start 1% higher at 3.75%• Rates increase depending on terms and FICO score

• Terms- 36, 60, 84, or 120 month terms

• Loan Amounts- • Residential starting at $500 and up• Commercial starting at $1,000 and up

• Minimum FICO score: 580

General Criteria• Elevations Energy Loans is a sustainable, revolving

loan pool

• $35 Million in Lending Capital Available

• Can be combined with rebates and incentives– No Prepayment Penalty!

• Renewable Energy is eligible!

Target Audience

Boulder Countyhomeowners and

businesses

Denver homeowners

and businesses

Business or home is physically located in – Denver County or Boulder County

What do Elevations Energy Loans Fund?• Common improvements cover all things that Xcel-

Rebates do• Always above minimum efficiency standards• Custom measures available• Associated work as well as health and safety

measures• Full eligible measures list available here: https://

www.elevationscu.com/energyloans/home-loans

Loan Process: Getting Started

• Loan decisions provided to member within 2 business hours! (8:30-5:30 M-F)

Loan Process: Getting The Job Done

• When you bring a customer to the table, your relationship is respected• Energy Advisor must approve scope of work for final loan approval

• Jobs over $10k are eligible for 50% partial disbursement when project is 50% complete

• Borrower signs loan closing documentation• Contractor submits final affidavit of completion/lien waiver,• Loan funds are disbursed by check

Some Tips For Contractors

1. If loan approval isn’t instant, write contract with customer “contingent on loan approval”.

2. Be explicit in your “scope of work/invoice”, leave a copy with your customer if possible.

3. While we will never farm out your lead, it may help to contact the correct program to let them know which clients you are working with

4. When in doubt, with a general question, or something specific to a customer or job, call the Advising Hotline:

Who is Using Elevations Energy Loans?• Over $1,100,000 in Energy Loans out the door since launch

in August 2012.

Jun-2012 Jul-2012 Aug-2012 Sep-2012 Oct-2012 Nov-2012 Dec-2012 Jan-2013 Feb-2013 Mar-2013 $-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$32,286$15,387 $3,803

$26,136

$101,733$117,549

$74,692

$38,618

$8,709

$80,254 $6,088

$18,351 $20,487

$80,315

$22,887

$19,930

$30,622

Residential Loans Funded By Month

EnergySmart Residential Denver Residential

Lessons Learned• An attractive finance product

with good rates is not enough• Advising is key! Time and lack of

understanding is still a major barrier.

• Outreach is key! Learning how to better use our marketing budget.

Lessons Still to Learn: We have $34 Million in Lending Cap to go!

• How to increase our baseline uptake?– Employer outreach– Integration with Mortgages– More time with Contractors

• How to effectively market?– “50% of our marketing budget is wasted, I’m just

not sure which 50%”

Case Study: What do you think?• ClimateSmart (PACE) Loans did $10,000,000 in loans with

612 residential participants, At 7% interest rate and $25,000 marketing budget.

• Comparatively Energy Loans have done $1,100,000 in loans

• Why was ClimateSmart so successful?– Took care of early adopters/pent up demand?– Novelty of program drew interest?

Ready To Apply?• For More Loan Information, Application, Eligible Measures:

– www.elevationscu.com/energyloans– (303) 443-4672

• Talk to (or have your customer call) a Loan-Trained Energy Advisor!– www.energysmartyes.com– 303.544.1000– www.denverenergy.org – 720-865-5520– Signup Sheets in Back! Have an Advisor Contact you!

Become an Expert!• Have questions? Want to share this info with your

sales team? – Schedule an Energy Loan Learning Session at your office

• I can present on specific aspects of the loan that pertain to your business model

• Answer all of your questions

• Get In Touch:– Jeremy’s Email: Jeepstein@bouldercounty.org– Office Line: (720) 564-2722