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Florida HB 7179 & Energy Efficient Loan Programs

2011 FESC | Tuesday, September 27, 2011

Hal S. Knowles, III Program for Resource Efficient Communities

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Overview

Florida HB 7179 PAF/PACE Qualities of a successful energy efficiency

retrofit programs using revolving loan funds Insights from the building science side Discussion

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For More Information…

http://www.buildgreen.ufl.edu/FloridaGuide_order.pdf

http://www.floridaenergy.ufl.edu/?page_id=273

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Florida HB 7179

Florida House Bill (HB) 7179 provides counties, municipalities, and dependent special districts with the ability to enter into financing agreements with private property owners to fund qualifying building energy conservation/efficiency retrofits, renewable energy generation, and/or wind resistance improvements with repayment occurring through non-ad valorem property assessments on participating properties.

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Florida HB 7179: Energy Conservation/Efficiency

Air sealing and insulating Installing energy-efficient heating, cooling or ventilation

systems Building modifications to increase the use of daylight Replacement windows Installing energy controls or energy recovery systems Installing electric vehicle charging equipment Installing efficient lighting equipment Other similar measures to reduce consumption through

conservation or more efficient use of electricity, natural gas, propane, or other forms of energy

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Florida HB 7179: Renewable Energy

Biomass Geothermal Hydrogen Solar Wind

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Florida HB 7179: Wind Mitigation

Improving the strength of the roof deck attachment Creating a secondary water barrier to prevent water

intrusion Installing wind-resistant shingles Installing gable-end bracing Reinforcing roof-to-wall connections Installing storm shutters Installing opening protections Other similar improvements

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Florida HB 7179: Financing Program Name Variations

Property Assessed Clean Energy (PACE) Property Assessed Financing (PAF) Energy Loan Tax Assessment Programs (ELTAPs) Financing Initiative for Renewable and Solar

Technologies (FIRST) Voluntary Environmental Improvement Bonds

(VEIBs)

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Potential Barriers to Action (Beyond $)

Lack of information Transaction costs Lack of confidence in expected or anticipated

savings Split incentives Length of payback

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Financial Underwriting

Financing Sources: Banks Municipal Bonds Institutional Investors Community Development Financial Institution (CDFI) Qualified Energy Conservation Bonds (QECB) Other

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Financial Underwriting

Methodologies for segmenting, targeting, and soliciting households and businesses with the highest potential to achieve desired goals and objectives Measurable reductions Cost neutral investments Improved occupant comfort

Financing & billing vehicles Maximum and minimum loan thresholds and

cost eligibility

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Financial Underwriting

Repayment obligation security measures and interests Credit enhancement strategies to improve the

attractiveness of the EEFP to prospective borrowers and lenders Leveraged synergies in existing energy efficiency

and conservation incentives such as local electric utility demand side management programs and local, state, and federal rebates and tax credits

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Clean Energy Financing Sponsorship

Local Government-Sponsored Financing Program

Property Assessments

Collected on or in Utility Bill Direct Billing

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Clean Energy Financing Sponsorship

Utility-Sponsored Financing Programs

On-Bill

Tariff No-Tariff

Off-Bill

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Energy Underwriting

Energy consumption baselines and comparative metrics Methodologies and standards for calculating energy

savings Fiscally appropriate prerequisite and eligible pre-

qualifying measures (C+E) Tailor approaches based on energy consumptive use data

and energy audit feedback Useful lifespan potentials of measures (C+E) Homeowner education pedagogy and curricula Energy auditor and building contractor solicitation,

qualification, training, verification, management, and renewal

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Loan Servicing

Standardized procedures, methodologies, mechanisms, and documentation: Loan application, disbursement, repayment, default,

and reporting processes and other related intake and processing criteria

Customer service, management, and protection strategies Data collection, automation, and tracking

measures Financial quality assurance (QA) and quality

control (QC) protocols

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Energy Measurement & Verification

Measurement and verification (M&V) protocols Building performance quality assurance (QA) and

quality control (QC) protocols Estimating potential ROI for financed building

improvements Verify persistence of performance

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Effect of Program Attributes

Lower Interest Rate Higher

Senior Lien Junior Lien Springing Lien UCC1/Asset Based Unsecured

Property Attached Borrower Attached

On-Bill Repayment Separate Enclosure in Utility Bill Separate Billing

Multiple Credit Enhancements No Credit Incentives

Creditworthy Property Riskier Property

Creditworthy Borrower Attributes Riskier Borrower Attributes

Performance Energy Measures (More Efficient)

Prescriptive Energy Measures (Less Efficient)

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Hypothetical Calculations

Avg. Monthly Bill

Potential Avg. Savings with Retrofit Improvements

Package A Package B Package C 30% ↓ energy 30% ↓ water 10% ↓ insurance

30% ↓ energy 30% ↓ water

30% ↓ energy

Electricity @ $300 $90 $90 $90

Water @ $60 $18 $18 $0

Insurance @ $250 $25 $0 $0

Total Savings $133 $108 $90

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Hypothetical Calculations

Loan Term

Package C - Size & Terms of Loan for Financially Neutral Outcome

8% 7% 8% 9%

10 years $8,106 $7,751 $7,471 $7,104

15 years $10,665 $10,013 $9,417 $8,873

20 years $12,562 $11,608 $10,759 $10,003

& with a big enough hammer… Source: www.istockphoto.com

Energy is the ability to do work,

Source: http://www.istockphoto.com/stock-photo-13999264-old-rusty-car.php

22,658 human hours (or)

one human for 10.9 years (or)

330 miles in a VW bus

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For conservation, there’s no place like home! Especially in Florida

What uses more energy? How we dwell?

Or how we move?

Source: Kathryn Ziewitz, University of Florida

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HERS Reference Home (1500 sq ft – 3 bed) North Florida

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Annual Cooling Load (1500 sq ft – 3 bed) Central Florida

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House = Series of Nested Systems

Source: http://www.genewscenter.com/imagelibrary/detail.aspx?mediadetailsid=2369

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Sustainable Dwelling (n. or v.) = Audit + Act + Adapt

Source: http://hes.lbl.gov/consumer

Source: Hal Knowles, University of Florida

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Step 1: Air Seal

Source: Iowa Energy Center. Home Series 1: Home Tightening, Insulation and Ventilation. Source: http://www.energystar.gov/index.cfm?c=home_sealing.hm_improvement_sealing

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Air Sealing Example: House 814

Source: John Linhoss, University of Florida

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Results: House 814

• 11.2 % decrease in air infiltration • Originally built 1985 & Remodeled 2003 • 1200 sq.ft. single story • ACH50 – 8.84

House Pressure (Pascals)

Flow Rate (cfm) BEFORE WEATHERIZING

Flow Rate (cfm) AFTER WEATHERIZING

50 1669 1482

45 1560 1377

40 1417 1258

35 1342 1178

30 1224 1077

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Step 2: Repair Ductwork

Source: http://www1.eere.energy.gov/consumer/tips/ducts.html Source: NREL PIX #04913 (http://www.nrel.gov/data/pix/)

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Step 3: Insulate

Source: Craig Miller, University of Florida

Source: NREL PIX #15100 (http://www.nrel.gov/data/pix/)

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Step 4: Evaluate Windows

SHGC ( ≤ 0.40 )

U-Factor ( ≤ 0.65 )

Visible Transmittance ( Higher = Better )

Air Leakage ( ≤ 0.30 cfm/sq ft )