Financing Single Family Residential Energy Efficiency

Retrofits

Adam ZimmermanEnterprise CascadiaNovember 3, 2010

Why engage in EE consumer finance?

• CDFI Brand: If we don’t the carbon economy will be just about carbon, not opportunity

• Positioned: Seizing the opportunity at the earliest stages of an emerging industry

• Policy: Removing the obstacles to policy innovation and unleashing huge demand– In turn creating markets that deliver

outcomes• Regional: CO2 demands regional response

and aggregated resources• Resource: Substantial and sustained to

bottom line

Outcomes to Date

Access to Credit (Inclusion) Access to Opportunity (Jobs)

% Borrowers < Median HH Income66%

Program $ Paid to W&M Firms23%

% Borrowers Non-White16.5%

Average Wage$25.19

% Borrowers in CDFI Tracts30%

% of Employees Women/Minority50.9%

% Subordinated Debt90%

% of Employees with Health Care73%

Market MakerGoal: Shift the residential energy efficiency market to an environment where action to improve the efficiency of homes is as easy as buying a car with better gas mileage.

• Standardized product offering with options• Standardized & auditable performance rating• Widely branded “outlets” for sales• Affordable, easy to access financing terms• Warranty and peace of mind (value proposition)

Ultimately, the product must remove obstacles to policy decisions that drive markets to

“value” efficiency

Product Specifications• CO2 Matters: Energy usage screen

– Prioritize the greatest CO2 impact• Low Touch Underwriting

– Non-Traditional: Utility payment history, FICO >590– IT Platform: Linked to utilities and loan management

• Product Specifications– Rate: 5.99% (3.99% for <250% Federal Poverty)– Term: 20 years– Security: subordinated lien on property – Servicing: on bill of utility providing energy for heat– Risk: Cash funded loan loss reserve: 10%– Affordable: Goal is net zero impact on the family

budget

Cross Selling Aligned Products

• Efficiency Contractor Finance

Goal: Support business productivity and growth to meet demand • Provide access to working

capital • Blanket loan agreements

for individual contract advances

• Incent quality assurance • Build credit management

capacity• Enhance relationships with

suppliers and subs• Lay groundwork for supply

chain management

• Start Up for New Entrants

Goal: Create access to the market for emerging firms historically under-represented in this space.• Program preference for

underserved and rural firms

• Dedicated technical assistance, training, and certification support

• CDFI capital enhanced by community partners

• Partnerships with existing firms

OutputsYTD 2010 Actual 2010 Projected

Year-end2011 Projected

(Portland+Seattle+ Rural)

Homes Retro-fitted247

Homes Retro-fitted550

Homes Retro-fitted1,000

Loans Dollars Outstanding

$3,102,000

Loans Dollars Outstanding

$6,200,000

Loans Dollars Outstanding

$20,000,000

Simple ROI4.9%

Simple ROI5%

Simple ROI5.2%

Participating Contractors

21

Participating Contractors

25

Participating Contractors

50