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April 22, 2014
A study by Deutsche Bank and the Rockefeller Foundation estimates that $279 billion could be invested in energy efficiency retrofitting in the United States. This investment would yield more than $1 trillion in energy savings over 10 years and could create more than 3.3 million job years across the country. These energy savings could reduce U.S. emissions by nearly 10 percent. The United States is currently nowhere near these investment levels. However, innovative energy efficiency financing programs are sprouting up all around the country.
In January, the clean energy finance company Kilowatt Financial announced a partnership with Citibank that will bring an additional $100 million to Kilowatt Financial’s lending power. This type of partnership is a first for Citibank, which is one of the top financiers of the coal industry. Kilowatt Financial has already helped more than 20,000 households finance energy efficiency improvements to save an estimated 57 million kilowatt hours of electricity, equal to 39,000 metric tons of carbon emissions.
In March 2013, the Pennsylvania Department of the Treasury announced a $31.3 million sale of nearly 4,700 Keystone HELP loans to Fox Chase Bank, WSFS Bank, and National Penn Bank. The Keystone Home Energy Loan Program (HELP), which was created by the Pennsylvania Treasury and AFC First Financial Corporation, provides loans for high efficiency furnaces and boilers, geothermal heating and cooling systems, insulation installations, and door and window replacements. To date, the program has financed $63 million in home improvements, saving $2.3 million a year in utility bills.
AFC First, an energy efficiency financing company, announced a partnership in February with several Connecticut utilities to form the Energize Connecticut Heating Loan Program, an on-bill financing program. Participating utilities include the Connecticut Light and Power Company and the United Illuminating Company. The program allows loans of up to $15,000 per home for heating equipment upgrades that meet Energy Star standards. With on-bill financing, loan payments for efficiency retrofits are repaid through the consumer’s utility bill. The intended result is that the energy savings are greater than the loan repayments, providing positive cash flow.
For the past several years, the Environmental and Energy Study Institute (EESI) has worked with South Carolina rural electric cooperatives to create the Help My House (HMH) program, which also used on-bill financing. The HMH program provided low-cost loans to 125 households to finance energy efficiency upgrades to lower their electricity use and save money. Households were able to cut electricity use by an average of 34 percent and save $288 per year after loan payments. Each household saved nearly 11,000 kilowatt hours per year, equal to 7.5 metric tons of carbon emissions, or 937.5 metric tons for all participants.
Author: Ivana Andrade
Sources:
Top-Rated Climate Nonprofit – 4-Star Charity