The City of San Diego’s

Clean Generation Program

April 16, 2010

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Clean Generation Program Property Assessed Clean Energy Financing

(PACE)

Purpose: Allows property owners to finance

renewable energy and energy efficiency improvements through loans that would be repaid as an item on the property owner's property tax bill.

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The Benefits

• Loan made to property

• Transferable on sale

• Competitive 20 year rate

• Repayment via property tax bill

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Why?

• Job / Sector Development – Increase demand for local cleantech products and

services

• Leadership– Municipal leadership is required

– Positive cash flow for participants

– Low cost / low risk to the City

• Environment – GHG reduction

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Clean Generation ProgramSelected Team

Renewable Funding, LLC.

• Short term (Gap Financing)

• Core administrative services

California Center for Sustainable Energy (CCSE)

• Administrative services

• CSI integration (State of California Solar Incentive Program)

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Clean Generation ProgramOverview

Funding:

• 20 million dollars with potential for accessing additional funds

• Fully loaded APR = 8.75% (Estimated)

• Duration of Loan up to 20 years

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Clean Generation ProgramEligible Measures

• Energy Efficiency Retrofits

• Insulation

• Heating and Cooling Systems

• A/C retrofits

• Whole House Fan

• Water heaters

• Pool Pumps

• Renewable Energy Fixtures

• Solar

• Wind

• Fuel Cells

• Water Efficiency Fixtures

• Low flow fixtures

• Reclaimed Water Systems

• Water Efficient Irrigation

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Micro-Bond Process

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1 - Submit ApplicationIncludes Project Details Package

2 - Receive Notice to ProceedIncludes Funding Reservation

4 - Submit Funding RequestIncludes Verification Documents

5 - Receive Assessment Contract Documents

8 - Pay Back via Property Taxes

Property Owner Administrator

• Verify eligibility

• Verify project compliance• Generate contract docs

3 - Install Project

6 - Submit Assessment Contract Package

7 - Receive Payment

County

• Place lien• Issue bond• Remit payment

Participation Options

• Energy efficiency requirements

• Short term goal

– Educate and encourage

• Long-term goal

– Serve as a force for market transformation

• Two Phase EE Implementation

– Phase I: Thru December 2010

– Phase II: Starts 2011

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Prerequisites for all properties

• Items that must be replaced:

– Central Air Conditioners (SEER ≤ 7)

– Single Speed Pool Pumps

• Replaced with:

– Central Air Conditioners (SEER ≥ 13)

– Variable Speed Pool Pumps

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Energy Efficiency Prerequisites

• HERS or equivalent audit

• May bypass audit requirement if you use a BPI certified contractor

• Must install fixtures that are pre-approved by the program administrator

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Renewable Energy Prerequisites

• Home Improvement Path– Phase I

• HERS audit

• Must install fixtures that are pre-approved by the program administrator

• Limited system size (70% of load or 130% of baseline)

– Phase II• HERS audit

• Participation in prescriptive track of Whole Home Retrofit program or HomeStar Silver

• BPI Certified contractor required

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Renewable Energy Prerequisites

• Home Performance Path

– Phase I

• HERS audit (Test out: with 20% reduction or HERS II ≤ 100)

• Optional participation in either the performance track of the Whole Home Retrofit Program, or HomeStar Gold

– Phase II

• HERS audit (Test out: with 20% reduction or HERS II ≤ 100)

• Required participation in either the performance track of the Whole Home Retrofit Program, or HomeStar Gold

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Renewable Energy Prerequisites

• Already Efficient Homes

– Phase I & II

• HERS audit (HERS II ≤ 100) or Title 24 2005 / 2008 report

• Demonstrate historical annual consumption ≤ 130% of baseline (Tier 1-2)

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Clean Generation ProgramProgram Design

Program Eligibility:

• Allocation: First come first serve

• Property must reside within the City of San Diego

• Multifamily - four units or less

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Clean Generation ProgramProgram Design

• Underwriting Criteria

– Ownership: Property owner must initiate and sign application

– Property Tax Payment / Title History:

• Must have a good payment history

• No delinquencies in the past 3 years

• No involuntary liens may be on property

– Loan to Value Ratio, 10:1 is suggested ratio

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Clean Generation ProgramHow will people use the program?

• Arguably better financing options exist for solar PV

• Ideal for property owners who:

• Can’t get a home equity line of credit

• Are considering a move in the near future

• Are considering financing whole home retrofits that include both EE and renewable energy

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Sample Costs

Financed Project Costs: $24,000

Solar / Energy Efficiency Package

• Term: 20 Years

• Fixed APR: 8.74% (Estimated)

• Annual Payment: $2,615

• Application fee: $300

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Clean Generation ProgramTimeline

• April - City Council

– Public hearing on district formation

– Approval of resolution of intent

– Ordinance levying special tax approved

– Approval of administrative agreement

• May- City Council

– 2nd reading of the ordinance levying special tax approved

– Hold Public Election

• June– Program Goes Live

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Clean Generation Program

Questions?