obr edf 1000friendsfl.pptx [read-only] · 2013-08-12 · massive potential for ee in u.s. total...
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On-Bill Repayment
Innovative Models, Strategies for CommunitiesApril 18, 2012April 18, 2012Presented by James Fine
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Massive Potential for EE in U.S.
Total 206,948
150,000
200,000
250,000
Realistically Achievable Potential for Energy Efficiency (GWh)
Residential 64,374
Commercial96,878
Industrial 45,696
-
50,000
100,000
150,000
Source: Assessment of Achievable Potential from Energy Efficiency and Demand Response in the U.S. (2010-2030), EPRI, Palo Alto, 2009,1016987.
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EE Pays More Than It Costs
$24,800,000,000
$15,000,000,000
$20,000,000,000
$25,000,000,000
$30,000,000,000
Savings - Cost = $19 billion
$5,500,000,000
$-
$5,000,000,000
$10,000,000,000
$15,000,000,000
Cost of EE ($0.0264) Retail Savings ($0.12/kWh)
Savings - Cost = $19 billion
Source: Assessment of Achievable Potential from Energy Efficiency and Demand Response in the U.S. (2010-2030), EPRI, Palo Alto, 2009,1016987. Data for 2020.
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CA Has Big, Bold EE Goals
• All existing residences will increase efficiency by 40 percent by 2020.
• Heating, ventilation and air conditioning optimized performance for CA’s climateoptimized performance for CA’s climate
• All eligible low-income customers given opportunity to participate in the low income EE program by 2020
• Zero net energy new buildings
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On-Bill Today (in California)• Utility provides customers with unsecured loans
at zero percent interest
• Only commercial and municipal customers
• Commercial limit is $100,000 for 5 years• Commercial limit is $100,000 for 5 years
• Municipal limit is $1,000,000 for 10 years
• Loan obligation stays with the meter
• Threat of utility service shut-off for non-repayment
� Wildly popular and oversubscribed
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CA On-Bill – Customer Eligiblity
• Only Non-Residential Customers
• Commercial
• Municipal• Municipal
• Industrial
• Must have good credit
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CA On-Bill – Project Eligibility
• Measure/equipment identified in utility rebate/incentive programs
• Energy savings must exceed or equal monthly loan repayment obligation
• Apply by contacting utility account representative
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Number of LoansPG&E SCE SCG SDG&E
Agriculture 4
Commercial 59 739
Industrial 9 35
Institutional 10 112
Multifamily
TOTAL 4 78 28 890
Loan Amounts
CA On-Bill so far
Loan AmountsPG&E SCE SCG SDG&E
Agriculture $ 141,841
Commercial $ 109,600 $ 997,525 $ 16,147,739
Industrial $ 256,411 $ 780,799
Institutional $ 250,000 $ 758,780 $ 4,327,499
TOTAL FUNDED $ 359,600 $ 2,012,716 $ 988,608 $ 21,397,879
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Investment Capital Remains Scarce
• CA programs dwarfed by size of EE opportunity
• Publicly funds cannot scale to opportunity/goal
• Repayment schedule doesn’t match “deep” upgrades
• Demand for EE investments is hampered by many • Demand for EE investments is hampered by many well-documented market failures
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Insufficient Financing Mechanisms • Building/home equity has declined or disappeared
• Unsecured loans
• Philanthropic capital
• Public bonds
• Leases• Leases
• Energy services agreements (ESA)
Thus far, nothing close to size of the opportunity
On-bill repayment (OBR) provides a way to mobilize a new lending industry while reducing consumers’ borrowing costs
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What is On-Bill Repayment (OBR)?• Building owners and occupants repay private loans
for EE and RE via their utility bills
• Loan repayments become tariff on meter
• Utility is compensated for payment services and perhaps for achieving EE goals
• Consumer protections • Contractor certification
• Project eligibility requirements
• Verified project installation
• Energy savings must be expected to exceed loan
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On-Bill Repayment - Advantages
• Creates scalable EE and RE lending mechanism
• No ratepayer or taxpayer funds needed
• Saves energy users money & lowers energy bills
• Puts people to work • Puts people to work
• Avoids power sector pollution
• Brings EE and RE to all types of buildings
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On-Bill Repayment: EDF Proposal
• Projects originated by contractors/developers– Program must be flexible enough to accommodate
variety of contractor business models
• Commercial lenders are likely better equipped to underwrite and fund loansto underwrite and fund loans
– Utility is a payment conduit – Similar to Visa
• Scale and standardization can reduce costs
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Choose OBRContractor confirms project eligibility for
OBR and links customer to financing
OBR: Access for Californians
Project IdentificationCustomer works with certified contractor to identify eligible clean energy upgrades
FinancingProject InstallationContractor completes Yes NoCustomer chooses lender
and signs loan agreementContractor completes
project to specified quality standards
RepaymentRepays financing conveniently
via utility bill at no additional cost or even at cost savings
NO PROJECTYes No
VerificationCertified verifier confirms project installation meets
quality standards
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Significant Program Flexibility• Variety of buildings
– Single family– Multi family– Commercial– Public
• Variety of transaction types– Loans– Loans– Leases– Energy Service Agreements (ESAs)
• Variety of projects– Retrofits– Renewables/CHP– Energy Star Appliances
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Thank you!Jamie Fine / Economist, [email protected]; (916) [email protected]; (916) 710-3371
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Residential Electricity Demand
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Residential EE Potential
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Commercial Electric Demand
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Commercial EE Potential
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Industrial Electricity Demand
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On-Bill Repayment – Who Does What
Originate Project
Execute Project
Underwrite Customer
ProvideCapital
CollectPayments/ Loan Service
Existing On-Bill Programs
Utility Contractor Utility Utility Utility
Programs
Proposed On-BillProgram
Project Developer
Contractor or Project Developer
Lender(Bank)
Lender(Bank)
Utility
•Existing OBF programs require utilities to extend beyond their core competencies•Expensive and inefficient
•Utilities will need to be fully compensated for the resources they provide
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Benefits
• No direct costs to taxpayers or ratepayers
• Creates jobs
• Reduced carbon emissions
• Beneficial to ratepayers through avoided cost of new generation capacity and reduced use of higher cost generation capacity and reduced use of higher cost generation
• Beneficial to utility shareholders through payment processing fees and/or improved performance of utility EE programs
EDF estimates that a statewide OBR program in California could generate annual investment of $2.7 in residential EE and renewable projects, create 20,000 installation jobs and, after 5 years, reduce annual CO2 emissions by 7 million tons.