Energy Exchange

On-Bill Repayment & Community Solar: Clean Energy Investments Underserved Californians Can Afford

By Rachel Neil / Published: October 25, 2013

This commentary originally appeared on EDF’s California Dream 2.0 blog.

It sounds like the opening line of a joke: What can finance do to reduce inequality?

However, this is exactly the question I tried to tackle during my presentation at the Clean Power, Healthy Communities conference last week. Hosted by the Local Clean Energy Alliance, this annual conference focuses on equitable, community-based clean energy solutions for the Bay Area.

In keeping with this theme, I took the opportunity to explain how On-Bill Repayment (OBR) can increase access to energy efficiency and distributed generation installations for low and middle-income families. By overcoming cost barriers, OBR can deliver energy savings, cost savings, jobs and more comfortable and healthy homes to underserved communities. In addition to these tangible benefits, it offers residents greater control over energy generation, as well as their energy consumption.

While I was able to share EDF’s finance work with community organizers and other environmental advocates, the conference was also a chance to hear about and discuss variety of other community-based solutions. One initiative that OBR has tremendous potential to support and complement is community-owned solar. Signed into law in September, California’s Senate Bill 43 allows for shared ownership of renewable generation. This means that individuals who are unable to install solar panels at their residences can invest in an off-site solar system, and receive credit on their utility bill for their share of the power generated.

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Setting the PACE on Clean Energy Finance

By Brad Copithorne / Published: September 26, 2013

This commentary originally appeared on EDF’s California Dream 2.0 blog.

I spend most of my time working to establish On-Bill Repayment programs that allow property owners to use their utility bill to repay loans for cost-saving energy efficiency or renewable energy upgrades.  Many of my colleagues work on a similar program known as Property Assessed Clean Energy (“PACE”), which uses the property tax bill for repayment.  Since both utility and property tax bills are usually paid, both PACE and OBR are expected to lower the cost and increase the availability of financing for clean energy projects.

Last week, I was invited to attend a meeting of the leading PACE program administrators, property owners and other market participants in the country — and was pleasantly surprised to learn how much progress is being made.

Connecticut launched their program in January and is expected to close $20 million of PACE transactions for commercial properties by year end.  The Toledo, Ohio area expects to have executed $18 million of commercial transactions by the end of 2013.  Sonoma County, with a population of less than 500,000, has already completed $64 million of financings for residential and commercial properties.  In late 2012, CaliforniaFIRST launched a PACE program for commercial properties that has already received 130 applications.

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On-Bill Repayment In California: A Step Forward And A Missed Opportunity

By Brad Copithorne / Published: September 17, 2013

This commentary originally appeared on EDF’s California Dream 2.0 blog.

Yesterday, the California Public Utilities Commission (“CPUC”) updated their June 25 proposed decision that included implementation rules for an On-Bill Repayment (“OBR”) program for public and commercial properties.  An OBR program allows property owners to finance energy efficiency upgrades on their buildings and repay the obligations through their utility bills.  Banks and other private investors provide the funding and borrowers get low interest rates because the obligations are an integral part of the utility bill and, under the EDF proposal, are fully transferable upon change in ownership or occupancy.

The CPUC’s revised decision contains many of the elements necessary for a successful program including making the OBR obligation an integral part of the utility bill through a tariff.  Ed Wojtowicz, VP of Finance at Honeywell recently told me, “By integrating the financing charge into the utility bill, we expect that OBR will help many towns, cities and school districts approve money saving energy efficiency projects.”  We have heard similar sentiments from other market participants and are optimistic that this OBR program will accelerate money-saving clean energy investments in municipal and school properties.

Unfortunately, our California utilities — PG&E, SoCal Edison and Sempra —  have been fighting OBR tooth and nail for the past two years, as they fear that a successful OBR program would increase investment in distributed solar, potentially reduce utility control of energy efficiency programs and allow other companies to have access to the utility bill and customer relationships. Over the past three weeks, the utilities have had ten separate private meetings with CPUC commissioners or staff in an attempt to halt the OBR program.

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Aloha for Clean Energy Finance: A Tale of Two States

By Brad Copithorne / Published: September 3, 2013

This commentary originally appeared on EDF’s California Dream 2.0 blog.

For over two years, EDF has been working to establish an On-Bill Repayment program in California that would allow property owners to finance energy efficiency or renewable generation projects and repay the obligation through their utility bill.  Since utility bills tend to get paid and the obligation could ‘run with the meter’, defaults are expected to be low, which will improve the availability and reduce the cost of financing.  In May 2012, the California Public Utilities Commission (“CPUC”) agreed with our position and ordered the large utilities in California to develop a program for commercial properties.  EDF estimates that this program could generate $5B of investment over 12 years, which is expected to support 36,000 jobs.

Unfortunately, we are still waiting for the nonresidential OBR pilot in California to be implemented and if the utilities get their way, we may be waiting for close to another full year.  The California utilities appear to be fearful of change, distributed generation, and the impact of reduced demand.  They have employed aggressive tactics with teams of lawyers arguing and re-arguing every potential issue, even after the issues have presumably been settled by the CPUC.

This stands in sharp contrast to what is happening in Hawaii.  On March 25, the Hawaii Public Utilities Commission (“HPUC”) ordered the primary Hawaii utility, Hawaiian Electric Company, (“HECO”) to establish an OBR program for residential and commercial customers.  I just returned from 3 days in Honolulu and it appears that they are working cooperatively to get the program running in the first quarter of 2014.  This timetable of 12 months from HPUC order to implementation is less than half of what we seem to need in California, despite the fact that the Hawaii program covers a much broader range of property types and relies on public as well as private sources of financing.

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U.S. Electric Grid Under Cyber-Attack

By John Finnigan / Published: August 20, 2013

John FinniganIf Ben Franklin lived today, he might say that nothing is certain but death, taxes and cyber-attacks.  Cyber-attacks occur when individuals or groups hack into another group’s computer information systems to steal, alter or damage key infrastructure.  Our nation’s electric grid is under constant attack according to a survey of electric utilities by U.S. House Representatives Henry Waxman and (now) Senator Edward Markey.  The grid was the greatest engineering achievement of the 20th Century, but cybersecurity was equally unknown to those grid engineers as it was to Ben Franklin.  We need to do more to protect our energy infrastructure.

The U.S. has finally called out China for repeated and pervasive cyber-attacks.  Mandiant, a cybersecurity firm, released an alarming report in February 2013 regarding the ongoing cyber-attacks by the Chinese army.  James Clapper, the Director of National Intelligence, described cyber-attacks as a soft war already underway and a dire global threat in his April 2013 World Threat Assessment to the U.S. House Permanent Select Committee on Intelligence.  In May of this year, for the first time, the Pentagon’s annual report to Congress on the Chinese military openly accused China’s military of repeated cyber-attacks on the U.S. government and defense contractors.

Cyber-attacks are underway not only by China, but also by Iran, Russia, Al-Queda, organized crime, industrial spies, ex-utility employees and rogue hackers.  The U.S. Department of Homeland Security investigated over 200 serious cyber-attacks against critical infrastructure during the first half of 2013.  The electric grid was targeted in over half of these attacks.  At the recent Black Hat security conference in Las Vegas, Cyrill Brunschwiler of Compass Security explained how the smart grid’s wireless network can be easily exploited to steal electricity and to cause massive blackouts.  Though innovation and new clean energy technologies are key to modernizing our antiquated energy system, the electric grid is more vulnerable to cyber-attacks with increased use of smartphones, tablets, mobile apps and electric vehicles to connect with our home electronic devices.  A July 2012 report by the Government Accountability Office (GAO) outlines the various threats to the electric grid.

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California’s Capital Leads the Nation in Energy Efficiency Financing

By Climate Corps Fellow / Published: July 30, 2013

This commentary originally appeared on EDF’s California Dream 2.0 blog.

By: Kate Daniel, EDF Climate Corps Fellow

Kate Daniel, Climate Corps Fellow

Great news for California and the future of energy efficiency in Sacramento.

Today I took part in an announcement by Sacramento Mayor Kevin Johnson unveiling the nation’s largest Property Assessed Clean Energy (PACE) project in the country — and potentially a huge boost for businesses in the state’s capital.

Launched by Clean Energy Sacramento, the property owners of Metro Center, Metzler Real Estate, will now be able to take advantage of PACE financing to fund $3.1 million in energy efficient upgrades, including high efficiency rooftop units for heating and cooling and a state-of-the-art building management system. Ultimately, these upgrades will save $140,000 in annual utility costs for the property.

This project is not just good news for Metro and Metzler, but for the entire Sacramento region. Here’s how it works: Under the PACE program Metzler will receive private funding from Ygrene Energy Fund, who covers the upfront costs of the project Metzler pays the costs back on their property tax bill while Johnson Controls will design and implement the upgrades.

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