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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

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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: $24,000Solar / 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?