Building Sustainable Financing Structures for Population Health Insights from Non-Health Sectors: Proceedings of a Workshop (2018) / Chapter Skim
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4 Case Example 2: Clean Energy Financing
4 Case Example 2: Clean Energy Financing
Pages 31-46
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From page 31... ...
Department of Energy's Office of Policy and International Affairs in the Obama administration, examined aspects of financing energy efficiency and how that affects access and participation in the clean energy economy. Joel Rogers, the Sewell–Bascom Professor of Law, Political Science, Public Affairs, and Sociology at the University of Wisconsin–Madison and the director of the Center on Wisconsin Strategy (COWS)
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From page 32... ...
Compared to loan-based or debt-based instruments, inclusive financing results in a larger addressable market, greater acceptance of the financing offer, bigger projects that produce deeper savings, and fewer defaults. (Hummel)
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From page 33... ...
Clearly, there were better health outcomes for the people who were living in affordable housing, and money was saved as well, but Bodaken said that part of the conundrum in these situations is how to allocate resources to pay for these types of programs and initiatives. 1 See the 2015 International Energy Agency report Capturing the Multiple Benefits of Energy Efficiency, Chapter 4: Health and Well-Being Impacts of Energy Efficiency, at http:// www.iea.org/publications/freepublications/publication/Multiple_Benefits_of_Energy_ Efficiency.pdf (accessed July 25, 2018)
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From page 34... ...
Tenants, however, reap a scant 0.3 percent of those dollars, even though they contribute to the funding through fees in their utility bills. To address the fact that residents of affordable housing were not getting the benefit of these funds, NHT launched the Energy Efficiency for All campaign, together with the Natural Resources Defense Council and the Energy Foundation in California.
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From page 35... ...
assessment of the science around climate change found clear connections between population health and the mitigation of climate change impacts.3 Hummel summarized the key findings of the report: there are wide-ranging health impacts of climate change, certain populations are especially vulnerable, preparedness and prevention provide protection from the impacts of climate change, and taking action on climate and other types of co-related pollutants can improve health and provide other social benefits. In the United States, the costs associated with extreme weather disasters attributed to a changing climate are not distributed equally, Hummel said.
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Each state determines how the money will be spent, and energy efficiency has been the top investment priority in each of these states except for Maryland (the priority investment in Maryland was in direct financial assistance with paying utility bills)
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Hummel reiterated the point by Bodaken that more than half of people below median income are renters and, as such, face barriers to entering the clean energy economy, and he added that inclusive financing solutions are needed. Inclusive Financing for Distributed Energy Solutions Pay As You Save® (PAYS®)
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From page 38... ...
There is no consumer loan, lien, or debt; it reaches renters and low-income market segments that are chronically locked out; it leads to higher uptake rates; and it produces deeper energy and carbon savings, Hummel said. Compared to loan-based or debt-based instruments, inclusive financing allows for a larger addressable market, greater acceptance of the financing offer, bigger projects that produce deeper savings, and fewer defaults (see Figure 4-2)
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From page 39... ...
of its inclusive financing program to the best 3 months of its debt-based program showed that within less than 4 months it was able to double the number of customers; achieve 100 percent opt-in by multi-family rental units and greater than 80 percent opt-in by single family units; and double the scale of capital improvements. As a result, it quadrupled the investment deployment in a community that experiences persistent poverty.
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Rogers mentioned several initiatives to address these inequities through financing, such as PAYS® (discussed by Hummel, above) , and the Property Assessed Clean Energy program for homeowners, which pays for energy efficiency upgrades and recoups the costs through a property tax assessment.
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Financing Energy Efficiency Upgrades Russo observed that in the examples that had been discussed, the utilities appeared to not even think about renters at first. She asked for further discussion about the funding for retrofitting buildings and other
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From page 42... ...
He noted that there are private-sector energy service companies that serve both public and private clients and that make their money through energy efficiency. They establish energy performance contracts in which the energy efficiency upgrades are financed and then repaid through the accrued savings (similar to the PAYS® example described by Hummel)
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After the residents responded that they did not want that power plant in their community, the company developed a strong energy efficiency program that actually reduced resident's costs and provided jobs. Bodaken acknowledged that such approaches cannot address the $30 trillion of embedded investment in carbon energy sources, but it is a start,
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Many current financing solutions in use are disqualifying large segments of the population. Hummel suggested that inclusive financing options can produce inclusive results and can accelerate the rapid scaling-up of the necessary capital deployment.
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It has also been the site of massive fossil fuel extraction. Inclusive financing programs for clean energy in the coal fields of Kentucky have demonstrated that this approach can be successful in a region with persistent poverty, Hummel said.
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From page 46... ...
Reinvesting in these places and populations across America can help to build back equity. Rogers agreed with the need for strategic reinvestment in the infrastructure and industries necessary to make the clean energy transition in the United States equitable.
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