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Energy Efficiency Financing for Low- and Moderate-Income Households: Current State of the Market, Issues, and Opportunities

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Energy Efficiency Financing for Low- and Moderate-Income Households: Current State of the Market, Issues, and Opportunities DOE/EE-1634 Energy Efficiency Financing for Low- and Moderate-Income Households: Current State of the Market, Issues, and Opportunities Financing Solutions Working Group August 2017 The State and Local Energy Efficiency Action Network is a state and local effort facilitated by the federal government that helps states, utilities, and other local stakeholders take energy efficiency to scale and achieve all cost-effective energy efficiency by 2020. Learn more at www.seeaction.energy.gov Energy Efficiency Financing for Low- and Moderate-Income Households: Current State of the Market, Issues, and Opportunities was developed as a product of the State and Local Energy Efficiency Action Network (SEE Action), facilitated by the U.S. Department of Energy/U.S. Environmental Protection Agency. Content does not imply an endorsement by the individuals or organizations that are part of SEE Action working groups, or reflect the views, policies, or otherwise of the federal government. This document was final as of August 9, 2017. This work was supported by the State and Local Energy Efficiency Action Network (SEE Action) under Lawrence Berkeley National Laboratory Contract No. DE-AC02-05CH11231. If this document is referenced, it should be cited as: State and Local Energy Efficiency Action Network. (2017). Energy Efficiency Financing for Low- and Moderate- Income Households: Current State of the Market, Issues, and Opportunities. Prepared by: Greg Leventis, Chris Kramer, and Lisa Schwartz of Lawrence Berkeley National Laboratory. FOR MORE INFORMATION Regarding Energy Efficiency Financing for Low- and Moderate-Income Households: Current State of the Market, Issues, and Opportunities, please contact: Johanna Zetterberg Victoria Ludwig U.S. Department of Energy U.S. Environmental Protection Agency [email protected] [email protected] Regarding the State and Local Energy Efficiency Action Network, please contact: Johanna Zetterberg U.S. Department of Energy [email protected] August 2017 www.seeaction.energy.gov iii Acknowledgments Energy Efficiency Financing for Low- and Moderate-Income Households: Current State of the Market, Issues, and Opportunities is a product of the State and Local Energy Efficiency (SEE) Action Network’s Financing Solutions Working Group. This report was prepared by Greg Leventis and Lisa Schwartz of Lawrence Berkeley National Laboratory and Chris Kramer of Energy Futures Group under contract to the U.S. Department of Energy Office of Energy Efficiency and Renewable Energy, Weatherization and Intergovernmental Programs Office and Building Technologies Office. The authors received guidance and comments from many members of the SEE Action Network. We also received highly valuable input from experts and practitioners in a range of fields. Organizations listed were current as of the time communications took place regarding this report. Commissioner Lorraine Akiba, Hawaii Public Utilities Commission Tammy Agard, EEtility Ludy Biddle, NeighborWorks of Western Vermont Colin Bishopp and Jonathan Kevles, Renew Financial Danielle Sass Byrnett, Michael DiRamio, Monica Neukomm, Eleni Pelican and Dave Rinebolt, U.S. DOE Dave Carey, Harcourt Brown & Carey Roger Colton, Fisher, Sheehan & Colton John Davies, Opportunity Council, Washington State Elizabeth Derry, Community Preservation Corporation Jennifer Easler, Iowa Office of Consumer Advocate Dana Fischer, Efficiency Maine Trust Rachel Fredericks, PSE&G Glen Gallo, National Council of State Housing Agencies Bryan Garcia, Kerry O’Neill and Kim Stevenson, Connecticut Green Bank James Gardner, Utility Regulatory Consultant and former Chairman, Kentucky Public Service Commission Annie Gilleo, Lauren Ross and Brian Stickles, American Council for an Energy-Efficient Economy Mark Glick, Hawaii Natural Energy Institute Karen Hamilton and Jeff Pitkin, New York State Energy Research and Development Authority Charlie Harak, National Consumer Law Center Philip Henderson, Natural Resources Defense Council Holmes Hummel, Clean Energy Works Andrew Isaacs, CSRA Harlan Lachman, Energy Efficiency Institute Karla Loeb, PosiGen Victoria Ludwig and Jennifer Macedonia, U.S. Environmental Protection Agency Geoff Marke, Missouri Office of Public Counsel Wally Nixon, Arkansas Public Service Commission Theresa Puccio, New York City Housing Authority August 2017 www.seeaction.energy.gov iv Amanda Roberts, Federal Reserve Board Patrick Sabol, Groundswell Bruce Schlein, Citi Brian Sloboda, National Rural Electric Cooperative Association Karyn Sper, Fannie Mae David Springe, National Association of State Utility Consumer Advocates Mary Templeton, Michigan Saves Mark Thielking, Energy Improvement Corporation / Energize NY Jennifer Weiss, Duke University, Nicholas Institute for Environmental Policy Solutions Jim Wheaton, Community Investment Corporation Mark Wolfe and Cassandra Lovejoy, Energy Programs Consortium Curtis Wynn, Roanoke Electric Cooperative Gwen Yamamoto, Hawaii Green Infrastructure Authority Greg Zagorski, National Council of State Housing Agencies We appreciate the support and guidance of Bruce Schlein and Bryan Garcia, Co-Chairs of the SEE Action Financing Solutions Working Group, and Johanna Zetterberg and Steve Dunn, U.S. DOE. August 2017 www.seeaction.energy.gov v Disclaimer This document was prepared as an account of work sponsored by the United States Government. While this document is believed to contain correct information, neither the United States Government nor any agency thereof, nor The Regents of the University of California, nor any of their employees, makes any warranty, express or implied, or assumes any legal responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by its trade name, trademark, manufacturer, or otherwise, does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof, or The Regents of the University of California. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof or The Regents of the University of California. Ernest Orlando Lawrence Berkeley National Laboratory is an equal opportunity employer. August 2017 www.seeaction.energy.gov vi Table of Contents Acronyms ............................................................................................................................................................... 1 Executive Summary ............................................................................................................................................... 3 Key Characteristics of LMI Households ................................................................................................................ 3 Housing Vintage, Housing Stock, and Ownership Patterns ........................................................................ 3 Larger Programmatic Context .................................................................................................................... 4 Consumer Protections ................................................................................................................................ 4 Lessons Learned and Options for Leveraging Financing for LMI Households ...................................................... 5 Finance Products and Product Features ..................................................................................................... 5 Stakeholder Coordination and Collaboration ............................................................................................. 7 Data ...................................................................................................................................................... 8 1. Introduction .................................................................................................................................................. 9 2. Definitions, Characteristics, and Program Support for Low- and Moderate-Income Households ................ 11 2.1. Definitions ................................................................................................................................................. 11 2.1.1. Low and Moderate Income ........................................................................................................ 11 2.1.2. Financing .................................................................................................................................... 11 2.1.3. Opportunity, Rationale, and Benefits of Financing for LMI Households .................................... 13 2.2. Characteristics of LMI Customers, Communities, and Borrowers ............................................................ 14 2.2.1. Housing Stock and Vintage ......................................................................................................... 14 2.2.2. Housing Ownership Patterns (Renters vs. Homeowners) .......................................................... 16 2.2.3. Affordable Housing..................................................................................................................... 17 2.2.4. Energy Consumption .................................................................................................................. 18 2.2.5. Consumer Protections ...............................................................................................................
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