Florida HB 7179 & Energy Efficient Loan Programs 2011 FESC Tuesday, September 27, 2011 Hal S. Knowles, III Program for Resource Efficient Communities RPR2011 2011 FESC Summit 1
Overview Florida HB 7179 PAF/PACE Qualities of a successful energy efficiency retrofit programs using revolving loan funds Insights from the building science side Discussion RPR2011 2011 FESC Summit 2
For More Information http://www.floridaenergy.ufl.edu/?page_id=273 http://www.buildgreen.ufl.edu/floridaguide_order.pdf RPR2011 2011 FESC Summit 3
Florida HB 7179 Florida House Bill (HB) 7179 provides counties, municipalities, and dependent special districts with the ability to enter into financing agreements with private property owners to fund qualifying building energy conservation/efficiency retrofits, renewable energy generation, and/or wind resistance improvements with repayment occurring through non-ad valorem property assessments on participating properties. RPR2011 2011 FESC Summit 4
Florida HB 7179: Energy Conservation/Efficiency Air sealing and insulating Installing energy-efficient heating, cooling or ventilation systems Building modifications to increase the use of daylight Replacement windows Installing energy controls or energy recovery systems Installing electric vehicle charging equipment Installing efficient lighting equipment Other similar measures to reduce consumption through conservation or more efficient use of electricity, natural gas, propane, or other forms of energy RPR2011 2011 FESC Summit 5
Florida HB 7179: Renewable Energy Biomass Geothermal Hydrogen Solar Wind RPR2011 2011 FESC Summit 6
Florida HB 7179: Wind Mitigation Improving the strength of the roof deck attachment Creating a secondary water barrier to prevent water intrusion Installing wind-resistant shingles Installing gable-end bracing Reinforcing roof-to-wall connections Installing storm shutters Installing opening protections Other similar improvements RPR2011 2011 FESC Summit 7
Florida HB 7179: Financing Program Name Variations Property Assessed Clean Energy (PACE) Property Assessed Financing (PAF) Energy Loan Tax Assessment Programs (ELTAPs) Financing Initiative for Renewable and Solar Technologies (FIRST) Voluntary Environmental Improvement Bonds (VEIBs) RPR2011 2011 FESC Summit 8
Potential Barriers to Action (Beyond $) Lack of information Transaction costs Lack of confidence in expected or anticipated savings Split incentives Length of payback RPR2011 2011 FESC Summit 10
Financial Underwriting Financing Sources: Banks Municipal Bonds Institutional Investors Community Development Financial Institution (CDFI) Qualified Energy Conservation Bonds (QECB) Other RPR2011 2011 FESC Summit 13
Financial Underwriting Methodologies for segmenting, targeting, and soliciting households and businesses with the highest potential to achieve desired goals and objectives Measurable reductions Cost neutral investments Improved occupant comfort Financing & billing vehicles Maximum and minimum loan thresholds and cost eligibility RPR2011 2011 FESC Summit 14
Financial Underwriting Repayment obligation security measures and interests Credit enhancement strategies to improve the attractiveness of the EEFP to prospective borrowers and lenders Leveraged synergies in existing energy efficiency and conservation incentives such as local electric utility demand side management programs and local, state, and federal rebates and tax credits RPR2011 2011 FESC Summit 15
Clean Energy Financing Sponsorship Local Government-Sponsored Financing Program Property Assessments Collected on or in Utility Bill Direct Billing RPR2011 2011 FESC Summit 16
Clean Energy Financing Sponsorship Utility-Sponsored Financing Programs On-Bill Off-Bill Tariff No-Tariff RPR2011 2011 FESC Summit 17
Energy Underwriting Energy consumption baselines and comparative metrics Methodologies and standards for calculating energy savings Fiscally appropriate prerequisite and eligible prequalifying measures (C+E) Tailor approaches based on energy consumptive use data and energy audit feedback Useful lifespan potentials of measures (C+E) Homeowner education pedagogy and curricula Energy auditor and building contractor solicitation, qualification, training, verification, management, and renewal RPR2011 2011 FESC Summit 18
Loan Servicing Standardized procedures, methodologies, mechanisms, and documentation: Loan application, disbursement, repayment, default, and reporting processes and other related intake and processing criteria Customer service, management, and protection strategies Data collection, automation, and tracking measures Financial quality assurance (QA) and quality control (QC) protocols RPR2011 2011 FESC Summit 19
Energy Measurement & Verification Measurement and verification (M&V) protocols Building performance quality assurance (QA) and quality control (QC) protocols Estimating potential ROI for financed building improvements Verify persistence of performance RPR2011 2011 FESC Summit 20
Effect of Program Attributes Lower Interest Rate Higher Senior Lien Junior Lien Springing Lien UCC1/Asset Based Unsecured Property Attached Borrower Attached On-Bill Repayment Separate Enclosure in Utility Bill Separate Billing Multiple Credit Enhancements Creditworthy Property Creditworthy Borrower Attributes Performance Energy Measures (More Efficient) No Credit Incentives Riskier Property Riskier Borrower Attributes Prescriptive Energy Measures (Less Efficient) RPR2011 2011 FESC Summit 21
Hypothetical Calculations Potential Avg. Savings with Retrofit Improvements Avg. Monthly Bill Package A Package B Package C 30% energy 30% water 10% insurance 30% energy 30% water 30% energy Electricity @ $300 $90 $90 $90 Water @ $60 $18 $18 $0 Insurance @ $250 $25 $0 $0 Total Savings $133 $108 $90 RPR2011 2011 FESC Summit 22
Hypothetical Calculations Package C - Size & Terms of Loan for Financially Neutral Outcome Loan Term 8% 7% 8% 9% 10 years $8,106 $7,751 $7,471 $7,104 15 years $10,665 $10,013 $9,417 $8,873 20 years $12,562 $11,608 $10,759 $10,003 RPR2011 2011 FESC Summit 23
Energy is the ability to do work, & with a big enough hammer Source: www.istockphoto.com
22,658 human hours (or) one human for 10.9 years (or) 330 miles in a VW bus Source: http://www.istockphoto.com/stock-photo-13999264-old-rusty-car.php
What uses more energy? How we dwell? Or how we move? For conservation, there s no place like home! 26 2011 FESC Summit Source: Kathryn Ziewitz, University of Florida Especially in Florida
27 2011 FESC Summit HERS Reference Home (1500 sq ft 3 bed) North Florida
28 2011 FESC Summit Annual Cooling Load (1500 sq ft 3 bed) Central Florida
House = Series of Nested Systems 29 2011 FESC Summit Source: http://www.genewscenter.com/imagelibrary/detail.aspx?mediadetailsid=2369
Sustainable Dwelling (n. or v.) = Audit + Act + Adapt Source: http://hes.lbl.gov/consumer Source: Hal Knowles, University of Florida 30 2011 FESC Summit
Step 1: Air Seal Source: Iowa Energy Center. Home Series 1: Home Tightening, Insulation and Ventilation. Source: http://www.energystar.gov/index.cfm?c=home_sealing.hm_improvement_sealing 31 2011 FESC Summit
Air Sealing Example: House 814 Source: John Linhoss, University of Florida 32 2011 FESC Summit
Results: House 814 House Pressure (Pascals) Flow Rate (cfm) BEFORE WEATHERIZING Flow Rate (cfm) AFTER WEATHERIZING 50 1669 1482 45 1560 1377 40 1417 1258 35 1342 1178 30 1224 1077 11.2 % decrease in air infiltration Originally built 1985 & Remodeled 2003 1200 sq.ft. single story ACH50 8.84 33 2011 FESC Summit
Step 2: Repair Ductwork Source: NREL PIX #04913 (http://www.nrel.gov/data/pix/) Source: http://www1.eere.energy.gov/consumer/tips/ducts.html 34 2011 FESC Summit
Step 3: Insulate Source: Craig Miller, University of Florida 35 2011 FESC Summit Source: NREL PIX #15100 (http://www.nrel.gov/data/pix/)
Step 4: Evaluate Windows U-Factor ( 0.65 ) Visible Transmittance ( Higher = Better ) SHGC ( 0.40 ) Air Leakage ( 0.30 cfm/sq ft ) 36 2011 FESC Summit