City of Corona

November 2, 2009

Financing Energy Efficiency and WaterConservation Retrofit Improvements

For Western Riverside County

City of Corona

November 2, 2009

AB 811: Contractual Assessments: Energy Efficiency Improvements

• Signed into law on July 21, 2008. Provides opportunities for people with existing homes or businesses to finance the installation of solar and other energy efficiency improvements with loans that would be repaid through property taxes;

• Goal is to remove financial barriers that prevent property owners from installing energy efficiency upgrades by allowing for long term financing; and

• A jurisdiction and an interested property owner would enter into an agreement to finance the installation of energy efficiency sources that are permanently fixed to the structure.

City of Corona

November 2, 2009

BenefitsFor property owners• Doesn’t require “up-front” costs to be borne by the property owner(s);• Provides fixed-rate financing and repayment process via property taxes; • Provides access to financing that may not readily be available through

traditional means, such as home equity loans; and• Investment recaptured through lower utility bills.

For Western Riverside County• Creates an estimated 3,216 jobs;• Provides a mechanism to retrofit thousands of properties and achieve

significant energy savings;• Results in air quality improvements and greenhouse gas emission reductions;

and• Reduces / delays the need for costly infrastructure investments related to

energy production and transmission.

City of Corona

November 2, 2009

Benefits of Subregional Approach

• Economies of scale;

• Reduced burden on local jurisdiction on staffing its own program;

• Leveraging and coordination of funding sources;

• Consistent regional messaging and marketing; and

• Consistent program design and implementation.

City of Corona

November 2, 2009

Eligible Improvements

Staff is in the process of developing a formal eligible listing of improvements that can be financed under the Program. These include but are not limited to:

• Geothermal exchange heat pumps;

• Home EV charging installations;

• Natural gas storage water heater;

• Tankless water heater;

• Windows and glass doors;

• Window filming;

• Home sealing;

• Lighting control systems;

• Solar thermal systems (hot water);

• Solar thermal systems for pool heating; and

• Photovoltaic systems.

City of Corona

November 2, 2009

Example of Costs / Savings / Payments

Avg. Home Electric Bill (annual): $2,300 (Source: Alliance to Save Energy).

Heating and Cooling System: 45% of electric bill (Estimate, Source: Trane).

Install Energy Efficient Heating and Ventilation (HAV) system: $10,000 (Estimate).

Energy Savings (new vs. old): 40% energy savings for HAV system (Source: Trane).

Customer Savings: $414 per year or $34.50 per month.

Tax Credit: 30% of cost up to $1,500 (Source: IRS).

AB 811 Program: Finance $8,500 over 15 years at 4% interest rate to be paid back on tax bill.

Approximate Tax Bill (delta): $754.44 per year or $62.87per month.

City of Corona

November 2, 2009

WRCOG Program Goals

• Implement an Energy Efficiency Program on a subregional scale.

• Target: 189,000 residential and 7,000 commercial properties (pre 2000).– City of Corona has approximately 9,345 residential and 272 commercial

properties that would receive a high rate of return on investment from this type of program.

• Target: $300m program @ $17,500 per residential property, @ $30,000 per non-residential property.

• Offer low interest loans to approximately 13,500 properties (7% of the eligible residential and commercial properties in the subregion) for energy efficiency, water conservation, and solar projects.

• Create an estimated 3,200* new jobs in the subregion and retain potentially 100’s or even 1,000’s of existing jobs.(* based on Obama administration economic advisors job creation report)

City of Corona

November 2, 2009

WRCOG’s Responsibilities

1. Identify and receive funding to implement the Program;

2. Conduct training sessions for contractors;

3. Conduct outreach for the program;

4. Work with the Utilities to have either energy and/or water conservation surveys conducted (this would be done by the Utility or WRCOG staff);

5. Receive, process, and approve/deny loan applications;

6. Receive and answer questions from public on the Program;

7. Process title checks on properties; and

8. Track and report on job creation and job retention in the subregion;

City of Corona

November 2, 2009

Jurisdictional Responsibilities

1. Provide intent to participate in the WRCOG Program by approving resolution and agreement (provided by WRCOG).

2. Process permits for homeowners / businesses as required by jurisdiction.

City of Corona

November 2, 2009

Funding

WRCOG staff is examining a number of funding options:

• WRCOG staff proposes solicitation of a federal loan ($300 million) to implement the subregional program; and

• Loan to be paid off (with interest) over a specified period of time.

• California Energy Commission – State Energy Program;

• California Energy Commission – Energy Efficiency Loan Program;

• Small Business Alliance Micro-lender Program;

• U.S. Department of Energy, National Energy Technology Laboratory “Unsolicited Proposals” Program; and

• Federal stimulus or other funds.

City of Corona

November 2, 2009

Next Steps

Jurisdictions

– Notify WRCOG staff of jurisdictions intent.

• An authorizing resolution and agreement will be needed that authorizes WRCOG to implement the Program on their behalf.

• A draft agreement and resolution is provided.

City of Corona

November 2, 2009

QUESTIONS?

Contact Information:

Western Riverside Council of Governments4080 Lemon Street, 3rd Floor

Riverside, CA 92501

Rick Bishop, Executive Director(951) 955-8303 or e-mail bishop@wrcog.cog.ca.us

Barbara Spoonhour, Program Manager(951) 955-8313 or e-mail spoonhour@wrcog.cog.ca.us