DRAFT Report - Energy Data Web...Figure 34. Survey Respondent’s Preferred Method to Receive...

Public Sector Market

Characterization Financing

Study - DRAFT Report

Prepared by The Energy Coalition (TEC) on behalf of SoCalREN Public Agency Programs with contributions from TRC

January 6, 2021

SoCalREN Public Sector Market Characterization Financing Study - DRAFT Report | Page 1

Contents

List of Tables 5List of Acronyms and Abbreviations 61. Executive Summary 10

1.1 Introduction and Methodology 10

1.2 Key Findings 13

1.3 Summary of Recommendations 19

2. Introduction 20

2.1 Study Overview and Purpose 20

2.2 Role of Funding, Financing, and Support Services in Energy Efficiency Projects in California 21

2.3 Study Questions 22

2.4 Study Limitations 23

2.4.1 Alteration Type 23

2.4.2 Project Type 24

2.4.3 Climate Zone and IOU Service Territory 24

3. Methodology 25

3.1 Terms and Definitions 25

3.2 Market Segmentation 27

3.2.1 Procurement 27

3.2.2 Services 28

3.2.3 DAC Methodology 28

3.3 Data Sources 29

3.4 Survey Design 30

3.5 Interviews with Public Agencies 31

4. Analysis of Results 31

4.1 Literature Review 31

4.1.1 2010-2012 CA IOU On-Bill Financing Process Evaluation and Market Assessment 32

4.1.2 Evaluation of the On-Bill Financing - Alternative Pathway, PY2018-2019 32


4.1.3 Energy Efficiency Financing in California Needs and Gaps: Preliminary Assessment and Recommendations 33

4.1.4 Expanding the Energy Efficiency Pie: Serving More Customers, Saving More Energy Through High Program Participation 33

4.1.5 Municipal Energy Efficiency and Greenhouse Gas Emissions Reduction: Financing and Implementing Energy Efficiency Retrofits in City-Owned Facilities 34

4.2 Overview of Market 35

4.3 Participation Trends 344.4 Market Actor Feedback 385. Conclusions and Recommendations 62

6. Appendix A: Bibliography 68

7. Appendix B: Data Collection Instruments 71

7.1 Online Survey Instrument 71

7.2 Interview Guide 83

8. Appendix C: Data Analyses 86

8.1 Market Overview Analysis 86

8.2 Claims Data Analysis 86

8.3 Survey Response Analysis 86

8.4 Interview Response Analysis 84


List of Figures

Figure 1. Annual Number of Projects per IOU 13

Figure 2. Full Rebate Amount Distribution 13

Figure 3. Survey Respondent’s Typical Energy Efficiency Project Cost 14

Figure 4. Survey Respondent’s Program Rating by Project Size 15

Figure 5. Survey Respondent’s Rebate Threshold as Percent of Gross Project Cost 16

Figure 6. Survey Respondent’s Interest Rate Threshold based on Project Size 16

Figure 7. Survey Respondent’s Technical Assistance Preferences by Project Size 17

Figure 8. Interview Respondent’s Program Satisfaction Sore 18

Figure 9. Pollution Burden and Population Characteristics indicators used by CalEnviroScreen 28

Figure 10. Annual Number of Projects per IOU 36

Figure 11. Number of Projects by Program Type per IOU 37

Figure 12. Distribution of Full Rebate Amount 37

Figure 13. Distribution of Rebate as a Percentage of Project Cost 38

Figure 14. Number of Projects by Market Segment per IOU 39

Figure 15. Number of Projects by Program Type per Market Segment 39

Figure 16. Survey Respondent’s Typical Energy Efficiency Project Cost 41

Figure 17. Survey Respondent’s Financial Metrics Rating for Projects less than $45,000 42

Figure 18. Survey Respondent’s Financial Metrics Rating for Projects between $45,000 and $175,000 42

Figure 19. Survey Respondent’s Financial Metrics Rating for Projects between $175,000 and $1M 43

Figure 20. Survey Respondent’s Financial Metrics Rating for Projects greater than $1M 43

Figure 21. Survey Respondent’s Rebate Importance Rating by Project Size 45

Figure 22. DAC Agencies' Rebate Importance Rating by Project Size 45

Figure 23. Survey Respondent’s Rebate Threshold Preference by Project Size

Figure 24. Survey Respondent’s Rebate Threshold Preference as Percentage of Gross Project Cost 46

Figure 25. Survey Respondent’s Financing Importance Rating by Project Size 48


Figure 26. DAC Agencies’ Financing Importance Rating by Project Size 48

Figure 27. Survey Respondent’s Interest Rate Threshold by Project Size 49

Figure 28. Survey Respondent’s Maximum Interest Rate Preference 50

Figure 29. Survey Respondent’s Preferred Debt Service Payment Method 51

Figure 30. Survey Respondent’s Rebate Timing Importance Rating by Project Size 52

Figure 31. DAC Agencies’ Rebate Timing Importance Rating by Project Size 52

Figure 32. Survey Respondent’s Financing Timing Importance Rating by Project Size 53

Figure 33. DAC Agencies’ Financing Timing Importance Rating by Project Size 53

Figure 34. Survey Respondent’s Preferred Method to Receive Financing Funds 54

Figure 35. Survey Respondent’s Technical Assistance Importance Rating by Project Size 55

Figure 36. DAC Agencies’ Technical Assistance Importance Rating by Project Size 55

Figure 37. Survey Respondent’s Technical Assistance Service Preference by Project Size 56

Figure 38. Survey Respondent’s Program Rating by Project Size 59

Figure 39. DAC Agencies’ Average Program Rating by Project Size 60

Figure 40. Interview Respondent’s Program Satisfaction Score 60


List of Tables

Table 1. Breakdown of Market Segment in California 12

Table 2. Survey Responses Rating Scale 14

Table 3. Survey Respondent’s Program Rating 17

Table 4. Breakdown of Market Segment in California 34

Table 5. Percentage of Disadvantaged Communities within Municipal Governments 34

Table 6. Percentage of Disadvantaged Communities within School Districts 35

Table 7. Percentage of Disadvantaged Communities within Special Districts 35

Table 8. Quantity of Project Size and Percentage of Project Cost 36

Table 9. Breakdown of Survey Respondents 40

Table 10. Breakdown of Interview Respondents 40

Table 11. Survey Responses Rating Scale 44

Table 12. Breakdown of Technical Assistance Service Preference by Project Size and Respondent’s DAC Status 57

Table 13. Survey Respondent’s Reasons for Lack of Energy Efficiency Program Participation 57

Table 14. Interview Respondent's Program Ranking 60


List of Acronyms and Abbreviations

Acronym/Abbreviation Description

ACEEE American Council for an Energy-Efficient Economy

ARRA American Recovery and Reinvestment Act

CalEPA California Environmental Protection Agency

CCA community choice aggregation

CEC California Energy Commission

CEDARS California Energy Data and Reporting System

CIA commercial, industrial, and agricultural

COVID-19 coronavirus disease 2019

CPUC California Public Utilities Commission

CRM customer relationship management

CUPCCAA California Uniform Public Construction Cost Accounting Act

DAC disadvantaged community

DERs distributed energy resources

ECCA CEC’s Energy Conservation Assistance Act

EE energy efficiency

EFAB Environmental Financial Advisory Board

EM&V evaluation, measurement, and verification

G&I government and institutional

GHG greenhouse gas

GIS geographic information system

GSA General Services Administration

HB&C Harcourt Brown & Carey, Inc.

HVAC heating, ventilation, and air conditioning

IOU investor-owned utility

IRR internal rate of return


K-12 from kindergarten to 12th grade

KPI key performance indicator

LCC life-cycle cost

LED light-emitting diode

NMEC normalized metered energy consumption

NPV net present value

OBF on-bill financing

OEHHA California Office of Environmental Health Hazard Assessment

PA program administrator

PG&E Pacific Gas and Electric Company

RCx retrocommissioning

REN regional energy network

ROI return on investment

SCE Southern California Edison

SDG&E San Diego Gas & Electric

SoCalGas Southern California Gas Company

SoCalREN Southern California Regional Energy Network

SPP simple payback period

TEC The Energy Coalition

TRC TRC Companies, Inc.

US DoE United States Department of Energy

US EPA United States Environmental Protection Agency


1. Executive Summary

1.1 Introduction and Methodology

Public sector participants in ratepayer-funded energy efficiency programs receive a range of

financial products and services, but it is unclear which ones most effectively encourage

participation and what gaps are not being addressed. Increasingly stringent energy code and

appliance standards are reducing the availability of rebates, incentives and associated financing

programs, resulting in reduced program participation.1

Public sector energy efficiency projects are typically funded with taxpayer dollars, which

introduces a higher degree of scrutiny over budgets, expenditures, and procurement practices

than other sectors. In addition, local government and public school budgets are being negatively

impacted by COVID-19 and it is anticipated that this financial strain will create additional and

significant barriers to the prioritization of funding for clean energy projects, including energy

efficiency.2 To ensure ratepayer-funded programs are designed to effectively deploy resources to

public sector customers, Program Administrators (PAs) require a more granular understanding of

this sector’s needs.

The goal of this study is to provide valuable insight into public agencies’ needs in order to

develop effective project financial services and/or products. To achieve this goal, the study

aims to meet several objectives, including to:

● Develop a ranked order for energy efficiency rebates, financing products, and support

services offered to public agencies

● Determine the threshold of effectiveness for rebates as a percentage of the gross project

cost

● Determine the maximum interest rate threshold for financing products

● Determine the impact of timing of receipt of rebates and/or financing on project

implementation

● Determine if public agencies serving disadvantaged communities (DACs) value financing

products and services differently from agencies not serving DACs

● Evaluate potential variation in these preferences by public agency subsector and project

size

These study goals were converted into a series of questions for the study team to investigate:

1. For public sector customers, what is the typical gross cost for an energy efficiency project?

2. What are the key financial performance metrics for energy efficiency projects for public

agencies?

1 Based on analysis of IOU claims data for program years 2016-2019. Data source: California Energy Data and

Reporting System (CEDARS). See Section 4.3. 2 League of California Cities, "COVID-19 Fiscal Impact on California Cities Infographic." 2020. Available at:

https://www.cacities.org/Images/COVID19-Fiscal-Impact-on-CA-Cities-Infographic-FIN.aspx

https://www.cacities.org/Images/COVID19-Fiscal-Impact-on-CA-Cities-Infographic-FIN.aspx


3. What minimum rebate, as a percent of project cost, will entice a customer to complete an

energy efficiency project? How does this vary with the scale of project cost?

4. What is the maximum interest rate acceptable for financing programs? Is a zero interest

loan significantly more valuable than a low interest loan?

5. Do on-bill financing options address the public sector’s resistance to taking on debt?

6. What is the impact of timing of receipt of rebates and/or financing on project

implementation?

7. Is there a relationship between project cost and the need for financial products and support

services? How do existing rebate, financing, and technical assistance programs fit

different project sizes, as measured by construction value?

8. Which product or service is the most critical to completing energy efficiency projects:

rebates, financing, or technical assistance programs?

9. Which financial products and/or support services are most valuable to public agencies

serving DACs?

10. Do rebate, financing, and technical assistance program preferences vary by public agency

subsector?

For the purposes of this study, an energy efficiency project was defined as a retrofit of existing

facilities. This may include equipment replacement, controls upgrades, retrocommissioning, or

similar activities that are primarily driven by energy usage reduction. New construction projects

were not considered in this study. Variables not considered include project type, agency size,

geographic location, and investor-owned utility (IOU) service territory. In order to evaluate a

statewide market agnostic to the program administrators operating in a given region or IOU

territory, these programs were grouped into 3 general categories.

● Rebate: Program provides cash incentive used to reduce overall project cost. This

category is inclusive of upstream, midstream, and downstream program delivery methods

and deemed, calculated, and NMEC-based savings calculation methodologies. Direct

install programs are also included in this category. However, in the context of this study,

energy efficiency rebates may be offered by other parties operating outside of ratepayer-

funded programs.

● Financing: Program provides a loan to distribute the cost of the project over time. This

category encompasses debt-service options, including ratepayer-funded programs such

as on-bill financing (OBF), conventional market rate loans, and third-party financing

concepts such as energy performance contracting and operating leases. Bonds were not

included in this category due to the more complex and multi-jurisdictional decision-making

process involved in raising capital using this method.

● Technical Assistance: Program reduces overall cost of project by supporting project

development and/or implementation through services, rather than direct financial

assistance. Examples of technical assistance include facility energy benchmarking,

energy audits, financial analysis, procurement support, and project management.

Consistent with the other two program categories, these programs may be offered by non-

ratepayer-funded programs.


Project size was an important variable to consider in this study. Public agencies face unique

barriers to capital project implementation due to state and local regulations regarding funding and

procurement. To account for the impact of this barrier on public agency program preferences, the

study team created project size tiers for use in evaluating utility claims data and survey responses.

For the purposes of this study, the 2018 California Uniform Public Construction Cost Accounting

Act3 (CUPCCAA) limits were used to establish the Small (<$45,000), Medium ($45,000-

$175,000), and Large ($175,000-$1M) project tiers. The threshold for the Very Large project tier

(>$1M) was assigned based on the on-bill financing limit for government & institutional customers

of Southern California Edison of $1M per service account.4

The study team identified DAC status as a cross-cutting market segment. Survey and interview

responses were analyzed for preferences and patterns unique to this subset of respondents (see

Section 4). This study relied on the CalEnviroScreen5 screening tool developed for the California

Environmental Protection Agency (CalEPA) to determine which public sector customers serve

DACs.

The study involved 4 data collection and analysis tasks: a review of relevant studies and reports,

IOU claims data analysis, a quantitative online survey of public agency contacts, and a series of

interviews with public agencies.

The first task undertaken by the study team was to evaluate pre-existing studies and reports

regarding public sector energy efficiency project rebate, financing, and technical assistance

program preferences.

A data request was submitted to PG&E, SCE, SoCalGas and SDG&E for a list of energy efficiency

measure claim identifiers that meet certain criteria. Each IOU was requested to provide Program

Administrator claim IDs for commercial custom, commercial deemed, on-bill financing (OBF),

American Recovery and Reinvestment Act (ARRA) financing, third party financing, and new

financing programs for program years 2016-2019 for local government participants. The purpose

of collecting data that meet these criteria was to analyze correlations between rebate size and

project cost by project type and public sector market segment, as well as financing program

participation. The goal of the analysis was to address key study objectives regarding rebate

thresholds and customer preferences for ratepayer-funded financing programs.

An electronic survey was designed and implemented for this project to collect insight into the

needs, uses, and decision-making processes of public agencies related to energy efficiency

project financing.

3 California Uniform Construction Cost Accounting Commission, “Cost Accounting Policies and Procedures Manual.”

2019 Edition. 4 SCE On-Bill Financing Fact Sheet. Available at: https://www.sce.com/sites/default/files/inline-

files/OBF%20Fact%20Sheet%201119_WCAG.pdf 5 CA OEHHA CalEnviroScreen. Available at: https://oehha.ca.gov/calenviroscreen/about-calenviroscreen

https://www.sce.com/sites/default/files/inline-files/OBF%20Fact%20Sheet%201119_WCAG.pdf


https://oehha.ca.gov/calenviroscreen/about-calenviroscreen


One-on-one interviews were conducted as part of this project to gain a more in-depth

understanding of public agency motivations, perceptions, and decision-making related to

financing for energy efficiency projects.

1.2 Key Findings

Over half of the roughly 3,500 public agencies in California are special districts, which include

publicly owned water districts, irrigation districts, sanitation districts, community service districts,

and other local government agencies that utilize rate recovery as a primary funding source. The

fact that the majority of public agencies are considered special districts suggests the need to

further categorize this market segment to better understand different needs within it.

Disadvantaged communities make up 37% of municipal governments, 48% of school districts,

and 25% of special districts.

Table 1. Breakdown of Market Segment in California

Market Segment Count % of Total

Municipal Governments 665 19%

School Districts K-12 820 24%

Special Districts6 1,972 57%

Total 3,457 100%

Overall, public sector participation in commercial deemed and calculated programs has been

trending down over the past 3 years, mainly focused in PG&E and SCE territories, which together

account for 64% of all projects across the study period.

6 Publicly owned water districts, irrigation districts, sanitation districts, community service districts, and other local

government agencies that utilize rate recovery as a primary funding source.


Figure 1. Annual Number of Projects per IOU

Deemed incentives appear to be considerably more popular than calculated, making up 82% of

all projects with either calculated or deemed incentives and the overwhelming majority of projects

for PG&E, SoCalGas, and SDG&E. When looking at the rebate amounts received for all projects

with calculated or deemed incentives, the majority are under $5,000 and account for either less

than 30% or between 60-70% of the total project cost.

Figure 2. Full Rebate Amount Distribution

Survey questions were structured to ask respondents to select from project size categories for

typical budget ranges and to select their preferred financial KPIs for each project size category.


Among all respondents, the medium project budget range was selected most often, with small

and large projects close behind. The very large project budget category was selected only 5 times

out of 26 survey respondents. There was no apparent difference in responses between DAC and

non-DAC agencies. Interview responses affirm the finding that energy efficiency project budgets

can range widely.

Figure 3. Survey Respondent’s Typical Energy Efficiency Project Cost

Based on survey responses, simple payback period and return on investment are the most

important financial KPIs. Both metrics become more important as project cost increases.

However, interview respondents consistently stated that projects are driven by more than a single

financial metric. Agencies with energy-related policy goals may pursue projects for reasons other

than direct financial benefit, such as greenhouse gas emissions reductions or net-zero energy

targets.

Survey and interview respondents were asked a series of questions regarding program

preferences that focused on program awareness, importance, and satisfaction. For program

importance scores, respondents were asked to select from the following rating scale for each

project size category:

Table 2. Survey Responses Rating Scale

1 - Not A Factor

2 - Slightly Important

3 - Important 4 - Very Important

5 - Essential Unsure


Figure 4. Survey Respondent’s Program Rating by Project Size

Survey responses indicate that the importance of all programs increases with project size. Large

and very large projects need substantially more support, and technical assistance programs are

the most important of the three program categories at projects of that scale. For small and medium

projects, rebates are the most important program type. Financing was consistently rated below

the other program types. Trends among DAC agencies were mostly consistent with the overall

trends, though DACs indicated even higher need for program support at larger project sizes.

Technical assistance programs also received the highest rankings and satisfaction scores from

interview respondents.

The survey also included program-specific questions to investigate rebate threshold, interest rate

threshold, and technical assistance service preferences. Rebate threshold increases with project

size, but is consistently lower across all project sizes for DAC agencies. Interest rate threshold

decreases with project size, but for DAC respondents, the threshold holds steady at 1.5%.

Respondents indicated that energy audits and financial analysis are universally important across

all project sizes, and procurement support services become more important as project cost

increases. Trends among DAC agencies were consistent with the overall set of responses.


Figure 5. Survey Respondent’s Rebate Threshold as Percent of Gross Project Cost

Figure 6. Survey Respondent’s Interest Rate Threshold based on Project Size


Figure 7. Survey Respondent’s Technical Assistance Preferences by Project Size

Survey and interview respondents also identified program type-specific barriers. Rebate

programs often involve a series of application steps to ensure that rebates are calculated properly

and that installed projects successfully deliver energy savings. Survey respondents noted that

incentive application paperwork and processing is a significant drain on resources. Interview

respondents identified administrative burden as a drawback and also noted the challenge of

accommodating uncertain or inconsistent incentive process timelines into the structured fiscal

calendar and operating rhythm of the public sector.

Study participants also identified financing program barriers. Some interview respondents from

large public agencies stated that on-bill financing creates accounting and tracking challenges

when an agency has dozens or even hundreds of utility accounts to manage. Multiple agencies

also identified reporting requirements for some energy efficiency financing programs as an

obstacle. Survey and interview respondents suggested that allowing financing payments to go

directly to the contractor or service provider, instead of having to flow through the agency, would

make financing programs more valuable for energy efficiency projects.

An overall observation from interview responses is that agencies with energy-related policy

objectives may evaluate projects differently; greenhouse gas (GHG) emissions reductions,

resiliency, and zero net energy targets can drive project investment even when traditional financial

performance metrics are not met.

Table 3. Survey Respondent Program Rating

Program Ranking

Rebate Financing

Technical

Assistance

Average 2.5 1.9 1.6


Figure 8. Interview Respondent’s Program Satisfaction Sore

1.3 Summary of Recommendations

● Public sector programs should consider and value non-financial project drivers, such as

building occupant comfort or avoided GHG emissions, when designing program eligibility

criteria. Requiring projects to meet a single financial performance metric, such as a simple

payback period, does not fully capture the customer rationale for energy efficiency project

investment and may limit or prevent program participation by public agencies.

● The decision-making process for public agency customers considers a rebate’s impact on

gross measure cost, rather than the cost difference between standard practice and high

efficiency options. Rebates that scale more closely with project cost by focusing on gross

avoided energy usage, rather than incremental avoided energy usage, would be more

effective in encouraging energy efficiency project investment.

● Given the higher importance scores for financing for large or very large projects, program

administrators should continue to offer low- or no-interest financing products for projects

>$175,000 with higher loan limits to meet the needs of the public sector. Products targeted

for agencies serving DACs should hold interest rates under 1.5% to encourage

participation.

● Rebate and incentive programs should have clear timeframes for application submittal,

approval, and disbursement that align with public agency fiscal schedules. Programs that

require participants to adjust or delay project schedules to accommodate approval

processes are less accessible to public sector customers. Programs that make payments

directly to contractors or vendors are better suited to address timeline constraints, but

requiring agencies to use specific products or vendors may conflict with public agency

procurement regulations, particularly for larger projects.

● In general, public sector customers need more support from rebate, financing, and

technical assistance programs in order to complete deeper and more expensive retrofit

projects. DAC agencies need an even higher level of support for medium-sized projects

and above. Regulatory processes or program requirements that apply higher levels of


eligibility rigor or complexity for larger projects, due presumably to increased program

resource consumption and risk exposure, create barriers to participation for deeper energy

efficiency projects and ultimately fail to address this key market need. Programs that

provide incentives or rebates for small individual measures or projects should be updated

to provide financial products or services that can scale proportionally with project size and

depth of retrofit.

● Technical assistance programs remove multiple barriers to energy efficiency project

implementation. The findings of this study support the need for technical assistance

programs that can support public agency energy efficiency initiatives across the state, and

the data suggest that rebate and financing programs should be paired with a technical

assistance program as often as possible in order to improve access and participation.

● DAC customers have an even greater need for technical assistance programs. If budget

carve-outs and minimums are used as a policy approach to achieve a minimum portion of

program or portfolio participation by DAC customers, then technical assistance programs

must be prioritized in the funding allocation.

● A statewide market characterization study of the differences in program preferences

among municipal governments, school districts, and special districts requires a substantial

data collection effort. IOU PAs may be better positioned to conduct such a study using

their own claims data and by leveraging their customer service teams to collect feedback

from agencies.

2. Introduction

2.1 Study Overview and Purpose

The Program Administrators (PAs) urgently need a market characterization study of the newly

categorized public sector. Because the public sector was previously included as part of the

commercial sector, very little information exists specific to the public sector. Through California’s

Energy Efficiency Rolling Portfolio, PAs and third party program implementers are in the process

of designing a comprehensive set of programs to meet the unique needs of public sector

customers. Now, PAs require an even deeper understanding of the public sector’s challenges and

opportunities to continue to meet their needs. In particular, the role of financial offerings, such as

rebates and project financing, needs to be investigated to maximize the development and

completion of high value energy efficiency projects.

Public sector participants in ratepayer-funded energy efficiency programs receive a range of

financial products and services, but it is unclear which ones are most effective in encouraging

participation and what gaps are not being addressed. Increasingly stringent energy code and

appliance standards are reducing the availability of downstream rebates, incentives and

associated financing programs, negatively impacting program participation rates. Public sector

energy efficiency projects are typically funded with taxpayer dollars, which introduces a higher

degree of scrutiny over budgets, expenditures, and procurement practices than other sectors. In

addition, local governments and public school budgets are anticipated to be negatively impacted


significantly for the next several years as a result of COVID-19. To ensure ratepayer-funded

programs are designed to deploy resources effectively to public sector customers, PAs require a

more granular understanding of this sector’s needs.

This study will focus on public sector preferences for energy efficiency funding, financing, and

support programs in the context of retrofit projects to support the design of public sector programs

that maximize participation and energy efficiency savings.

The goal of this study is to provide valuable insight into public agencies’ needs in order to

develop effective project financial services by meeting several study objectives, including to:

● Develop a ranked order for energy efficiency rebates, financing products, and support

services offered to public agencies

● Determine the threshold of effectiveness for rebates as a percentage of the gross project

cost

● Determine the maximum interest rate threshold for financing products

● Determine the impact of timing of receipt of rebates and/or financing on project

implementation

● Determine if public agencies serving disadvantaged communities (DACs) value financing

products and services differently

● Evaluate potential variation in these preferences by public agency subsector and project

size

Given the drastic economic impacts of the COVID-19 crisis, understanding the financial support

needs of the public sector is even more essential to PAs and implementers seeking to serve these

customers. In a recession, public agencies will experience increased scrutiny over the use of tax

revenue and the delivery of public goods and services. This study will provide valuable insight on

public agency needs and will help develop critical energy project financial services as these

customers weather a challenging economic climate.

2.2 Role of Funding, Financing, and Support Services in Energy

Efficiency Projects in California

California has been at the forefront of energy efficiency and its commitment has resulted in many

efficiency programs across the state. The programs provide economic and environmental benefits

across all sectors, such as reducing greenhouse gas emissions and lowering customers’ utility

bills. According to the California Public Utilities Commission’s (CPUC) Regulating Energy

Efficiency report7, energy efficiency is predicted to contribute to 15 percent of the state’s

greenhouse gas emission reduction targets.

The IOU programs are ratepayer funded through customers’ electricity and gas bills and are

administered by the state’s four IOUs: Pacific Gas and Electric Company (PG&E), Southern

7 CPUC, “Regulating Energy Efficiency: A Primer on the CPUC’s Energy Efficiency Programs.” 2016.


California Edison (SCE), San Diego Gas & Electric (SDG&E), and Southern California Gas

Company (SoCalGas). Other programs are administered by CCAs and Regional Energy

Networks. Although the programs span across the residential, commercial, industrial, and

agricultural sectors, this study will be focused on the newly categorized public sector.

The Southern California Regional Energy Network (SoCalREN) has served the public sector

through its portfolio of programs since 2013. The SoCalREN Public Agency Programs have

helped customers in SCE and SoCalGas territories achieve over $50 million in annual energy

cost savings by supporting hundreds of energy efficiency projects at public facilities. All of these

projects have relied on energy efficiency rebates, project financing, support services, or a

combination of all three. As the third party implementer for these programs, The Energy Coalition

(TEC) has connected agencies to IOU funding sources, such as rebates, incentives and on-bill

financing (OBF), and non-IOU funding sources, such as the California Energy Commission’s

Energy Conservation Assistance Act (ECAA) loans and Proposition 39 grant funding for energy

efficiency retrofits in schools. TEC also helped SoCalREN to launch its own Revolving Loan Fund

using funds from the American Recovery and Reinvestment Act (ARRA).

As Title 24 code advances, requiring higher efficiency baseline equipment and control systems,

some incentivized energy efficiency measures offered by the IOUs are sunsetting due to cost

effectiveness concerns. When this happens, rebates, financing, and technical assistance services

tied to energy efficiency measures become less accessible. For example, OBF programs offered

by the IOUs have historically been effective in encouraging rebate program participation.

However, OBF is generally only available for energy efficiency measures that qualify for rebates

or incentives through other core programs, and as rebate offerings decrease, so does the

availability of OBF. PG&E’s OBF Alternative Pathway program is a notable exception.8 IOU

normalized metered energy consumption (NMEC) programs may offer a limited alternative

method of accessing OBF for eligible projects, but there is a clear need to explore other solutions

to support public sector energy efficiency projects.

2.3 Study Questions

The final study plan identified a set of specific questions that focused on three program categories:

rebates, financing, and technical support.9 During the course of the study, the evaluation team

identified additional contextual questions that would be necessary to provide a more complete

picture of the decision-making process involved in public sector energy efficiency projects. In

particular, market feedback on the use of key financial performance indicators (such as simple

payback, return on investment, or net present value) to assess energy efficiency project viability

provides important context for assessing the impact of rebates and financing. For example, if an

agency evaluates projects based on net present value, low interest financing programs with longer

8 PG&E, “PUBLIC UTILITIES COMMISSION REVISED." 2016. Available at:

https://www.pge.com/nots/rates/tariffs/tm2/pdf/GAS_3697-G-A.pdf 9 The Energy Coalition, "Public Sector Market Characterization Financing Study Research Plan.” Prepared for

Southern California Regional Energy Network, 2020. Available at: https://pda.energydataweb.com/api/view/2395/SoCalREN%20Public%20Sector%20Market%20Characterization%20Financing%20Study%20-%20DRAFT%20Research%20Plan.pdf

https://www.pge.com/nots/rates/tariffs/tm2/pdf/GAS_3697-G-A.pdf

https://pda.energydataweb.com/api/view/2395/SoCalREN%20Public%20Sector%20Market%20Characterization%20Financing%20Study%20-%20DRAFT%20Research%20Plan.pdf

https://pda.energydataweb.com/api/view/2395/SoCalREN%20Public%20Sector%20Market%20Characterization%20Financing%20Study%20-%20DRAFT%20Research%20Plan.pdf


loan terms may be more effective in improving net present value than equipment rebates.

Questions regarding financial performance indicator metrics were added to the survey and

interview guides and placed ahead of questions regarding program preferences. Other contextual

questions in the survey and interview guide focused on typical project budgets and frequency of

project implementation. Some questions were revised or removed due to limitations in data

availability and study scope.

The updated set of study questions is provided below:

1. For public sector customers, what is the typical gross cost for an energy efficiency project?

2. What are the key financial performance metrics for energy efficiency projects for public

agencies?

3. What minimum rebate, as a percent of project cost, will entice a customer to complete an


4. What is the maximum interest rate acceptable for financing programs? Is a zero interest


5. Do on-bill financing options address the public sector’s resistance to taking on debt?

6. What is the impact of timing of receipt of rebates and/or financing on project

implementation?

7. Is there a relationship between project cost and the need for financial products and support



8. Which product or service is the most critical to completing energy efficiency projects:


9. Which financial products and/or support services are most valuable to public agencies

serving DACs?

10. Do rebate, financing, and technical assistance program preferences vary by public agency

subsector?

2.4 Study Limitations

2.4.1 Alteration Type

This study focused on public sector preferences for energy efficiency funding, financing, and

technical support programs in the context of retrofit projects only. To ensure consistency across

the data collection instruments, an “energy efficiency project” is defined as any project that

involves replacing or upgrading existing facilities to reduce energy usage and utility bills. From

the perspective of CPUC-authorized energy efficiency program administrators, this definition is

inclusive of programs delivering projects under the existing buildings alteration type.10 The

following definitions and examples were used when developing the survey and interview guides

for soliciting feedback regarding energy efficiency retrofit projects:

10 Resolution E-4818 p. 4


1. Replacement of less efficient equipment with higher efficiency equipment to reduce

equipment energy usage (example: replacing fluorescent lamps with LED lamps)

2. Addition or upgrading of controls systems to reduce system energy usage (example:

adding a variable speed drive to a pump or fan)

3. Tuning or retrocommissioning that results in reduced system energy usage (example:

adjusting thermostat setpoints to minimize unnecessary cooling or heating)

New construction projects generally involve a different project development process, greater scale

of cost, and more complex program intervention strategies than energy efficiency retrofit projects.

These differences may result in contrasting decision-making criteria for potential participants and

should be evaluated in a separate study.

2.4.2 Project Type

Energy efficiency projects can vary widely in cost, complexity, and energy end uses. In this study,

market preferences were not analyzed through the lens of project type (ex: whole building,

process, refrigeration, etc.). IOU claims data on public sector projects collected by the study team

allowed for a limited review of rebate percentage by project type, but a more narrow and in-depth

evaluation would be required to draw conclusions regarding market preferences for rebate,

financing, and technical support programs as a function of project type.

2.4.3 Climate Zone and IOU Service Territory

California is home to 16 different climate zones.11 These climate zones can influence the type and

value of energy efficiency projects developed by public agencies. However, this study did not

evaluate market preferences across climate zone strata due to challenges in collecting the volume

of data necessary to conduct such an analysis. Instead, IOU service territory was utilized as a

proxy parameter when evaluating the geographic coverage and sample representativeness of

survey and interview respondents. This methodology is described in more detail in Section 3.6.

2.4.4 Public Agency Size

Other than agency type and disadvantaged community status, agency-level characteristics were

not used as strata in this evaluation. Factors such as population, annual fiscal budget, and land

area were not considered at any stage of the study. Survey and interview respondents were asked

about typical budgets for energy efficiency projects specifically. While conducting outreach for the

interview portion of the study, an informal effort was made to ensure that not all responses

collected were from very large agencies, but there may still be some sampling bias inherent in

the cohort of respondents. Larger agencies tend to have more staff assigned to develop and

11 CEC Climate Zones. Available at: https://www.energy.ca.gov/programs-and-topics/programs/building-energy-

efficiency-standards/climate-zone-tool-maps-and

https://www.energy.ca.gov/programs-and-topics/programs/building-energy-efficiency-standards/climate-zone-tool-maps-and

https://www.energy.ca.gov/programs-and-topics/programs/building-energy-efficiency-standards/climate-zone-tool-maps-and


implement energy efficiency projects, which means that they are more likely to have staff available

to participate in this market characterization study.

2.4.5 Survey and Interview Outreach

The study team attempted to schedule interviews with agencies that have not had experience

working with ratepayer funded rebate, financing, and technical assistance programs in order to

minimize the effect of selection bias on the respondent population. However, reaching this

subgroup proved challenging due to limited access to contact information for this group. While

some interviewees indicated that their agency has not participated in one or more of the program

categories for this study, all indicated that they were aware of the existence of these programs,

and each indicated that they had participated in at least one program. Additionally, the direct

outreach efforts to disseminate the survey relied on contact lists from third party energy efficiency

program implementers throughout the state, resulting in the high potential for selection bias in the

responses collected. Further evaluation of program preferences among non-participants is

recommended for future public sector market characterization studies.

3. Methodology

3.1 Terms and Definitions

3.1.1 Program Type

For public agencies in California, there are a wide range of programs and products available to

support the development and implementation of energy efficiency projects. In order to evaluate a

statewide market agnostic to the program administrators operating in a given region or IOU

territory, these programs were grouped into 3 general categories.

● Rebate: Program provides cash incentive used to reduce overall project cost. This

category is inclusive of upstream, midstream, and downstream program delivery methods

and deemed, calculated, and NMEC-based savings calculation methodologies. Direct

install programs are also included in this category. However, in the context of this study,

energy efficiency rebates may be offered by other parties operating outside of ratepayer-

funded programs.

● Financing: Program provides a loan to distribute the cost of the project over time. This

category encompasses debt service options, including ratepayer-funded programs such

as on-bill financing (OBF), conventional market-rate loans, and third-party financing

concepts such as energy performance contracting and operating leases. Bonds were not

included in this category due to the more complex and multi-jurisdictional decision-making

process involved in raising capital using this method.

● Technical Assistance: Program reduces overall cost of project by supporting project

development and/or implementation through services, rather than direct financial

assistance. Examples of technical assistance include facility energy benchmarking,


energy audits, financial analysis, procurement support, and project management.

Consistent with the other two program categories, these programs may be offered by non-

ratepayer-funded programs.

3.1.2 Financial Performance Metrics

Respondents to both the survey and interview portions of the study were asked to identify the key

financial performance metrics involved in their agency’s decision-making process when

considering an energy efficiency project. This information provides important context when

making recommendations regarding rebate size and/or loan characteristics, and will be discussed

further in Section 4. The following common financial metrics and definitions were established to

ensure consistent interpretation throughout the study:

● Net Present Value (NPV): NPV takes into account the time value of money and indicates

what a project’s lifetime cash flow is worth today. NPV is determined by taking the sum of

the present value of all current and future cash flows, including purchase and installation

costs, and future utility and maintenance savings.

● Simple Payback Period (SPP): The amount of time required to recover the initial costs

of a project from its savings. A simple payback period ignores the time value of money

and assumes that future savings occur in even amounts each year.

● Return on Investment (ROI): ROI is used to evaluate the efficiency of an investment.

ROI tries to directly measure the amount of return on a particular investment, relative to

the investment’s cost. To calculate ROI, the benefit (or return) of an investment is divided

by the cost of the investment. The result is expressed as a percentage or a ratio.

● Internal Rate of Return (IRR): IRR is the annual rate of growth an investment is expected

to generate. It is a discount rate that makes the net present value (NPV) of all cash flows

equal to zero in a discounted cash flow analysis.

3.1.2 Project Size

Public agencies face unique barriers to capital project implementation due to state and local

regulations regarding funding and procurement. These policies exist to promote fair competition

for government contracts and ensure that the public is adequately informed of expenditures of

taxpayer or ratepayer funds. Procurement regulations typically increase in stringency as the

construction value of a project increases. To account for the impact of this barrier on public agency

program preferences, the study team created project size tiers for use in evaluating utility claims

data and survey responses. In California, the California Uniform Construction Cost Accounting

Commission, under the State Controller's Office, sets the construction cost limits for no-bid,

informal bid, and formal bid requirements for public agencies as required by the California Uniform

Public Construction Cost Accounting Act (CUPCCAA).12 For the purposes of this study, the 2018

CUPCCA limits were used to establish the following project tiers:

● Small: <$45,000

12 California Uniform Construction Cost Accounting Commission, “Cost Accounting Policies and Procedures Manual.”

2019 Edition.


● Medium: $45,000-$175,000

● Large:$175,000-$1,000,000

● Very large: >$1,000,000

The threshold for the very large project tier was assigned based on the on-bill financing limit for

government & institutional customers of Southern California Edison of $1M per service account.13

PG&E14 and SDG&E15 customers may request higher OBF loan amounts. SoCalGas caps on-bill

financing for local government customers at $250,000 per service account.16

3.2 Market Segmentation

This study sought to identify market preferences for energy efficiency rebate, financing, and

technical assistance programs serving public agency customers due to the unique procurement

and funding challenges inherent to that market sector. Other evaluation studies have referred to

the public sector as “Government & Institutional” customers, but no formal definition has been

provided for this sector by CPUC Energy Division staff since the establishment of the public sector

in D.15-10-028, as of the writing of this report.17,18 However, within the public sector, the market

can be further segmented by key factors that influence the decision-making process involved in

developing energy efficiency projects.

3.2.1 Procurement

Large governmental organizations, such as state and federal agencies, often leverage centralized

procurement authorities, such as a General Services Administration (GSA), to manage the

sourcing of goods and services for projects. Developing an energy efficiency project with a large

public agency via a GSA requires the navigation of a decision-making process that is materially

different from the method by which a project is implemented with a public customer that does not

have a centralized procurement model.

Given the inherent complexity involved in evaluating program preferences for large government

and institutional customers, the evaluation team focused on local municipal governments, K-12

public schools, and community services districts. These public agencies provide services within

defined geographic regions and procure projects on behalf of their local constituencies. From a

13 SCE On-Bill Financing Fact Sheet. Available at: https://www.sce.com/sites/default/files/inline-

files/OBF%20Fact%20Sheet%201119_WCAG.pdf 14 PG&E On-Bill Financing Customer and Contractor Handbook. Available at:

https://www.pge.com/pge_global/common/pdfs/save-energy-money/financing/energy-efficiency-financing/handbook_obf.pdf 15 SDG&E On-Bill Financing Handbook. Available at:

https://www.sdge.com/sites/default/files/documents/FINAL_S1970117_OBF%20Handbook.pdf 16 SCG On-Bill Financing. Available at: https://www.socalgas.com/for-your-business/energy-savings/zero-percent-

financing 17 Cadmus Group, “2010-2012 CA IOU On-Bill Financing Process Evaluation and Market Assessment.” Prepared for

CPUC, Energy Division, 2012. 18 CPUC, "D.15-10-028 - Online Documents." 2016. Available at:

http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M155/K511/155511942.pdf



https://www.pge.com/pge_global/common/pdfs/save-energy-money/financing/energy-efficiency-financing/handbook_obf.pdf

https://www.pge.com/pge_global/common/pdfs/save-energy-money/financing/energy-efficiency-financing/handbook_obf.pdf

https://www.sdge.com/sites/default/files/documents/FINAL_S1970117_OBF%20Handbook.pdf

https://www.socalgas.com/for-your-business/energy-savings/zero-percent-financing

https://www.socalgas.com/for-your-business/energy-savings/zero-percent-financing

http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M155/K511/155511942.pdf


procurement perspective, these agencies are distinctly different from state and federal institutions,

and are more likely to share similar challenges and barriers to energy efficiency project

development and implementation.

3.2.2 Services

The local public agency market can be further stratified by the nature of the services they provide.

Municipal governments, such as cities and counties, maintain governance and public safety. K-

12 public schools provide education, and special districts manage essential community services

such as drinking water and sewage collection. The evaluation team proposed that these groups

may have differing needs and preferences regarding energy efficiency programs due to the

different roles they play in providing public services. Throughout the course of the study, the

following market segment definitions were applied when developing data collection instruments,

methodology, and analysis, where possible:

● Municipal Governments: Cities, counties, and other local government agencies funded

primarily by tax dollars

● School Districts: K-12 public school districts and local educational authorities

● Special Districts: Publicly owned water districts, irrigation districts, sanitation districts,

community service districts, and other local government agencies that utilize rate recovery

as a primary funding source

Some municipal governments also provide water or sanitation services, but the structure of such

agencies, and their primary function of governance, suggests that their program preferences

would be more aligned with municipal governments that do not provide water and sanitation

services than special districts that are not responsible for governance.

3.2.3 DAC Methodology

Disadvantaged communities (DAC) are a focal point for the current energy efficiency rolling

portfolio. In addition to the market segments defined above, the study team identified DAC status

as a cross-cutting market segment. Survey and interview responses were analyzed for

preferences and patterns unique to this subset of respondents (see Section 4). This study relied

on the CalEnviroscreen screening tool developed for the California Environmental Protection

Agency (CalEPA) to determine which public sector customers serve DACs. The screening tool

takes a multi-pronged approach to identify DACs and incorporates several indicators based on

geographic, socioeconomic, public health, and environmental hazard criteria. It looks beyond

poverty and income statistics and identifies areas of the state disproportionately impacted by

environmental pollution and negative public health effects.19

19 California EPA, “Designation of Disadvantaged Communities Pursuant to Senate Bill 535.” 2017.


Figure 9. Pollution Burden and Population Characteristics indicators

used by CalEnviroScreen

3.3 Data Sources

A data request was submitted to PG&E, SCE, SoCalGas and SDG&E for a list of energy efficiency

measure claim identifiers that meet certain criteria. Each IOU was requested to provide Program

Administrator claim IDs for commercial custom, commercial deemed, OBF, ARRA financing, third

party financing, and new financing programs for program years 2016-2019 for local government

participants. Due to the lack of consistency between IOUs in the implementation of midstream,

upstream, direct install, and other sector-specific programs making it difficult to conduct a reliable

analysis of their aggregate data, these programs were not included in the data request. The

purpose of collecting data that meets these criteria was to analyze correlations between rebate

size and project cost by project type and public sector market segment, as well as financing

program participation. Data was then analyzed to understand key study objectives regarding

rebate thresholds and customer preferences for ratepayer-funded financing programs. The

evaluation team collected the data for program years 2016-2019 to analyze year over year trends

in the metrics described above and to understand how participant energy efficiency program

preferences may be changing over time.

Each IOU provided a list of measure level claim identifiers in the standard CEDARS upload format

for the evaluation team to then merge with detailed claims data downloaded from the (California

Energy Data and Reporting System) CEDARS platform. The evaluation team was informed that

Pollution Burden Population

Exposures

Ozone

concentrations

PM2.5

concentrations

Diesel

PM emissions

Environmental Effects

Cleanup

sites

Groundw

ater threats

Hazardo

Sensitive Populations

Cardiova

scular disease

Low

birth-weight births

Asthma

Socioeconomic Factors

Educatio

nal attainment

Linguistic

isolation

Poverty

Unemplo


financing programs report savings data at the population level, rather than the level of the

individual project site, and therefore measure or project level information was not available for

these programs.

The data was then processed by joining each claim id provided by all IOUs with the respective

detailed claim data obtained through CEDARS. Along with understanding the program data at the

individual measure claims level, the evaluation team found that the analysis would yield more

valuable results with looking at the data at the energy efficiency project level as well as the market

segment level. Some IOUs were able to provide a site ID for each Claim ID as a proxy for

identifying projects, some IOUs had a site ID embedded within the Claim ID, and some were not

able to provide a site ID at all. As for market segments, some IOUs were able to provide NAICS

codes attached to each Claim ID in order to categorize the data by market segment, although this

too was inconsistent across IOUs.

3.4 Survey Design

The electronic survey (see Appendix 7.1) was designed and implemented for this project to collect

insight into the needs, uses, and decision-making processes of public agencies related to energy

efficiency project financing. By releasing and promoting the survey statewide, the goal was to

capture a breadth of data for quantitative and quick analysis. The surveys preceded one-on-one

interviews for this study, allowing the project team to review early responses and shape interview

questions designed to capture more in-depth responses and conduct qualitative analysis. The

survey split questions into three overarching categories:

● Identifying information for respondent and agency

● Familiarity and history with energy efficiency projects

● Ranking of financial metrics and their importance

The survey questions were designed by The Energy Coalition (TEC) team and shared with

subconsultant TRC for review. The set of survey questions was constructed to be comprehensive

but brief enough to foster good response rates; it was estimated that the survey would take

approximately 15 minutes to complete. The survey included definitions of acronyms and technical

terms, such as NPV (Net Present Value) and ROI (Return on Investment). It was released

statewide on September 1, 2020 and closed on December 17, 2020 with 26 responses recorded

as of the writing of this report. Surveys were distributed directly to public agencies using TEC’s

distribution lists and channels and shared via channel partners (including Councils of

Governments and nonprofit organizations). Surveys were additionally promoted in statewide and

regional newsletters, including a weekly newsletter distributed by the Statewide Energy Efficiency

Collaborative.

3.5 Interviews with Public Agencies

Interviews were conducted as part of this project to gain a more in-depth understanding of public

agency motivations, perceptions, and decision-making related to financing for energy efficiency


projects. A total of 10 interviews were conducted in November and December 2020 with a variety

of agency types, including local governments, school districts, and counties. The protect team

identified interviewees from each IOU territory and from each market segment to gain a more

representative perspective. Outreach to secure interviews involved working through network

contacts and follow-up with survey participants.

An interview guide (see Appendix 7.2), including categorized questions and scripts for the

facilitator, was prepared by TEC and reviewed by TRC. Identical questions were asked of all

agency representatives, although there was flexibility if natural follow-up questions were relevant

and time permitted. During each of the interviews, the facilitator asked agency representatives

identifying questions and attempted to glean their personal experience with energy efficiency

projects and awareness of financing resources. The facilitator collected agency history

implementing energy efficiency projects and leveraging financing programs, offerings, and

resources. Most importantly, the facilitator was able to collect more detail behind agency

motivators, perceptions of risks related to various financing tools and elements, agency limitations

(whether formal or informal), and directly ask which resources were the most important for

implementation of energy efficiency projects. The results from the 10 interviews corroborated and

added depth to the survey results.

4. Analysis of Results

4.1 Literature Review

The first task undertaken by the study team was to evaluate pre-existing studies and reports

regarding public sector energy efficiency project rebate, financing, and technical assistance

program preferences. To complete this task, the study team compiled a list of relevant EM&V

reports from the California Energy Efficiency Contracts database20, as well as other relevant

studies from industry and institutional authorities on the subject, such as the American Council

for an Energy Efficient Economy (ACEEE), the United States Environmental Protection Agency

(EPA), and the United States Department of Energy (DOE). In particular, the study team looked

for insights that address the study questions outlined in Section 2.

4.1.1 2010-2012 CA IOU On-Bill Financing Process Evaluation and Market

Assessment

This study, conducted by The Cadmus Group on behalf of the CPUC Energy Division, evaluated

early OBF programs offered by the four large IOUs.21 The study team surveyed IOU staff, CPUC

staff, “intervenors”, participants, and non-participants. OBF is only available to non-residential

customers, so the study team established 2 groups of respondents: Commercial, Industrial, and

20 CPUC California Energy Efficiency Contracts. Available at: https://pda.energydataweb.com/ 21 Cadmus Group, “2010-2012 CA IOU On-Bill Financing Process Evaluation and Market Assessment.” Prepared for

CPUC, Energy Division, 2012.

https://pda.energydataweb.com/


Agricultural (CIA), and Government and Institutional (G&I). The final report noted the following

relevant findings:

● Focus group participants report two main barriers to implementing energy efficiency

projects: lack of knowledge about appropriate retrofits and the initial cost of making those

retrofits.

● Surveyed customers would accept an interest rate up to 3%, but there was steep drop-off

beyond that threshold.

● Over half of survey respondents indicated financing to be more important than rebates.

● Most customers interviewed have no preference for what entity provides loan capital.

● Utility staff said the ability to treat OBF projects as operating expenses helps G&I

customers move the projects more rapidly through their internal approval processes.

4.1.2 Evaluation of the On-Bill Financing - Alternative Pathway (OBF-AP),

PY2018-2019

This study, conducted by The Cadmus Group on behalf of Pacific Gas & Electric Company

(PG&E), established a net-to-gross measurement methodology for financing-only programs,

determined motivators of program participation, and identified potential barriers to participation

and opportunities to improve program performance.22 Unlike the conventional OBF programs

operated by the IOUs, the PG&E OBF-AP program offers 0% energy project financing without

requiring the customer to participate in another rebate or incentive program. In this study, K-12

schools and local governments were treated as separate organization types. The evaluation

provided the following insights on local government participation and preferences:

● Local government customers comprised 35% of program participation as a percentage of

total energy savings, the largest of all participant categories, though they were not the

largest category on a percentage of participants (14%) or percentage of projects basis

(10%). The average loan size for local government participants was $932,398.

● K-12 school customers comprised 2% of participants on a savings basis, 7% of all

participants, and 10% of projects completed. The average loan size for K-12 schools was

$81,091.

● The study team concluded that “the 0% interest feature helps penetrate the group of

participants who are financing averse but could still benefit from using financing”, but also

found that “municipal finances are tightly managed, and cities may have limited flexibility

for shifting funds to take advantage of the benefits of OBF-AP”.

● The study team also concluded that “Participants may require non-energy benefits as well

as energy savings in order to accept the incremental cost of high efficiency equipment”.

22 Cadmus Group, “Evaluation of the On-Bill Financing - Alternative Pathway, PY 2018-2019.” Prepared for PG&E,

2020.


4.1.3 Energy Efficiency Financing in California Needs and Gaps:

Preliminary Assessment and Recommendations

This study, conducted by Harcourt Brown & Carey, Inc. (HB&C) on behalf of the CPUC Energy

Division, researched customer needs for energy efficiency financing across three market sectors:

single family residential, commercial, and government & institutional.23 The study identified the

financing products available to each market sector (at the time), evaluated the strengths and

weaknesses of those products, and provided recommendations for improving program and

product design to increase energy efficiency project completion. The following insights and

recommendations for government & institutional customers were provided in the final report:

● Study authors estimated that G&I facilities represent 12% of the total square footage for

the entire non-residential California market.

● Regarding public sector barriers to use of financing products, the study found that

“Government and institutional property owners typically are held to tight operating budgets

and are not able to borrow funds unless they successfully complete numerous levels of

approval. Consequently, government and institutional properties often are characterized

by deferred maintenance and inefficient, failing or obsolete equipment.”

● Regarding public sector challenges in justifying the fiscal benefits of energy efficiency, the

study found that “Energy bills are paid from funds allocated during the annual budget

process. During the budget process, it is rare that the departments get ‘push back’ on

attempts to pay its energy bill. Therefore, it is often easier to acquire funds to pay the

energy costs than to seek capital expenditures for major improvements.”

● Study authors also concluded that the combination of risk aversion in project development

and heavily regulated funding and procurement processes creates a disincentive for public

agencies to invest in energy efficiency projects. These projects must compete with other

projects that provide more direct benefits to the agency and/or taxpayers than the “pass-

through” benefits of reduced facility operating costs.

4.1.4 Expanding the Energy Efficiency Pie: Serving More Customers,

Saving More Energy Through High Program Participation

This study, conducted by ACEEE, evaluated energy efficiency program participation across

multiple states and utilities to determine program design best practices and provide

recommendations for encouraging high participation.24 The study focused on residential,

multifamily, small business, and commercial & industrial programs, with additional strata based

on program type, such as custom vs. prescriptive incentive offerings, and project type, such as

retrofit, retrocommissioning, or new construction. Though public sector customers were grouped

with commercial customers, the following perspectives on rebate program design were

23 Harcourt Brown & Carey, “Energy Efficiency Financing in California Needs and Gaps: Preliminary Assessment and

Recommendations.” Prepared for CPUC, Energy Division, 2011. 24 York, Dan, et al. “Expanding the Energy Efficiency Pie: Serving More Customers, Saving More Energy Through

High Program Participation.” American Council for an Energy-Efficient Economy, 2015.


considered by the TEC study team when providing recommendations at the conclusion of this

study:

● Custom incentive programs tend to target a small group of large customers due to cost-

effectiveness requirements.

● Rebate programs are more successful when other market actors are involved in marketing

and outreach efforts. Midstream and upstream programs, for example, are often marketed

by both the manufacturer or distributor and the utility or organization offering the program.

● Study authors recommended “streamlined programs” as a characteristic of programs with

high participation: “Programs that offer a single point of contact for a customer to access

the full, comprehensive suite of incentives and services are especially important to achieve

high participation in markets that are hard to reach.” This role may be filled by technical

assistance programs in some markets.

4.1.5 Municipal Energy Efficiency and Greenhouse Gas Emissions

Reduction: Financing and Implementing Energy Efficiency Retrofits in City-

Owned Facilities

This study, conducted by the Environmental Financial Advisory Board for the US EPA, evaluated

the costs and barriers associated with implementing energy efficiency retrofit projects in buildings

owned by local government entities.25 The report noted the following challenges:

● Upfront capital cost is a key barrier, even when low interest financing programs are

available.

● Payback period is a key financial metric for local government energy efficiency investment.

As the study authors note, “Decision-makers often choose to cherry-pick measures that

will pay for themselves quickly — the low-hanging fruit. There is a common tension

between the limited number of projects with quick paybacks and the larger number of

projects with both large capital and extended payback periods.”

● Credit rating concerns and debt capacity limits can preclude the use of loans or bond

funding for energy efficiency projects, especially for agencies with limited tax base. “While

a tight budget should provide an incentive to increase buildings’ efficiency, the poor

financial condition of many governments puts constraints on their ability to finance the

improvements. While not all jurisdictions are in dire straits, in those where the debt

capacity is at or close to a state or self-imposed limit, where the credit rating is weak or

the size of the project is small, bonding for energy efficiency projects may not be feasible,

in spite of the project’s ability to cover the debt service through efficiency savings.”

25 EFAB, “Municipal Energy Efficiency and Greenhouse Gas Emissions Reduction: Financing and Implementing

Energy Efficiency Retrofits in City-Owned Facilities.” Prepared for US EPA, 2014.


4.2 Overview of Market

Of the roughly 3,500 public agencies in California, over half of them are special districts, which

include publicly owned water districts, irrigation districts, sanitation districts, community service

districts, and other local government agencies that utilize rate recovery as a primary funding

source. The fact that the majority of public agencies are considered special districts suggests the

need to further categorize this market segment to better understand different needs within it. The

project team compiled a GIS map detailing the various market segments and subcategories in

this section, which is available here.

Table 4. Breakdown of Market Segment in California

Market Segment Count % of Total

Municipal Governments 665 19%

School Districts K-12 820 24%

Special Districts 1,972 57%

Total 3,457 100%

Below is a breakdown of the share of disadvantaged communities within each public sector

market segment.

Table 5. Percentage of Disadvantaged Communities within Municipal Governments

Municipal Governments

Disadvantaged Community Count % of Total

No 421 63%

Yes 244 37%

Total 665 100%

Table 6. Percentage of Disadvantaged Communities within School Districts

School Districts K-12

Disadvantaged Community Count % of Total

No 430 52%

https://arcg.is/4aOPi0


Yes 390 48%

Total 820 100%

Table 7. Percentage of Disadvantaged Communities within Special Districts

Special Districts

Disadvantaged Community Number of Districts % of Total

No 1,486 75%

Yes 486 25%

Total 1,972 100%

4.3 Participation Trends

In this section, we review public agency energy efficiency program participation trends based on

analysis of data pulled from the IOU program databases as specified in section 3.3. Data Sources.

Overall, public sector participation in commercial deemed and calculated programs has been

trending down over the past 3 years, mainly in PG&E and SCE territories, which together account

for 64% of all projects across the study period.

Of the public sector agencies that participated in deemed and calculated programs, the total

average rebate amount received as a percentage of total project cost is 33%. The average rebate

received relative to project cost by IOU is as follows: PG&E: 30%, SCE: 34%, SCG: 48%, SDG&E:

27%. A significant number of projects are recorded to have received rebate amounts that exceed

the project cost or received rebate amounts when there was no project cost at all. Further insight

into these instances was not available, and IOU program databases did not contain any indicators

to characterize instances in which a rebate as a percentage of project was either less than 0% or

above 100%. Therefore, these data points were removed from analyses of rebates as a

percentage of project cost.


Figure 10. Annual Number of Projects per IOU

Looking at the quantity of projects across all IOUs in each project cost category as specified in

Section 3.1.2. Project Size, 80% of all projects are small, costing less than $45,000. Although

very few in quantity, successively larger project size categories make up a fairly similar share of

total aggregate project spend as the smaller ones. A sizable portion of projects showed no

recorded cost or even a net negative cost for completing an energy efficiency project. Additional

information on this subset of projects was not obtainable.

Table 8. Quantity of Project Size and Percentage of Project Cost

Project Size # of Projects % of Total Projects % of Total Project Spend

$0 or less 1,244 15% 0%

$0 - $45K 6,500 80% 28%

$45K - $175K 275 3% 22%

$175K - $1 Million 75 1% 25%

Over $1 Million 4 0% 24%

Deemed incentives appear to be considerably more popular, making up 82% of all projects with

either calculated or deemed incentives and the overwhelming majority of projects for PG&E,

SoCalGas, and SDG&E. SCE is the only IOU with a higher proportion of projects pursuing

calculated incentives (55%).


Figure 11. Number of Projects by Program Type per IOU

When looking at the rebate amounts received for all projects with calculated or deemed

incentives, the majority are under $5,000 and account for either less than 30% or between 60-

70% of the total project cost (excluding rebate % of project cost below 0% or above 100%).

Figure 12. Distribution of Full Rebate Amount


Figure 13. Distribution of Rebate as a Percentage of Project Cost

Due to special district designation being unavailable for this dataset, one category is made up of

both the municipal government and special district market segments, and the other category is

made of the public schools K-12 market segment.

Overall, K-12 public schools participate in 65% more projects with calculated or deemed

incentives than municipalities and special districts, accounting for 62% of all projects. This is

primarily due to projects within SCE and SDG&E territories, with 76% of projects within each

territory taking place at K-12 public schools. Projects within PG&E and SCG territories are fairly

evenly split between schools and municipalities & special districts.


Figure 14. Number of Projects by Market Segment per IOU

Across both public school and municipality & special district categories, 18% of projects utilized

calculated incentives while 82% of projects were deemed.

Figure 15. Number of Projects by Program Type per Market Segment

4.4 Market Actor Feedback

This section of the analysis considers the data collected from survey respondents and interview

participants. The survey was distributed through a combination of direct outreach via email and


industry newsletters. 26 survey responses were recorded, resulting in an estimated response rate

of 1% (n ≅ 2,588). The majority of responses came from municipal government staff (73%), of

which 58% serve disadvantaged communities. Overall, half of the responses received were from

DAC agencies, though no DAC responses from school districts were received. Due to the limited

response rate among K-12 schools and special districts, analysis of trends and patterns at the

market segment level was not possible. The DAC cross-cutting market segment is well

represented in the responses collected and comparisons between DAC and non-DAC

respondents are provided in subsequent sections.

Table 9. Breakdown of Survey Respondents

Market

Segment

# of

Responses % # of DAC % DAC

Municipal

Government 19 73% 11 58%

Special

District 4 15% 2 50%

School District 3 12% 0 0%

Total 26 13 50%

Interviews were conducted with 10 public agency contacts. For this task, the study team

developed a target list of potential interviewees based on market segment and IOU service

territory to ensure that a statewide and marketwide perspective would be captured. The table

below shows the breakdown of market segment, DAC status, and IOU service territory among

the interview participant group.

Table 10. Breakdown of Interview Respondents

IOU Service Territory

Market

Segment

# of

Responses % # of DAC % DAC PG&E

SCE/

SoCalGas SDG&E

Municipal

Government 5 50% 1 20% 2 1 2

Special

District 2 20% 1 50% 1 0 1

School

District 3 30% 1 33% 1 1 1

Total 10 3 30% 4 2 4

4.4.1 Financial Performance Metrics

In order to establish the decision-making context for public agencies regarding energy efficiency

projects, the survey and interview guides asked respondents to identify typical project-level


budgets and financial key performance indicators for energy efficiency projects. Among all

respondents, the medium project budget range was selected most often, with small and large

projects close behind. There was no apparent difference in responses between DAC and non-

DAC agencies, nor between market segments in general, though it can be noted that none of the

3 school district respondents selected the very large project budget category.

Figure 16. Survey Respondent’s Typical Energy Efficiency Project Cost

Interview responses affirm the finding that energy efficiency project budgets can range widely.

Seven (7) interview respondents noted that project budgets depend entirely on the purpose and

value of the project. Four (4) respondents provided estimated budget ranges from tens of

thousands of dollars up to $1M, indicating a possible ceiling for acceptable project costs.

Survey responses regarding financial KPI preferences were similarly homogenous across DAC

and market segment strata. Simple payback period and return on investment received more “very

important” and “extremely important” selections across all project size categories than net present

value or internal rate of return. The preference of those metrics becomes more pronounced as

project cost increases; SPP was selected by 9 respondents for small projects, 10 for medium

projects, 13 for large projects, and 14 for very large projects. ROI was selected by 8 respondents

for small projects, 9 for medium projects, 14 for large projects, and 15 for very large projects.


Figure 17. Survey Respondent’s Financial Metrics Rating for Projects less than $45,000

Figure 18. Survey Respondent’s Financial Metrics Rating for Projects

between $45,000 and $175,000


Figure 19. Survey Respondent’s Financial Metrics Rating for Projects

between $175,000 and $1M

Figure 20. Survey Respondent’s Financial Metrics Rating for Projects greater than $1M

When asked about financial KPIs, a simple payback period was referenced by 60% (6) of the

interview respondents, the most of any financial metric. However, almost all interview respondents

(9) referenced more than one key criteria, and many listed non-energy or non-financial benefits

as important drivers for energy efficiency project decision-making criteria. Policy goals, such as

avoided greenhouse gas emissions or zero net energy (ZNE) targets, were mentioned by 60% of

respondents, and maintenance needs were mentioned by 30%. Survey respondents could also

enter custom responses for project financial KPIs and 19 were submitted. Among those, 37%

mentioned policy directives, including 26% referencing avoided GHG emissions. Maintenance

was referenced in 21% of the custom responses, and health & safety was referenced in 11%.


On the whole, both the interview and survey responses demonstrate that while simple payback

period may be the most visible and commonly used financial performance metric, public agencies

make decisions about energy efficiency investments using a more diverse set of criteria that may

include non-financial factors, especially for agencies with energy-related policy objectives.

4.4.2 Rebate Preferences

Survey and interview respondents were asked a series of questions regarding rebate preferences

that focused on rebate program awareness, program value, rebate size as a percentage of project

cost, and timing of receipt of funds. Timing preferences will be reviewed in Section 4.4.4 alongside

similar data collected for financing programs. 73% of survey respondents and 90% of interview

respondents indicated that their agency has used energy efficiency rebate programs in the past.

To obtain perspective on the general value of rebate programs, respondents were asked to select

from the following rating scale for each project size category:

Table 11. Survey Responses Rating Scale

1 - Not A Factor

2 - Slightly Important

3 - Important 4 - Very Important

5 - Essential Unsure

Responses indicate that there is a strong positive correlation between the importance of rebates

and project cost (see Figure 21). The average importance of rebates increased by 42% between

small and very large project sizes. One surprising finding was that DAC agencies consistently

rated rebates as less important than non-DAC agencies for all project size categories (see Figure

22).

Figure 21. Survey Respondent’s Rebate Importance Rating by Project Size


Figure 22. DAC Agencies' Rebate Importance Rating by Project Size

Interview respondents were asked to rank their satisfaction with rebate programs on a similar

scale of 1 to 5, with a score of “1” representing very unsatisfied and a score of “5” representing

very satisfied. The average score was 3.22, with several respondents noting that their primary

experience with rebate programs came from LED retrofit rebates that are no longer offered by

their utility.

One of the key goals of this study is to determine the threshold of effectiveness for rebates as a

percentage of the gross project cost. Both survey and interview respondents were asked to

provide insight on the minimum rebate percentage necessary to encourage their agency to

complete an energy efficiency project. The survey question addressing the minimum rebate

threshold was structured to allow respondents to provide answers by project size category. Figure

23 shows the responses and indicates that the rebate threshold increases as project size

increases. This holds true for both DAC and non-DAC respondents, but DAC agencies

consistently responded with lower minimum rebate percentages (see Figure 24).


Figure 23. Survey Respondent’s Rebate Threshold Preference by Project Size

Figure 24. Survey Respondent’s Rebate Threshold Preference as Percentage

of Gross Project Cost

4.4.3 Financing Preferences

Survey and interview respondents were asked a series of questions regarding financing program

awareness, importance, maximum acceptable loan interest rate, preferred repayment method,


and timing of receipt of funds. Timing preferences will be reviewed in Section 4.4.4. In contrast to

rebate and technical assistance programs, only 50% of survey respondents indicated that their

agency has previously utilized financing for energy efficiency projects, the lowest of the three

program types. Experience with financing for energy efficiency projects was much higher among

interview respondents, with 80% responding in the affirmative.

Survey respondents were asked to assess the importance of financing programs on the same 5-

point scale provided in Section 4.4.2 (see Table 11). Responses indicate that there is a strong

positive correlation between the importance of financing and project cost, even greater than that

of rebates (see Figure 21). The average importance of financing increased by 74% between small

and very large project sizes. However, for small and medium project size categories, the average

response was less than the median selection value of 3, indicating that financing programs are

either not very important or not useful at all for projects in those size ranges. This is further

substantiated by interview responses. When asked if financing programs are better suited to small

or large projects, 7 of 10 respondents indicated that larger projects are a better fit, with 2

respondents indicating that project size is not a factor.

Survey response averages indicate that among the survey population, financing programs were

rated as less important than either rebate or technical assistance programs, but are still very

important on average for larger projects..

Interview respondents were asked to rank their satisfaction with financing programs on the same

5-point scale described in Section 4.4.2. The average score was 3.8. On-bill financing was the

most commonly referenced form of energy efficiency project financing (5 respondents), with the

California Energy Commission’s Energy Conservation Assistance Act (CEC ECAA) loan program

and California iBank loan programs referenced by 2 respondents each. Conventional loans from

private capital were referenced by 2 respondents and energy services company (ESCO) financing

was referenced once.

“Unsure” was selected more often for financing program importance (12) than for either other

program category. This may be due to the wide range of financing products and mechanisms

captured within this program category, or the large number of possible permutations of debt

service products when considering variations in loan term, interest rate, payment schedule, and

source of funding. Future studies on this subject area and market should consider a more in-depth

evaluation of preferences between specific financing products, as the heterogeneity of this

program category creates challenges in ensuring that perceptions between respondents are

based in the same frame of reference when asked about the program category as a whole.


Figure 25. Survey Respondent’s Financing Importance Rating by Project Size

Among DAC survey respondents, a similar trend was observed but with less overall importance

and even greater disparity across project size ranges (see Figure 26). DAC agencies place

significantly less value on financing for small and medium projects and only marginally less

value for large and very large projects than the survey group as a whole.

Figure 26. DAC Agencies’ Financing Importance Rating by Project Size

One of the key questions investigated in this study is the interest rate threshold for financing

programs. As noted in Section 3.2, previous OBF impact studies have identified 3% as the

maximum incentive rate acceptable to non-residential customers for energy efficiency project

financing.26 However, survey responses indicate that the threshold may be much lower for

public sector customers. Across all respondents, the average interest rate selected ranged from

26 Cadmus Group, “2010-2012 CA IOU On-Bill Financing Process Evaluation and Market Assessment.” Prepared for

CPUC, Energy Division, 2012.


1.91% to 1.5%, decreasing with project size. DAC respondents reported a lower threshold of

1.5%, which held consistent across project size categories.

Figure 27. Survey Respondent’s Interest Rate Threshold by Project Size

“Unsure” responses were again recorded at a high rate. 4 respondents marked “Unsure” for all 4

categories, and 3 of those respondents were from DAC agencies. 3% (26) and 0% (25) received

the most responses across all project size categories, with the bulk of the remaining responses

falling in between those values (see Figure 28). Only 6 responses greater than 3% were recorded,

and no responses above 5% were recorded. It should be noted that interest rate preferences are

likely relative to the economic climate at the time of sampling and may not be static in nature.

Future studies on this topic may want to consider sensitivity to capital market conditions or

longitudinal survey methodologies in order to adjust for this effect.


Figure 28. Survey Respondent’s Maximum Interest Rate Preference

Interview respondents were asked to provide insight on debt service limits or financing caps. No

respondent identified a cap for financing amount on a project-level basis, and some indicated that

there are multiple criteria involved, such as the amount of existing debt on the agency’s balance

sheet and the cashflow positivity of a project.

Survey respondents were also asked to provide insight on loan repayment preferences. The

survey question addressing this topic offered 5 response options: monthly installments, quarterly

installments, semi-annual installments, utility bill charges, and unsure. Respondents

overwhelming selected utility bill charges and unsure across all project sizes. The preference for

utility bill charges increases slightly with project cost. The high number of unsure responses may

again be an indication that this question was unclear, or that the preference for debt service

payment schedules may vary too widely between different financing products for the respondents

to select a single option per project size category.


Figure 29. Survey Respondent’s Preferred Debt Service Payment Method

4.4.4 Timing Preferences

Both survey and interview respondents were asked questions regarding the timing of rebate and

financing programs. Rebate and financing programs may provide funds to participants at various

stages of the project lifecycle. For example, downstream rebate programs typically issue funds

after the project is installed, while most midstream rebates provide a discount at the point of

purchase, prior to installation. Some programs pay out incentives based on savings performance

over time. Similarly, loan programs may provide funding before the customer incurs project costs

or, in the case of OBF, lump sum after verifying project completion, requiring the customer to carry

the full cost of the project until funds are disbursed. Some loan programs allow for invoice-by-

invoice reimbursement of progress payments made by the customer to the contractor during the

construction phase. Survey respondents were asked to use the same 5-point importance scale

(see Section 4.4.2) to assess the importance of timing on receipt of rebate and financing funds.

For rebates, timing becomes a more important factor as project size increases. For small and

medium projects, it is generally not an important factor, but it becomes very important or essential

for large and very large projects. Responses between DAC and non-DAC agencies were

generally consistent, but 3 DAC participants indicated that rebate timing is not a factor for any

project size category, depressing the average values for the DAC-only responses.


Figure 30. Survey Respondent’s Rebate Timing Importance Rating by Project Size

Figure 31. DAC Agencies’ Rebate Timing Importance Rating by Project Size

A question regarding rebate delivery timing was also included in the interview guide. Four (4)

respondents indicated that direct payments to contractors or vendors would be preferable, with

three (3) respondents directly mentioning midstream and/or upstream programs. Two (2) other

respondents indicated a preference for deemed rebates. Two (2) respondents expressed concern

regarding performance payment models due to the tracking and reporting required. In general,

most respondents expressed a preference for rebate programs that minimize administrative

burden in the application, tracking, and reporting process.

For financing programs, similar trends were observed. Timing of receipt of funds is not an

important factor for small and medium projects, but becomes much more important for large and

very large projects. “Unsure” responses were again high relative to the rebate and technical

assistance forms of this question. Trends between DAC and non-DAC agencies are consistent.

5 respondents to this question selected “1 - Not A Factor” for all project size categories. Three (3)


of those respondents are from DAC agencies. This may indicate a potential counter-trend, but the

sample size is too small to be certain. For some agencies, timing of receipt of financing funds is

very important or essential for larger projects, but for another group, it is of no significance at all.

Responses to this question were evaluated for market segment correlation, but none was

detected. More investigation of this preference category is warranted.

Figure 32. Survey Respondent’s Financing Timing Importance Rating by Project Size

Figure 33. DAC Agencies’ Financing Timing Importance Rating by Project Size

Survey respondents also received a question asking them to choose between invoice-by-invoice

reimbursement and lump sum receipt of financing funds. For small and medium projects, lump

sum dispersal is preferred. For large and very large projects, invoice-by-invoice reimbursement

is requested. This response is expected; larger project capital outlay represents higher risk and

higher carrying cost, particularly for large projects with longer construction timelines. The same

trend is also identified among DAC-only agencies, with 54% selecting reimbursement for large

and very large projects compared to only 15% selecting lump sum dispersal.


Figure 34. Survey Respondent’s Preferred Method to Receive Financing Funds

4.4.5 Technical Assistance Preferences

Survey and interview respondents were asked a series of questions regarding technical

assistance program awareness, importance, and preferred services. 85% of survey respondents

and 100% of interview respondents indicated that their agency has used energy efficiency

technical assistance programs in the past, which constituted the highest awareness response for

any of the program categories. Survey respondents were asked to assess the importance of

technical assistance programs on the same 5-point scale provided in Section 4.4.2 (see Table

11). The responses show a similar trend to the rebate and financing importance scores, but with

some notable differences. For large and very large project sizes, there were zero responses below

“3 - Important”, resulting in an average importance score for both categories that was higher than

the corresponding scores for either rebate or financing programs. The total number of “5 -

Essential” scores for technical assistance programs was 41, which was higher than total recorded

for rebate programs (38) and substantially higher than that of financing programs (31). This is

further supported by the interview responses, which yield an average satisfaction score of 4.05

regarding technical assistance programs.


Figure 35. Survey Respondent’s Technical Assistance Importance Rating by Project Size

DAC agency responses followed a similar trend but with slightly lower scores for small and

medium projects and slightly higher scores for large and very large projects.

Figure 36. DAC Agencies’ Technical Assistance Importance Rating by Project Size

Survey respondents were also asked to provide insight on the most important services provided

by technical assistance programs. The study team recognizes that there is a wide range of

potential services that may be provided by these programs, and many programs customize

services to a specific market segment, so the most common program services were grouped into

5 categories and provided as response options. Respondents were asked the following question:

If an energy efficiency technical assistance program became available to reduce the barriers to

developing and implementing an energy efficiency project, which services must be offered in order

for your agency to participate? Select all that apply:

● Energy Benchmarking


● Energy Audit

● Financial Analysis

● Procurement Support

● Project Management

The responses to this question provide insight on the types of services required, as well as the

overall amount of support needed from technical assistance programs. Energy audits and

financial analysis were selected by 60% of respondents for all project size categories, indicating

that these services are important for projects of any scale. Energy benchmarking services also

held a mostly consistent score across project sizes, but were selected by less than 45% of

respondents, suggesting that these services are also valuable for some agencies but they are not

as essential as energy audits and financial analysis. Procurement support becomes increasingly

important as project size increases; procurement support jumps from 31% selection for small

projects and 46% for medium projects to 65% for large and very large projects. This result is likely

due to the escalating regulation of public agency procurement practices as project construction

value increases. Project management services also received increasing selections with higher

project cost, but with fewer overall selections than other services in small and medium project

size categories.

Figure 37. Survey Respondent’s Technical Assistance Service Preference by Project Size

DAC agency responses followed the same trend as the overall group of respondents. However,

DAC agencies selected a higher number of services than non-DAC agencies for all project size

categories other than small. For medium and large projects, the difference is approximately

10%, but the gap increases to 26% for very large projects. Both DACs and non-DACs reported

a need for more services as project size increases.

Table 12. Breakdown of Technical Assistance Service Preference by Project Size and

Respondent’s DAC Status

Small

(<$45k)

Medium

($45k-175k)

Large

($175k-$1M)

Very Large

(>$1M)


DAC 24 34 41 43

Non-DAC 30 31 37 34

Total 54 65 78 77

In general, interview responses regarding technical assistance program services indicated the

need for a continuation of common services such as energy benchmarking, energy audits, and

financial analysis. Respondents also identified a need for the expansion of technical assistance

program services to include support for projects that involve distributed energy resources (DERs),

such as battery energy storage or electric vehicle charging infrastructure. A lack of internal staff

resources and technical expertise were routinely identified by respondents as barriers to

developing and completing energy efficiency projects, particularly in regards to supporting rebate

and financing program participation. For example, some agencies may not have engineering staff

that can conduct energy audits or develop technical specifications for energy efficiency projects

and would require an outside consultant or contractor to fill this gap. Technical assistance

programs that provide such services remove the financial risk of project identification and

development without obligating the customer to a contract, and can mitigate cost or risk at other

stages of the project lifecycle as well. Other barriers to program participation are discussed in the

following section.

4.4.6 Drivers and Barriers to Program Participation

Survey and interview respondents were also asked to provide insights into non-financial drivers

and barriers for program participation across all three program categories. When survey

respondents indicated that they had not participated in an energy efficiency program category,

they were asked to select a reason for their lack of participation from a pre-filled list or to write-in

a custom response (see Appendix 7.2). Table 13 shows the responses received.

Table 13. Survey Respondent’s Reasons for Lack of Energy Efficiency Program

Participation

# Reason Provided Responses

1 Unaware of the existence of the

program 4

2 Not enough internal resources to

participate 4

3 Too time-consuming to participate 2

4 Cost of program/up front capital 1

5 Cost 1

6 Limited or no eligibility to participate 2

Reason #6 may be outside of the control of program administrators and implementers to address.

Not all programs can or should be designed to serve the public sector specifically. Reason #1

may indicate the need for improved marketing and outreach efforts to ensure that all public


agencies are aware of the energy efficiency programs available to them. Reasons #2 - #5, when

considered together, indicate that one of the primary barriers to program participation is limited

internal resources. Public agency customers may not have sufficient staff to support their

participation in rebate, financing, or technical assistance programs. Interview responses further

substantiate this interpretation; 5 of 10 interview respondents stated that limited staff resources

were the biggest non-financial barrier to energy efficiency program participation.

Program type-specific barriers were also identified by survey and interview respondents. Rebate

programs often involve a series of application steps to ensure that rebates are calculated properly

and that installed projects successfully deliver energy savings. Survey respondents were offered

an opportunity to submit open feedback; 2 noted that incentive application paperwork and

processing is a significant drain on customer resources. One response suggested that “the

additional work involved in participating in incentive programs represents an additional cost to the

project budget. The incentive must compensate for that as well as provide a reduction in total

project cost.” Interview respondents provided open feedback on rebate program participation as

well, with 5 of 10 respondents identifying administrative burden as a drawback. Two (2)

respondents also noted the challenge of accommodating uncertain or inconsistent incentive

process timelines into the structured fiscal calendar and operating rhythm of the public sector.

This can be particularly difficult for school districts, which are often only able to complete capital

projects during the summer recess period.

Financing program barriers were also identified by study participants. Two (2) interview

respondents from large public agencies stated that OBF creates accounting and tracking

challenges when an agency has dozens or even hundreds of utility accounts to manage.

Reporting requirements for some energy efficiency financing programs was also identified as an

obstacle by multiple agencies. One (1) survey respondent and one (1) interview respondent

suggested that allowing financing payments to go directly to the contractor or service provider,

instead of having to flow through the agency, would make financing programs more valuable for

energy efficiency projects.

An overall observation from interview responses is that agencies with energy-related policy

objectives may evaluate projects differently; GHG emissions reductions, resiliency, and zero net

energy targets can drive project investment even when traditional financial performance metrics

are not met. This participant perspective on the decision-making process for energy efficiency

projects contrasts with the total resource cost test used to evaluate program cost-effectiveness

performance and may lead to gaps in the market if programs are unable to incorporate such non-

energy benefits into program cost-benefit analysis.27

4.4.7 Program Ranking

The first stated goal of this study is to identify a ranked order of preference for rebate, financing,

and technical assistance programs for local public sector customers. The survey guide did not

27 "DECISION ADOPTING COST-EFFECTIVENESS ANALYSIS FRAMEWORK

POLICIES FOR ALL DISTRIBUTED ENERGY RESOURCES." 21 May. 2019, http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M293/K833/293833387.PDF. Accessed 5 Jan. 2021.

http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M293/K833/293833387.PDF


include any questions that required respondents to compare the programs directly; instead, the

average importance scores can be used to compare program preferences. Figure 38 compares

the average importance scores for the three program types across project size categories.

Rebates were rated as the most important program type for small and medium projects, with

scores at or above the median response option of 3 - Important for all project size categories. For

large and very large projects, technical assistance programs were rated as the most important

program type, followed closely by rebates. Both program types received average importance

scores between 4 - Very Important and 5 - Essential in those size categories. Across all project

sizes, financing programs receive the lowest average importance score, with an average score

beneath the median response value of 3 - Important for small and medium project sizes. The gap

narrows for large and very large projects. Aggregating scores within each project size range

demonstrates a substantial increase in overall program value as project size increases.

Aggregated program importance for large projects is 47% higher than that of small projects.

Figure 38. Survey Respondent’s Program Rating by Project Size

An analysis of DAC-only survey responses shows a similar overall trend of increasing program

importance as project size increases, but with decreased average importance scores for each

project size category compared to the total survey population. For small projects, all programs

received scores well below the median response option of 3 - Important. Some differences in

program-specific trends can be observed as well. For small and medium projects, average

importance scores are lower for all program types, but for large and very large projects, only

rebate and financing scores were lower; technical assistance scores increase, deviating from the

overall trend. Technical assistance programs were rated as more important for medium projects

than rebate programs, contrasting with the rest of the survey pool for this project size category.


Figure 39. DAC Agencies’ Average Program Rating by Project Size

In contrast to the survey, the interview guide did include a question that explicitly asked for a

ranked order of importance for the three program types without consideration of project size.

Table 11 shows the rankings and average importance scores for each program. The results

contrast with the survey responses in some aspects, and confirm the trends observed in others.

Unlike the survey responses, rebate programs were consistently ranked lower than the other

program types; only 1 respondent rated rebate programs as the most important of the three

options. Financing programs were rated higher than rebate programs, with 4 respondents rating

them as the most important program type. Technical assistance programs were ranked as the

most important program type, receiving top ranking from 5 respondents and last place ranking

from only 1 respondent. This finding is consistent with the survey data results for large and very

large project categories, and the average or above average importance scores for technical

assistance programs across all project size categories.

Table 14. Interview Respondent's Program Ranking

Program Ranking

Rebate Financing

Technical

Assistance

Respondent 1 3 2 1

Respondent 2 3 1 2

Respondent 3 2 3 1

Respondent 4 3 2 1

Respondent 5 3 1 2

Respondent 6 2 3 1

Respondent 7 2 3 1

Respondent 8 3 1 2

Respondent 9 3 1 2

Respondent 10 1 2 3


Average 2.5 1.9 1.6

As noted in previous sections, interview respondents provided satisfaction scores for each

program type on a 5-point scale. Figure 40 indicates that technical assistance programs have

the highest participant satisfaction among the interview respondents, with financing programs in

second and rebate programs in third. Satisfaction and importance are different perspectives, but

satisfaction scores may provide insight on the likelihood of repeat participation.

Figure 40. Interview Respondent’s Program Satisfaction Score

5. Conclusions and Recommendations

The study team’s findings are presented as answers to the study questions defined in Section

2.3.

● For public sector customers, what is the typical gross cost for an energy efficiency project?

○ Conclusion: Neither the survey data nor the interview responses indicate a

consistent project budget. $1 million was mentioned frequently as an informal cost

ceiling, but a consistent cap in project budgets was not observed. Analysis of IOU

claims data indicates that 80% of public sector deemed and calculated projects

report a gross project cost of less than $45,000. However, cumulative gross project

cost was roughly consistent between project size categories, indicating that energy

efficiency project investment is evenly distributed across project size categories on

a cost basis.


○ Recommendation: Survey responses indicate a much greater need for all forms

of program support at higher project cost ranges, yet participation rates drop off

substantially as project costs increase. If program administrators and

implementers intend to target deeper and correspondingly more costly energy

efficiency interventions in the public sector, programs must address this gap.

Programs should be designed to be equally accessible and functional across

project cost ranges. If program eligibility requirements become more restrictive as

project cost scales due to efforts by PAs and/or the CPUC to mitigate risk in

spending ratepayer funds, this gap will likely persist.

● What are the key financial performance metrics for energy efficiency projects for public

agencies?

○ Conclusion: Simple payback period and return on investment are the most

important financial KPIs. Both metrics become more important as project cost

increases. However, interview respondents consistently stated that projects are

driven by more than a single financial metric. Agencies with energy-related policy

goals may pursue projects for reasons other than direct financial benefit, such as

greenhouse gas emissions reductions or net-zero energy targets.

○ Recommendation: Public sector programs should consider and value non-

financial project drivers when evaluating program influence. Customers should not

be discouraged from participating in ratepayer-funded energy efficiency rebate,

financing, or technical assistance programs when developing projects driven

equally by policy mandates intended to help meet the state’s statutory climate

objectives, such as GHG emissions reduction targets or net-zero energy goals,

and the direct financial benefits generated by those projects. Program influence

requirements and net-to-gross ratios should not penalize projects driven in-part by

climate or environmental policy goals. Requiring projects to meet a single financial

performance metric, such as simple payback period, does not fully capture the

customer rationale for energy efficiency project investment and may limit or

prevent program participation by public agencies.

● What minimum rebate, as a percent of project cost, will entice a customer to complete an


○ Conclusion: Survey responses indicated that rebates should cover at least 28%

of the project cost for small projects (<$45,000 gross project cost) in order to

induce public sector customers to complete an energy efficiency project. This

threshold increases with project size. Medium projects ($45,000-$175,000) require

a 35% rebate, large projects ($175,000 - $1 million) require a 44% rebate, and very

large projects (>$1 million) require 49%. Agencies serving disadvantaged

communities have lower thresholds: 20% for small, 27% for medium, 35% for

large, and 41% for very large projects.

○ Recommendation: When designing a rebate program, program administrators

should look beyond incremental measure cost in determining rebate size. The

decision-making process for public agency customers considers a rebate’s impact

on gross measure cost, rather than the cost difference between standard practice

and high efficiency options. Rebates that scale more closely with project cost by


focusing on gross avoided energy usage, rather than incremental avoided energy

usage, would also be more effective in inducing energy efficiency project

investment. IOU claims data shows that the median rebate covers 5% or less of

gross project cost, indicating a clear gap between current rebate offerings and the

threshold for participation. This gap between the size of the rebate needed to

induce participation, and the actual size of most rebates claimed, indicates that

freeridership among public sector customers may be very high for smaller rebates.

Continuing to offer small rebates may result in persistently high rates of

freeridership among public sector customers and a continued downward trend in

both program participation and total resource savings captured.

● What is the maximum interest rate acceptable for financing programs? Is a zero interest


○ Conclusion: Based on survey responses, the 3% threshold identified in previous

on-bill financing impact studies is accurate for public agencies. However,

respondents selected 0% and 3% in nearly equal proportions, which suggests that

there may be two different preference sets within the market. Non-DAC agencies

are willing to accept higher interest rates (2-3%) for small and medium projects,

but lower rates (<1.5%) are required for large and very large projects. DAC

agencies need lower interest rates at any project size, typically below 1.5%.

○ Recommendation: Given the lower importance scores for financing for small and

medium projects, program administrators should continue to offer low- or no-

interest financing products for projects >$175,000. Products targeted for agencies

serving DACs should hold interest rates under 1.5%. Program administrators

developing financing programs may have some latitude in developing financing

programs with non-zero interest rates, which would allow for improved program

cost-effectiveness and faster loan pool replenishment.

● Do on-bill financing options address the public sector’s resistance to taking on debt?

○ Conclusion: Based on interview responses, on-bill financing is a valuable product

that is most helpful for completing large projects. However, tracking on-bill

financing charges and loan terms can be challenging for agencies with a large

number of service accounts. The off-balance sheet aspect of OBF may be a factor

for some agencies, but a consistent pattern was not detected among interview

responses. All factors of a loan, including interest rate, term, payment schedule,

method of disbursement, and method of repayment are involved in an agency’s

decision to use a financing product.

○ Recommendation: Financing becomes more important for Large and Very Large

projects, so maintaining higher loan limits for OBF products is essential for

ensuring that OBF programs meet the needs of the public sector and induce

participation.

● What is the impact of timing of receipt of rebates and/or financing on project

implementation?

○ Conclusion: For small and medium projects, timing is not an important factor in

rebate or financing program participation. For large and very large projects, it

becomes marginally more important. Both interview and survey respondents


indicated a preference for direct payments to contractors or vendors in the context

of both rebate and financing programs. Interview respondents also indicated that

receipt of funds upfront is preferred. Survey respondents indicated preference for

financing programs that reimburse on an invoice-by-invoice basis, rather than lump

sum dispersal after project completion, for large and very large projects.

Additionally, several interview respondents stated that uncertainty in the timeframe

for rebate approval and/or disbursement conflicts with rigid public agency funding

and procurement timeframes for capital projects, creating a barrier to participation.

Pay-for-performance programs also present tracking and reporting issues that may

inhibit public sector participation.

○ Recommendation: Rebate and incentive programs should have clear timeframes

for application submittal, approval, and disbursement that align with public agency

fiscal schedules. Programs that require participants to adjust or delay project

schedules to accommodate approval processes are less accessible to public

sector customers. Programs that make payments directly to contractors or vendors

are better suited to address timeline constraints, but requiring agencies to use

specific products or vendors may conflict with public agency procurement

regulations, particularly for larger projects. Financing programs should provide

funding upfront whenever possible, and larger projects are better served by

programs that reimburse the customer as progress payments are made, reducing

or eliminating carrying cost and improving project cash flow.

● Is there a relationship between project cost and the need for financial products and support



○ Conclusion: In general, programs become more important as project costs

increase. Rebate and technical assistance programs are marginally important for

small and medium projects, but they become very important or essential for large

and very large projects. Financing programs are only important for large and very

large projects. For DAC agencies, the trends are mostly the same, but all programs

become even more important for large and very large projects for DAC agencies

than for non-DAC agencies.

○ Recommendation: In general, public sector customers need more support from

rebate, financing, and technical assistance programs in order to complete deeper

and more expensive retrofit projects. DAC agencies need an even higher level of

support for medium-sized projects and above. As discussed in a previous

recommendation, regulatory processes or program requirements that apply higher

levels of eligibility rigor or complexity for larger projects, due presumably to

increased program resource consumption and risk exposure, create barriers to

participation for deeper energy efficiency projects and ultimately fail to address this

key market need. Conversely, programs that provide incentives or rebates for

small individual measures or projects are less effective in driving non-freerider

energy efficiency project investment in the public sector and should be updated to

provide financial products or services that can scale proportionally with project size

and depth of retrofit. For example, the Energy Leader Partnership tier levels


utilized by local government partnerships (LGPs) are a form of ratcheting incentive

mechanism that provide increasing incentive rates as program participation

increases across multiple projects. A similar structure that rewards deeper retrofits

with greater rebate, financing, and/or technical support services would be more

effective in addressing the large project market gap.

● Which product or service is the most critical to completing energy efficiency projects:


○ Conclusion: Overall, technical assistance programs received the highest average

importance scores, rankings, and satisfaction scores among interview and survey

respondents. Rebates may be more important for small and medium projects, but

more agencies rated technical assistance programs as “essential” overall, and

technical assistance programs were consistently rated as more important for large

and very large projects. Interview respondents reported greater satisfaction with

technical assistance programs, and scored them as the most important among the

three program categories. Many interview respondents noted that without technical

assistance programs, they would not have been able to participate in rebate or

financing programs due to limited staff resources and a lack of internal technical

expertise. Energy audits and financial analysis were identified as the most

important TA services across all project sizes, with procurement support becoming

important for larger projects.

○ Recommendation: Technical assistance programs remove multiple barriers to

energy efficiency project implementation. By providing no-cost energy audits and

financial analysis, agencies avoid taking on the financial risk involved in identifying

and developing projects. TA programs provide supplemental resources that can

cover the staffing gap for agencies and serve as an objective technical/engineering

service provider without triggering procurement regulations. They also provide a

platform for connecting agencies with other rebate and financing programs, helping

customers navigate program and policy requirements and ensuring a more

satisfactory customer experience. This reduces the marketing, outreach, and

technical support responsibilities of rebate and financing program administrators

and implementers, which may improve the cost-effectiveness of those programs,

depending on the nature of the TA program. The findings of this study support the

need for technical assistance programs that can support public agency energy

efficiency initiatives across the state, and the data suggests that rebate and

financing programs should be paired with a technical assistance program as often

as possible in order to improve access and participation. The SoCalREN Public

Agency Programs, the SCE Water Infrastructure Systems Efficiency (WISE™)

program, and the PG&E RAPIDS program are regional and market segment

specific examples of this symbiotic relationship between technical assistance

programs and rebate or financing programs, but a more consistent deployment of

this model is required in order to reach the statewide public sector market.28

28 "PG&E Advice Letter GAS_4284-G/5894-E." 18 Jul. 2020,

https://www.pge.com/tariffs/assets/pdf/adviceletter/GAS_4284-G.pdf. Accessed 5 Jan. 2021.

https://www.pge.com/tariffs/assets/pdf/adviceletter/GAS_4284-G.pdf


● Which financial products and/or support services are most valuable to public agencies

serving DACs?

○ Conclusion: DAC agencies also identified technical assistance programs as the

most important program type. For larger projects, technical assistance is even

more important; 69% and 77% of DAC survey respondents scored TA programs

as at least “very important” for large and very large projects respectively, and

roughly 62% rated them as “essential” for both categories.

○ Recommendation: As noted above, technical assistance programs should be

offered to public agency customers to reduce barriers to energy efficiency project

development and implementation. If budget carve-outs and minimums are used as

a policy approach to achieve a minimum portion of program or portfolio

participation by DAC customers, then technical assistance programs must be

prioritized in the funding allocation. Technical assistance programs can maximize

the benefit and reach created by such policies and ensure that public agencies

serving disadvantaged communities have equal access to participation in energy

efficiency programs and services. DAC-focused technical assistance programs

should ensure that energy benchmarking, energy audits, and financial analysis are

among the core services offered, with procurement support available for more

expensive projects.

● Do rebate, financing, and technical assistance program preferences vary by public agency

subsector?

○ Conclusion: The study team attempted to include market segments, as defined

in Section 3.2.2, as an additional strata within the public sector market.

Unfortunately, due to limited survey participation and customer data privacy issues

encountered in claims data collection, this level of analysis was unattainable in this

study. No master contact list of public sector employees with energy efficiency

project knowledge is currently available to evaluators.

○ Recommendation: A statewide market characterization study of the differences

in program preferences among municipal governments, school districts, and

special districts requires a substantial data collection effort. The IOU PAs may be

better positioned to conduct such a study using their own claims data and by

leveraging their customer service teams to collect feedback from agencies.


6. Appendix A: Bibliography

Cadmus Group. Evaluation of the On-Bill Financing - Alternative Pathway, PY2018-

2019. Prepared for Pacific Gas & Electric, 2020,

https://pda.energydataweb.com/api/view/2422/OBF-AP%20PY18-

19%20Process%20Evaluation_Final.pdf.

Cadmus Group. 2010-2012 CA IOU On-Bill Financing Process Evaluation and Market

Assessment. . Prepared for California Public Utilities Commission, Energy Division,

2012,

https://pda.energydataweb.com/api/view/846/OBF%20Final%20Report%2C%20May%2

02012.pdf.

California Energy Commission. Climate Zone tool, maps, and information supporting the

California Energy Code, December 2020, https://www.energy.ca.gov/programs-and-

topics/programs/building-energy-efficiency-standards/climate-zone-tool-maps-and.

California Environmental Protection Agency. “Designation of Disadvantaged

Communities Pursuant to Senate Bill 535 (De Leon).” April 2017,

https://calepa.ca.gov/wp-content/uploads/sites/6/2017/04/SB-535-Designation-Final.pdf.

Accessed December 2020.

California Office of Environmental Health Hazard Assessment. “About CalEnviroScreen.”

https://oehha.ca.gov/calenviroscreen/about-calenviroscreen. Accessed December 2020.

California Public Utilities Commission. DECISION RE ENERGY EFFICIENCY GOALS

FOR 2016 AND BEYOND AND ENERGY EFFICIENCY ROLLING PORTFOLIO

MECHANICS (D.15-10-028). 2016,

https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M155/K511/155511942.pdf.

Accessed December 2020.


California Public Utilities Commission. “Evaluation Studies Public Document Search.”

California Energy Efficiency Contracts, https://pda.energydataweb.com/.

California Public Utilities Commission. Regulating Energy Efficiency: A Primer on the

CPUC’s Energy Efficiency Programs. 2016,

https://www.cpuc.ca.gov/uploadedFiles/CPUC_Public_Website/Content/News_Room/Fa

ct_Sheets/English/Regulating%20Energy%20Efficiency%200216.pdf.

California Uniform Construction Cost Accounting Commission. Cost Accounting Policies

and Procedures Manual. 2019 Edition, https://sco.ca.gov/Files-ARD-

Local/cuccac_manual.pdf.

The Energy Coalition. Public Sector Market Characterization Financing Study Research

Plan. Prepared for Southern California Regional Energy Network, 2020,

https://pda.energydataweb.com/api/view/2395/SoCalREN%20Public%20Sector%20Mar

ket%20Characterization%20Financing%20Study%20-

%20DRAFT%20Research%20Plan.pdf. Accessed January 2021.

Environmental Financial Advisory Board. Municipal Energy Efficiency and Greenhouse

Gas Emissions Reduction: Financing and Implementing Energy Efficiency Retrofits in

City-Owned Facilities. Prepared for US Environmental Protection Agency, 2014,

https://www.epa.gov/sites/production/files/2014-

04/documents/efab_report_municipal_engergy_efficiency_ghg_emissions_reduction.pdf.

Harcourt Brown & Carey. Energy Efficiency Financing in California Needs and Gaps:

Preliminary Assessment and Recommendations. Prepared for California Public Utilities

Commission, Energy Division, 2011, http://www.harcourtbrown.com/wp-

content/uploads/CPUC_FinancingReport_HBC_Jul8v2.pdf.

League of California Cities. “COVID-19 Fiscal Impact on California Cities Infographic.”

2020, https://www.cacities.org/Images/COVID19-Fiscal-Impact-on-CA-Cities-

Infographic-FIN.aspx. Accessed January 2021.


Pacific Gas and Electric Company. On-Bill Financing Customer and Contractor

Handbook. https://www.pge.com/pge_global/common/pdfs/save-energy-

money/financing/energy-efficiency-financing/handbook_obf.pdf.

Pacific Gas & Electric Company. “PUBLIC UTILITIES COMMISSION REVISED.” 2016.

https://www.pge.com/nots/rates/tariffs/tm2/pdf/GAS_3697-G-A.pdf. Accessed January

2021.

San Diego Gas & Electric. On-Bill Financing Handbook.

https://www.sdge.com/sites/default/files/documents/FINAL_S1970117_OBF%20Handbo

ok.pdf.

SoCalGas. “Zero Percent On-bill Financing.” https://www.socalgas.com/for-your-

business/energy-savings/zero-percent-financing. Accessed December 2020.

Southern California Edison Company. Energy Efficiency Rolling Portfolio Business Plan

For 2018- 2025, 2017, p. 156.

Southern California Edison Company. “On-Bill Financing Fact Sheet.” 2019,

https://www.sce.com/sites/default/files/inline-

files/OBF%20Fact%20Sheet%201119_WCAG.pdf.

York, Dan, et al. Expanding the Energy Efficiency Pie: Serving More Customers, Saving

More Energy Through High Program Participation. American Council for an Energy-

Efficient Economy, 2015,

https://www.aceee.org/sites/default/files/publications/researchreports/u1501.pdf.


7. Appendix B: Data Collection

Instruments

7.1 Online Survey Instrument













7.2 Interview Guide




8. Appendix C: Data Analyses

8.1 Market Overview Analysis

● Public Sector Market Characterization Financing Study - Market Overview Data

8.2 Claims Data Analysis

● Public Sector Market Characterization Financing Study - Claims Data Analysis

8.3 Survey Response Analysis

● Public Sector Market Characterization Financing Study - Survey Response Analysis

8.4 Interview Response Analysis

● Public Sector Market Characterization Financing Study - Interview Response Analysis

https://docs.google.com/spreadsheets/d/1-QVMRPDxvAUgXcHAhe4sJqA611WSM99nM9SmDkbLGp4/edit#gid=1566112283

https://docs.google.com/spreadsheets/d/1Xa9PQhSax9q7mppKp_xX-EoqCAOYUOdNS-_yTdvoBlQ/edit#gid=1282966893

https://docs.google.com/spreadsheets/d/1l3_67cmGtpNjN-RXxy7tIpeSt08dTxlSpOfuwnZKuPA/edit#gid=439025806

https://docs.google.com/spreadsheets/d/1p9VrwiSBVRb7R9UpKI_AhIubRPCUmQRLFvV_ytfaYvg/edit#gid=2145931996

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