Clean Energy Financing Programs - US EPA

Clean Energy

Financing Programs

A Decision Guide for States and Communities

U.S. ENVIRONMENTAL PROTECTION AGENCY JULY 26, 2011

If this document is referenced, it should be cited as:

U.S. EPA State Clean Energy and Climate Program (2011). Clean Energy Financing Programs: A Decision Guide for States and Communities. Prepared by Pat McGuckin, Philip Quebe and Matt Tenney, The Cadmus Group, Inc., and Niko Dietsch, U.S. Environmental Protection Agency.

For more information, please contact:

Niko Dietsch U.S. Environmental Protection Agency Office of Air and Radiation Climate Protection Partnerships Division Tel: (202) 343-9299 E-mail: dietsch.nikolaas@

ii Clean Energy Financing Programs Guide

This Guide is intended to help government entities understand and make

decisions to support appropriate financing programs for their jurisdiction. The Guide describes: ? Financing-program options ? Key components of these programs ? Factors for states and communities to consider as they make decisions about getting started or updating their programs

The Guide's objective is to help government entities facilitate financing support in the commercial and residential sectors, with a secondary focus on helping state and local governments finance improvements to their own buildings. Financing strategies that states and communities can apply to both energy efficiency and renewable energy are covered. The document is intended primarily for users with limited financial background.

Clean Energy Financing Programs Guide i

Table of Contents

Page Chapter One: Clean Energy Financing Programs .............................................................. 1

Important Objectives for State and Local Governments .......................................2 Keys to Success....................................................................................................3 Chapter Two: Key Elements of a Financing Program ........................................................ 5 Target Markets ......................................................................................................6 Funding Options ....................................................................................................9 Security ...............................................................................................................13 Credit Enhancement ...........................................................................................15 Loan Origination and Servicing ...........................................................................16 Chapter Three: Financing Program Decision Tool ............................................................. 17 Rebates ...............................................................................................................19 Revolving Loans..................................................................................................22 Property Assessed Clean Energy (PACE) ..........................................................25 Credit-Enhanced Private Loans ..........................................................................28 HUD PowerSaver ................................................................................................31 On-Bill Repayment ..............................................................................................34 Energy Efficient Mortgages .................................................................................37 Performance Contracting ....................................................................................40 Power Purchase Agreements and Solar Leasing ...............................................43 Chapter Four: Financing Tools and Resources ................................................................ 46

Clean Energy Financing Programs Guide iii

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