Source: Chuck Abbe
Four years ago, I joined Environmental Defense Fund to work on climate policy as I believe that the issue is one of the most critical challenges of our era. I felt that my background working on Wall Street could be put to good use in crafting finance policies that help fight climate change. I chose EDF because they are the environmental organization that best understands how to use market mechanisms to deliver environmental solutions.
Tomorrow will be my last day at EDF, but I am not leaving because of any disappointment with the organization or any decline in my commitment on climate issues. At this point in time, new market mechanisms to finance clean energy are in place. The biggest contribution I can make is to switch to the private sector and demonstrate how well these mechanisms can deliver job-creating private investment.
Over the past several years, On-Bill Repayment (“OBR”) and Property Assessed Clean Energy (“PACE”) programs have been developed that are expected to allow for significantly increased investment in energy efficiency and solar generation projects. State of the art PACE programs are up and running in California for commercial and residential properties, and in Connecticut and Ohio for commercial properties. Texas and New Jersey are expected to also launch programs in coming months. Later this year, Hawaii is expected to start the country’s first open-source OBR program that EDF helped design. Read More
PACE financing allows home owners to install solar panels and repay the loans through their property tax bill. Photo source: Michael Coghlan Flickr.
Last week saw the completion of two exciting finance transactions that will increase investment in and reduce costs for clean energy projects.
In the first transaction, Renovate America, announced that it raised $50 million in venture capital funds to expand operations. The San Diego-based company develops residential Property Assessed Clean Energy (PACE) programs, which allow home owners to repay loans for energy efficiency and/or renewable generation through their property tax bill. Renovate America runs the successful HERO program, which in its first two years of operation provided $130 million in financing to homeowners in western Riverside County to retrofit their homes and reduce electricity bills.
So far this year, Renovate America has invested an additional $120 million to fund retrofits across California. EDF hopes the recently announced $50 million capital injection will not only allow Renovate America to continue its California expansion, but to expand to other states in the near future as well. We plan to work closely with Renovate America and their primary competitor Renewable Funding, which closed its venture round in April by raising $20 million. EDF’s collaboration with both companies will help additional states create residential PACE programs, attract investment for homeowners, and create jobs. Read More
Last week, I wrote about the continued success of Texas’ wind energy industry, but the growth in solar is also impressive. Nationally, solar energy accounted for 74 percent of all new electric generation in the first quarter of 2014. Plus, residential solar installations surpassed commercial projects for the first time in history earlier this year. This is significant, proving that more homeowners are making the switch and investing in a cleaner energy supply.
According to the Center for American Progress, “more than 60 percent of solar installations are occurring in zip codes with median incomes ranging from $40,000 to $90,000." This is an important revelation as the price of solar comes down quickly, projected to be cost-competitive with fossil fuels by 2020, more homes can and will add solar panels. In fact, experts expect more than half of all American homebuilders to offer rooftop solar as an option in new single-family homes by 2016. That’s a significant uptick from just 12 percent in 2013.
These findings make clear that people are taking their energy use into their own hands, highlighting the power of people in the new energy landscape, where customer-centric demand-side resources – rooftop solar, energy efficiency, demand response (which compensates electricity customers for conserving energy), electric vehicles, and energy storage- will play a key role. I discussed this trend in a radio interview with Voice of Russia a few weeks ago in a segment entitled Whole Home Automation: Promising for Consumers and Climate. Read More
Last week, Connecticut’s Clean Energy Finance and Investment Authority (“CEFIA”), the state’s Green Bank, announced the sale of $24 million in loans for clean energy retrofits of commercial properties. The loans were originated through the state’s Property Assessed Clean Energy (PACE) program, which allows property owners to access 100 percent up-front financing for energy efficiency and renewable energy improvements on their buildings. Repayment is attached to a lien on the property tax bill, making PACE loans very attractive assets for investors.
According to Jessica Bailey, Director of PACE for CEFIA, “Connecticut’s PACE program is able to provide financing for commercial property owners to implement money saving clean energy projects. Without PACE, most of these property owners might not have access to attractive financing and these projects would not be completed.” Read More
By: Matt Golden, Senior Energy Finance Consultant
Texas currently has the highest rate of energy consumption of any U.S. state and accounts for 10% of the country’s total energy consumption. Most of that energy goes to energy-intensive industries, such as aluminum, chemicals, forest products, glass, and petroleum refining, which consume 50% of the state’s energy, compared with a national average of 32%.
Last year, the Texas legislature passed statewide legislation enabling cities to use their property assessment as a way to finance clean energy and energy efficiency for industrial, agriculture, water, and commercial buildings. This innovative financing tool, generally referred to as property-assessed clean energy (PACE), has the potential to unlock a considerable amount of funding for both renewable energy and energy efficiency projects in the state, while simultaneously offering building owners cheaper financing options and secure repayment through their property assessment. Read More
When it comes to protecting the environment and fighting climate change, California has always been a first mover.
Now the state is boldly acting to unleash a new market that saves energy, cuts pollution, and drastically increases clean energy investment for California’s residents.
Last week, California approved a $10 million reserve that will revive the Property Assessed Clean Energy (PACE) program for residential customers.
PACE allows customers to take advantage of energy saving upgrades to their home with no money down. Customers simply use a portion of their savings to pay off the investment over time through their property tax bill. Financing can be entirely provided by private lenders at no cost to taxpayers. Read More