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Residential Energy Efficiency Loan (REEL) Program Compliance Training for Contractors Please check the CAEATFA website and GoGreenFinancing.com periodically for updates. v.7/16/2019
Residential Energy Efficiency Loan (REEL)
Program Compliance Trainingfor Contractors
Please check the CAEATFA website and GoGreenFinancing.com periodically for updates.
v.7/16/2019
Table of Contents
•REEL Benefits For Your Customers Slide 18
•Contractor Participation Requirements Slide 19
•Getting Approved for REEL Slide 20
Part 1: Getting Started Slides 5 – 21
•Borrower Eligibility Slide 24
•Property Eligibility Slide 26
•Mobile and Manufactured Homes Slide 27
•Eligible Energy Efficiency Measures (EEEMs) Slide 28
•Project Eligibility Slide 32
• Illustrating the 70/30 Split Slide 33
•Safety Test Requirements Slide 36
•QA/QC Requirements Slide 39
• Inspection Process for REEL Slide 40
Part 2: Eligibility Requirements Slides 22 – 42
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Table of Contents
• The REEL Process: At a Glance Slide 45
• Step 1: Credit Approval Slide 46
• REEL Bill Impact Estimate Slide 47
• Step 2: Project Approval Slide 49
• Preparing the Estimated Itemized Invoiced Slide 50
• Step 3: Project Completion Slide 52
• Preparing the Certificate of Completion Slide 53
• Step 4: Closing & Funding Slide 54
• The REEL Borrower Form Slide 55
• The REEL Process: In Detail Slide 56
Part 3: The Process Slides 43 – 57
• What Does “Participating Contractor” Really Mean? Slide 59
• REEL Lender Chart Slide 62
• GoGreenFinancing.com/Residential Slide 63
• Your Contractor Liaison Slide 64
• Next Steps to Getting Approved Slide 66
Part 4: Be Successful Slides 58 – 6
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Program Compliance Training
Part 1: Getting Started✓Benefits to customers & requirements to participate
Part 2: Eligibility Requirements✓Eligibility requirements for: Borrowers, Properties, Eligible Energy Efficiency Measures
(EEEMs), non-energy measures, and QA/QC
Part 3: The Process✓Overview of forms, loan funding, and payment
Part 4: Be Successful ✓Participating Lenders & products, marketing opportunities and more resources
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Part 1: Getting Started
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GoGreen Financing
GoGreenFinancing.com is the new face of energy efficiency financing.
GoGreen Financing offers financing solutions through the California Hub for Energy Efficiency Financing (CHEEF). The CHEEF is a public-private partnership between the state of California and California's investor-owned utilities.
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In partnership with:
Introducing REEL
The Residential Energy Efficiency Loan (REEL) program is the first financing program available on GoGreen Financing.
REEL was designed to help California homeowners and renters access attractive financing for energy efficiency projects.
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REEL Benefits
✓ Trusted Option: Administered by the state and supported by the investor-owned
utilities
✓ Attainable: Unsecured loans with a broad range of credit scores approved
✓ Some lenders offer loans for borrowers with credit scores as low as 580
✓Uncomplicated: No prepayment penalty and requires no money down
✓ Inclusive: An option for borrowers with low credit or no home equity
✓ Flexible: Complete energy and non-energy projects under a single loan
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Why is financing important?
✓ Nationwide, 75% of energy improvement projects over $10,000 and 90% of projects over $15,000 are financed.
✓ Energy projects using financing tend to have deeper energy savings and greater scopes of work.
✓ Financing allows contractors to sell jobs based on monthly payments and budget impact, rather than total construction cost.
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How does REEL help Californians save energy?
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REEL program partners with
lenders to reduce loan
risks.
REEL lenders offer attractive
terms.
REEL contractors offer these
attractive rates to customers.
Customers use financing to
complete larger energy-saving
projects.
321 4
Participating Lenders & Available Products
Product Terms:*
APR: 5.99% to 9.99%T
Loan Amount: $2,500-$50,000
Min. Credit Score: 580 for some lenders
Term Length: Up to 15 years
*Terms vary by lender; this table represents the ranges of all potential product terms.T Lower rates available with regional lenders
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Why become a REEL Participating Contractor?
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Increase your business✓ Larger scope and number of projects✓ Your customers get access to attractive financing
Receive quick loan funding✓ Lenders fund loans within 24 hours of loan closing
Take advantage of a statewide marketing campaign✓ Statewide marketing campaign promotes REEL to
homeowners
Gain credibility as a contractor with a state-sponsored program
No cost to participate!
Customers can find you
• Company Name• Address• CSLB Number• Contact Person• Phone• Email• Website• Service Area• Services Offered• Languages Spoken:
• Korean• Russian• Hmong• Hindi• Arabic
• Spanish• Chinese (Mandarin)• Chinese (Cantonese)• Vietnamese
GoGreenFinancing.com/ContractorFinder
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Recognize this customer?
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His AC just went out, and he’s short on cash.
You want to sell him a SEER 16 unit, insulation, and air sealing, but…
“I want the cheapest fix you’ve got. Forget the insulation!”Broke Bob
How about this one?
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“I only have $5,000 in my savings account.”
She wants the greenest house on the block.
She’s on board with upgrading her HVAC system, adding insulation, and air sealing her home, but…
Energy-Conscious Ella
Or this couple?
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They want new windows, but can only do the front of the house with their current budget.
They’re focused on the look, comfort, and quiet they’ll get with dual pane windows.
“Putting a lien on the house isn’t worth it.”No Lien Nancy & Ned
Energy efficiency, not solar
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✓ REEL is an energy efficiency financing program
✓ The program does not cover distributed generation projects, like solar
✓ If your company is primarily a solar or battery storage company, this program is probably not the right fit
✓ REEL supports California’s goal to double energy savings through energy efficiency by 2030
“Reduce Before You Produce”
Help your customers reduce their energy use before they invest in solar – so they buy the right size solar system
later.
Customer Benefits
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✓ Unsecured loans (property not used as collateral)
✓ Finance 100% of the project costs
✓ Loans up to $50,000
✓ 15 year terms allow for low monthly payments
✓ Broad range of credit scores approved: Some lenders allow credit scores as low as 580
✓ Flexible scopes of work (30% of loan can be use for non-energy efficiency measures)
✓ $0 closing costs or maintenance fees
Contractor Participation Requirements
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✓ Contractors State License Board (CSLB) license relevant to work performed
✓ No outstanding judgments or liens. No disciplinary actions within the previous year
✓ Commercial general liability insurance coverage ($1,000,000 per occurrence)
✓ Maintain legally required workers’ compensation insurance
✓ Comply with all applicable laws and maintain all required state licenses
✓ Good standing with all governmental authorities
✓ Attend REEL program training
Getting Approved for REEL
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1. Attend REEL Program Compliance training
2. Complete the three-page Participating Contractor Application available at: GoGreenFinancing.com/ResidentialContractors
3. Submit the application to [email protected]. • Include Proof of Insurance
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Part 1: Takeaways
1. REEL is a good option for customers who don’t want a lien on their property.
2. A broad range of borrowers can qualify for REEL and access up to $50,000 in unsecured financing with term lengths up to 15 years!
3. Contractors in the program must have active license(s) and meet insurance requirements.
4. Application to the REEL program can occur after completion of this training by submitting a short, 3-page application and proof of insurance to [email protected]
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Find the application at GoGreenFinancing.com/ResidentialContractors
Part 2: Eligibility Requirements
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A loan enrolled must meet eligibility requirements for:
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Borrower
Property
Eligible Energy Efficiency Measures (EEEMs)
Project
QA/QC
Borrower Eligibility Check
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✓ Property Owner or Tenant with Owner’s written permission
✓ Some lenders allow credit scores as low as 580
✓ Borrowers with no credit scores are eligible with no derogatory credit reports
✓ Debt to Income Ratio of less than 55%
Lenders will check Borrower’s credit and eligibility when the Borrower applies for the loan. Lenders may have additional underwriting requirements beyond what REEL requires. The final credit approval decision is made by the lender.
!
The borrower is not always the utility customer!
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Borrower
• Lender’s borrower of record
• Signs the REEL Borrower Form
Utility Customer
• On the Utility Bill
Property Eligibility Requirements
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✓ Residential property:
✓ Single-Family Home
✓ Townhome
✓ Condominium
✓ Some lenders may limit financing to a single unit
✓ Must receive gas or electric service from an
Investor-Owned Utility (IOU), as shown below
✓ Duplex, Triplex or
Fourplex
✓ Manufactured Home
Manufactured & Mobile Home Eligibility Requirements
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✓ Anchored to a permanent foundation
✓ Site built and constructed of durable materials such as concrete, mortared
masonry, or treated wood
Eligible Energy Efficiency Measures (EEEMs)
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✓ A long list of popular energy efficiency measures can be installed and
financed with the REEL program.
✓ The EEEMs list includes the measure name, energy efficiency
specifications, and measure power source (gas, electric or both).
✓ At least 70% of the loan must be used to fund EEEMs
Eligible measures are listed on the EEEMs list:GoGreenFinancing.com/ResidentialContractors
Examples of EEEMs
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✓ Air Sealing
✓ Appliances
✓ Cool Roofs
✓ Duct Sealing
✓ HVAC
✓ Insulation
✓ Lighting
✓ Pool Pumps
✓ Water Heating, including tankless
✓ Windows
…and More
Eligible measures are listed on the EEEMs list:GoGreenFinancing.com/ResidentialContractors
Accessing the EEEMs List
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Eligible measures are listed on the EEEMs list:GoGreenFinancing.com/ResidentialContractors
Using EEEMs to Qualify Projects
Installed measures must:
• Be on the EEEMs list
• Meet measure specifications included on the EEEMs list
• Use the power source (gas or electric) provided by to the borrower’s IOU
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Eligible measures are listed on the EEEMs list:GoGreenFinancing.com/ResidentialContractors
Project Eligibility Requirements
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At least 70% of loan proceeds must fund EEEMs and other necessary alterations
✓ Example: HVAC + permit costs + wall repair around the HVAC
Up to 30% of loan proceeds may be used for other home improvements
✓ Cabinets, fixtures, flooring, etc.
✓ Electric measure upgrades when electricity is provided by a non-IOU (ex. MUNI, public utility, co-op)
✓ Maximum loan amount eligible for the credit enhancement: $50,000 per unit ($35,000 if borrower has no credit score)
✓ 70% of loan must fund EEEMs and other necessary alterations.
✓ Work completed by a Participating Contractor enrolled in the REEL program as of the date the work was started (or by a self-installer if measures are eligible for self-install)
EEEMs and other necessary alterations
Non-energyor muni utility measures
Illustrating the 70/30 Split
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Eligible Measures
✓Located on the EEEMs list for the IOU power source serving the property
✓Total cost may include soft costs (design, permits, etc.) and necessary construction or legal requirements to install the measures (installation, patching, painting, etc.)
Other Home Improvements
✓ Cabinets, fixtures, water efficiency measures, etc.
Energy measures for a non-IOU power source
✓ Electric upgrades when electricity is provided by a municipal or public owned utility company or electric cooperative
EEEMs and other necessary alterations
Non-energyor muni utility measures
Sample Loan: EEEMs, Necessary Alterations, Other Improvements
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Item Cost
Gas Furnace + wall repair $8,000
Attic Insulation $3,000
Duct Sealing $3,000
Smart Oven Not an EEEM $2,500
Electric Water Heater Municipal utility $3,500
Total Project Cost $20,000
} 70% ($14,000)
} 30% ($6,000)
Combine Financing with Utility Rebates and Incentives
✓ Financing + Rebates = access to greater savings
✓ Measure may be eligible for financing but not rebates
✓ Borrowers may choose whether or not to pursue a rebate
✓ Rebates may allow for larger project scopes
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REEL Safety Test Requirements
Projects with:
3 or more EEEMs
+ Combustion Appliance on the Property
+ Project includes either:
Whole building air sealing
Duct sealing/duct replacement
Attic insulation and air sealing
= CAS/CAZ/NGAT needed
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A CAS/CAZ/NGAT Test must be
performed by someone who is:▪ Approved to participate in Home
Upgrade or Advanced Home Upgrade Program or
▪ BPI Certified or
▪ NGAT Certified
Safety Test Responsibilities
REEL allows multiple contractors to work on a single project.
In the event that multiple Participating Contractors work on a project, (and no contractor serves as the “General”) and the combined measures of the project trigger a safety test, the Participating Contractor who installed any of the triggering measures shall arrange for the safety test, unless otherwise agreed upon by the Participating Contractors.
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Measures that trigger a Safety Test:• Whole building air sealing• Duct sealing/duct replacement• Attic insulation and air sealing
Permitting Requirements
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Some financed measures require permitting.
Contractors must:
• Comply with local jurisdiction permit requirements
• Close permits after installation
• Provide permit numbers on the Certificate of Completion
• Keep closed permits on file for 1+ year
• Provide a copy within 2 weeks of request • If the homeowner closed the permit, let us know
Failure to close permits will deem the project non-compliant.
Quality Assurance & Quality Control
All REEL Projects must meet QA/QC requirements:
✓ Eligible improvements must be installed by a Participating Contractor or self-installer
✓ Contractor/Borrower must obtain all required permits and approvals
✓ Contractor must adhere to all Title 24 code requirements, which can vary based on climate zone
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Zones 1-9
Zones 10-16
Inspection Process for REEL
ALL projects:
✓ Desk Audits
✓ Retain all paperwork, such as permit numbers
RANDOMLY SELECTED projects (except for projects receiving an IOU, REN or CCA rebate/incentive):
✓ Field Inspections
✓ May be conducted within one year of enrolling the loan
✓ Borrower will be notified at least 10 business days prior to inspection
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The more projects you do with successful
inspections, the fewer inspections
we will do!
Follow the Rules
Contractors may be removed from the REEL Program for:
✓ False or misleading claims about any part of the REEL Program or its performance
✓ Fraudulent or deceitful conduct in the sale or installation of measures
✓ Violation of the REEL Program regulations
✓ Misrepresentation or non-compliance with program requirements
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For additional information:http://treasurer.ca.gov/caeatfa/cheef/reel/regulations/index.asp
Part 2: Takeaways
Five areas of eligibility for REEL projects:
✓ Borrower: Minimum credit score of 580
✓ Property: Residential property serviced by an IOU; borrowers may upgrade up to 4 units.
✓ EEEMs: Measures must meet specifications listed on the Eligible Energy Efficiency Measures (EEEMs) list and use the power source for the IOU serving the property
✓ Project: At least 70% of the loan proceeds must fund EEEMs and other necessary alterations.
✓ QA/QC: Secure proper permits, ensure all Title 24 requirements and perform Safety Tests when required by the program.
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Part 3: The Process
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Before We Get Started
Currently, all REEL lenders use a direct lending platform.
This means REEL contractors are not involved in Loan/Credit Approval discussions.
The lender will contact the contractor after the customer has received credit approval.
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Project scope
Loan/Credit Approval
Contractor
Borrower Lender
Project approval
Credit Approval Project Approval Project Completion Closing & Funding
1 2 4
• Borrower seeks Credit Approval.
• Lender approves credit.
• Submit Estimated Itemized Invoice.
• Lender provides Project Approval.
• Contractor begins work.
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• Contractor completes project.
• Contractor submits project completion paperwork.
• Borrower submits loan closing paperwork.
• Contractor is funded.
The REEL Process – At a Glance
Discuss Credit Approval
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1. Introduce the REEL Program as a financing option
✓GoGreenFinancing.com/Residential
2. Provide the customer with program resources:
✓Program flyer
✓Bill Impact Estimate (BIE)
✓Lender Chart
3. Show customer how to apply for credit approval with their selected lender
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REEL Bill Impact Estimate
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It is a program requirement to present a Bill Impact Estimate to your customer before beginning the project.
You have two options:
1. You can create an estimate using energy modeling software or
2. Use the Bill Impact Estimate (BIE)
✓ Download the BIE from the Resources tab on the GoGreen Financing website: GoGreenFinancing.com/ResidentialContractors
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Credit Approval
✓ Your customer will apply for a loan directly with one of the REEL lenders.
✓ Your customer will submit a current utility bill.
✓ Lenders usually provide credit approval within 24 hours.
✓ Once the customer or lender tells you they have been approved for financing, we can transition to Step 2: Project Approval.
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Project Approval
✓ Once your customer has received credit approval, you will prepare and submit an Estimated Itemized Invoice.
✓ Available for download at GoGreen Financing under Contractor Resources:GoGreenFinancing.com/ResidentialContractors
✓ Please be sure to fill out the form in its entirety – including the EEEMs IDs, measure names, indication as new or replacement, quantity and costs.
✓ Submit the form to the lender. The lender will inform you and the customer of your Project Approval so that you can begin work.
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Do not begin work until you receive Project Approval from the lender.
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Preparing the Itemized Invoice
✓ Submit the Estimated Itemized Invoice to the lender to verify the project’s eligibility (Takes about 5 minutes to complete)
✓ Allows for easy calculation of the 70% EEEMs requirement/30% flexible scope of work calculation.
✓ Video tutorial on how to fill out the Itemized Invoice and sample completed invoices at GoGreenFinancing.com/ResidentialContractors
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2
The EEEMs List & Itemized Invoice
Preparing the Itemized Invoice requires you to use the list of eligible measures to look up measures by your customer’s utility provider power source (gas, electric, or both).
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2
The EEEMs Identifier must be entered exactly as it appears on the list.
Project Completion
After you have completed the project, you will prepare:
1. A FINAL Itemized Invoice (same as Estimated Itemized Invoice, but indicate work completed and final costs)
2. A Certificate of Completion
Please be sure to perform all necessary safety tests upon completion of the project. (See Part 2.)
NOTE: If your project property has one or more combustion appliances, a safety test may be required per REEL program regulations.
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Preparing the Certificate of Completion
✓ Fill out Sections 1-4.
✓ Confirm all required information on the form has been supplied.
✓ Pay careful attention to the Safety Test requirements.
✓ Available for download in the Contractor Resources section of the GoGreen Financing website: GoGreenFinancing.com/ResidentialContractors
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3
Closing & Funding
✓ Submit all required paperwork to the lender
✓Certificate of Completion
✓Final Itemized Invoice
✓REEL Borrower Form (varies by lender)
✓ Typically, the lender will ask the borrower to sign the
REEL Borrower Form at loan closing.
✓ After all documents have been received, the lender
will disburse payment. All REEL lenders fund within 24
hours of closing.
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The Borrower Form
✓ The borrower will sign
✓ Two-page document, both requiring a signature:
✓Privacy Rights Disclosure
✓Project Certifications
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4
Credit Approval Project Approval Project Completion Closing & Funding
1 2 4
• Borrower seeks Credit Approval.
• Lender approves credit.
• Submit Estimated Itemized Invoice.
• Lender provides Project Approval.
• Contractor begins work.
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• Contractor completes project.
• Contractor submits project completion paperwork.
• Borrower submits loan closing paperwork.
• Contractor is funded.
❑ Bill Impact Estimate❑ Lender Financing
Application❑ Proof of Income❑ Additional docs*
❑ Utility Bill❑ Estimated Itemized Invoice
❑ Final Itemized Invoice❑ Certificate of Completion ❑ REEL Borrower Form
*Each lender may have additional required documents. Please contact the lender.
The REEL Process – In Detail
Part 3: Takeaways
Work on project can begin after customer has received both credit and project approval from lender.
Ensure these program forms are completed properly, signed and dated by you and the borrower, and passed on to the lender:
✓ Utility Bill
✓ Itemized Invoice
✓ Certification of Completion
✓ REEL Borrower Form
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Part 4: Be Successful
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What does it mean to be a “Participating Contractor?”
✓ Get recognized as a Participating Contractor on the GoGreen Financing website
✓ Take advantage of a statewide marketing campaign driving customers to the
REEL program
✓ Give your customers access to attractive financing that is an alternative to PACE
or liens on the home
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Program Resources: Where to Download
GoGreenFinancing.com > Partners > For Contractors: Residential > Resources
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✓ Project forms
✓ Program tools including
the Lender Chart
✓ Marketing resources
including Talking Points, a
PowerPoint, and flyer
Flyer and Co-Branded Collateral
• Great leave-behind for customers
• Email [email protected] • Include your logo
• Collateral will include:• Website
• Email Address
• Phone Number
• You will receive PDFs in both English and Spanish
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REEL Lender Chart
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“The state-administered REEL
program works with local lenders to
encourage projects that save energy.”
GoGreenFinancing.com/Residential
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The GoGreen Financing website can help you:
✓ Explain benefits of the REEL Program to
your customers.
✓ Answer frequently asked questions.
✓ Showcase yourself as a REEL Participating
Contractor.
✓ Introduce lenders and their REEL products.
Your Contractor Liaison
✓ Provide support with REEL program questions
✓ Help you utilize the tools and resources
✓ Walk you through your first few project approvals and how to work with REEL lenders
✓ Help you with how to present financing and the REEL product options to your customers
✓ Complete inspections of non-rebated projects and help you comply with program rules
You will be contacted by your personal Account Manager within a week of your program approval.
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[email protected]: 800-484-0109
How can we help you?
GoGreenFinancing.com offers self-help, including:
• Application to the program
• Blank program forms
• Sample loan packages
• Project eligibility
• Financing products
• Lender profiles
• Homeowner resources
Contact Frontier Energy for program assistance, including:
• Project eligibility outside of the norm
• Co-branded collateral & marketing support
• Assistance with program forms
• Questions about how to use the EEEMs list
• Questions about required documents and the Itemized Invoice
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[email protected]: 800-484-0109
Next Steps to Getting Approved
Attend REEL Training: Live or On-Demand Visit GoGreenFinancing.com
Complete the three-page Contractor Application GoGreenFinancing.com/ResidentialContractors
Submit the application to [email protected]
Please Include:✓Proof of Insurance
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