Clean Energy Financial Innovation ProgramAn ARRA-SEP Supported Credit Enhancement and Financing Program

April 25, 2012

Agenda

About the Clean Energy Finance and Investment Authority

Overview of the ARRA-SEP Financing ProgramQuestion and Answer

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About the OrganizationClean Energy Finance and Investment Authority

Quasi-public organization – created by PA 11-80 and we are the successor to the Connecticut Clean Energy Fund

Focus – invest in clean energy (i.e. renewable energy, energy efficiency, and alternative fuel vehicles and infrastructure)

Support – financed by a $0.001/kWh surcharge on electric ratepayer bills that provides approximately $30 million a year for investments, federal competitive solicitations and non-competitive resources (i.e. ARRA-SEP), private capital, etc.

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About the OrganizationStrategic Vision and Mission

Support the Governor’s and legislature’s

energy strategy to achieve cleaner, cheaper

and more reliable sources of energy while

creating jobs and supporting local

economic development

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About the OrganizationStrategic Goals

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About the OrganizationStrategic Goals (cont’d)

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About the OrganizationMeasures of Success

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OverviewARRA-SEP Financing Programs

ARRA-SEP grant to Connecticut – $38.50 million to DEEP to support renewable energy, energy efficiency, alternative fuel vehicles and infrastructure and building code and operator training

Clean Energy Fund (CCEF) – $20.00 million to support four grant programs New Programs – solar thermal and geothermal Existing Programs – solar PV and fuel cells

Clean Energy Finance and Investment Authority (CEFIA) – worked with DEEP and repurposed $8.25 million of CCEF grant programs to support credit enhancement programs – of which $1.25 million is for the Clean Energy Financial Innovation Program

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OverviewClean Energy Defined

Statute – C.G.S. Section 16-245n(a) Renewable Energy – solar PV, solar hot water systems, geothermal, micro fuel cells, and micro CHP (does not include small wind) Energy Efficiency – lighting, duct and air sealing, insulation, furnace replacement, boiler replacement, window replacement, AC system

replacement, heat pumps, and other energy efficiency measures (i.e. conversion of heating oil to natural gas) Other – EV recharging station

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Undertake Energy EfficiencyQuick payback to finance solar PV

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OverviewClean Energy Financial Innovation Program

Request for Proposals – competitive solicitation Purposes

Create a competition that incites financial innovation around residential clean energy financing Transition away from the subsidy model towards credit enhancements and financing of clean energy

Funding Available – $1,250,000 to support up to 3 pilot programs Use of Funds – to support credit enhancements (i.e. loan loss reserves, interest rate buy-down, third party insurance) in residential clean energy

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OverviewTypes of Pilot Programs

Extend credit or offer micro-loans to currently underserved low and moderate income households to earn CRA credits Create insurance products that guarantees the energy savings to demonstrate the value of energy efficiency and renewable energy savings to

cover debt service payments and reduce project risks Provide loans to automobile owners to install electric vehicle recharging stations in combination with renewable energy resources at home Proposers can also create a financial product intended to solve a problem in the residential sector, just describe the problem you are trying to

solve through the pilot program

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OverviewRFP Timeline

RFP Issued – April 12, 2012 Pre-Bid Conference Call – April 25, 2012 Proposals Due – May 30, 2012 Projects Selected by CEFIA for Negotiation – June 13, 2012 Target Date to Complete Program Agreement Negotiations – July 9, 2012 CEFIA BOD Approval of Program Agreements – July 20, 2012 Target Launch of the Pilot Program(s) – Fall of 2012

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OverviewProposal Outline

Cover letter Proposal form

Program description Program approach – including flow chart Qualifications and experience, officers and staffing Collaborative services, technical assistance, and training needs from CEFIA (if necessary) Additional statements or materials

15-page limit

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OverviewSample Flow Chart

Home Owner Installer

(Approved by CCEF)

CCEF - DebtCo

(Debt and Incentive)

Appr

oved

Inst

alle

rs

CT Solar Lease, LLC

TaxEquityCo, LLC

(100% Equity)

ITC

Equity

Debt Service

DeveloperCo, LLC

(Developer)

AdminCo,LLC

(Program Admin)

Originate

s Note

Sells

Not

e

Services

Management Fee

Paym

entLease

Rebate/Incentive

Solar PV SystemREFERENCES

Design – 5.5% interest rate, secured, 200% of median income

Consumer Credit Guidelines – 640 if salaried, 680 if self-employed for at least 2 years, 720 if self-employed less than 2 years, no bankruptcy in last 7 years, debt to income or monthly obligations to monthly income 50% for all credit

scores

Performance – 850 loans, 6.0 kW AC average system size, from $5,320/kW rebate in 2009 to $2,731/kW rebate in 2011, and 2 defaults.

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OverviewSelection Process Criteria

Potential of the proposed strategy to attract and deploy capital Feasibility and expected performance of the strategy Simplicity and ease of administration of the proposed strategy and coordination with program partners Skills of the staff, services and level of effort the applicant will provide to make this program a success Ability to reach customers and support contractors Additional statements, ideas and materials that demonstrate the applicant understands the program goals and how the applicant could implement the program

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OverviewFreedom of Information

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CONFIDENTIAL

Question and Answer

Q&A

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Visit us online atwww.ctcleanenergy.com

865 Brook StreetRocky Hill, CT 06067-3444

(860) 257–2170

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