FINANCING OPTIONS FOR HOME ENERGY IMPROVEMENTS. See how you can save more than you spend when you invest in energy efficiency

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1 FINANCING OPTIONS FOR HOME ENERGY IMPROVEMENTS See how you can save more than you spend when you invest in energy efficiency

2 FINANCING FOR HOME IMPROVEMENTS Pull up a chair and make yourself comfortable. What would it take to do the same for your house? Better insulation? A more efficient furnace? Properly sealed windows and doors? Efficiency Vermont can help make it happen without breaking the bank. New financing options and incentives make it possible for the average homeowner to reap the benefits of maximum energy efficiency. Saving money is a powerful motivator. And when you know you re saving money, energy and the environment, it s a perfect trifecta of savings. See how your annual energy savings can offset the cost of a loan payment. We call that "positive cash flow". Home Equity Loan AFTER LOAN IS PAID OFF WHAT IS PACE FINANCING? Property Assessed Clean Energy (PACE) is a method of financing home energy improvements through your town. Interested property owners, in towns with designated PACE districts, are eligible to receive financing for energy efficiency improvements, repaid to their towns as a property tax assessment for up to 20 years. BENEFITS OF PACE PACE helps homeowners overcome financial barriers to making energy efficiency improvements by allowing financing to be linked to the property, rather than the current resident. This helps homeowners make an investment that will serve them in the near-term and serve future residents of the home through lower energy bills and improved comfort. Traditional financing mechanisms may deter homeowners who are considering moving in the future and may not realize the full pay-back of their efficiency improvements before selling their home. LOAN PAYMENTS TERM OF LOAN WONDERING IF PACE IS FIND OUT BY VISITING PACE HOME EQUITY LOAN ENERGY YOUR PAYMENTS WILL END BUT YOUR CONTINUE Do you have additional questions? Contact Efficiency Vermont at or PACE@EfficiencyVermont.com

3 7-Year Personal Loan WHAT IS IT? A personal loan is generally an unsecured loan based solely on the borrower s credit. It often has higher interest rates in this case, 7.5 percent but will be paid off quickly. WHEN IS IT A GOOD IDEA? If you have the cash flow and motivation to pay off your loan quickly, a personal loan is a good choice. However, since home energy improvements are an investment that yields greater benefits over time, paying the loan off quickly means that positive cash flow or your net energy savings will be less per month than for a longer-term loan. CASE STUDY 1: Rob Nichols Energy Challenge: A drafty 1980s modified saltbox in Moretown with a chilly basement and an oil-eating furnace even while burning the wood stove. The Proposed Solution: Add insulation to the attic and the roof frame bays;; seal all air passages from the living space;; insulate basement sills and walls. The Result: A uniformly comfortable house with air leakage reduced by 48 percent. Potential Financing Scenario: The 7-Year Personal Loan TOTAL PROJECT COST $7,622 EFFICIENCY VERMONT INCENTIVE $2,900 TOTAL CUSTOMER COST $4,722 I m now using 79% less fuel. I ve recommended this work to all of my neighbors. Robert Nichols Moretown, VT Here s what a 7-year-loan would look for Rob Nichols, factoring in incentives from Efficiency Vermont: TOTAL AMOUNT BORROWED $4,722 at 7.5% TOTAL COST TO HOMEOWNER $6,084 COST TO HOMEOWNER ESTIMATED ENERGY NET $869/year $924/year $55/year $55 ANNUAL

4 15-Year Home Equity Loan WHAT IS IT? A home equity loan can help homeowners like Phyllis Severance enjoy relatively low interest rates spread out over a longer period of time. WHEN IS IT A GOOD IDEA? If you re concerned about minimizing financial risk, this loan is a good option, as many homeowners can offset the relatively low cost of the monthly payment plans with money made available by energy savings. CASE STUDY 2: Phyllis Severance Energy Challenge: An 1840 Colonial in Williston with plenty of historical charm, but with a poorly insulated attic that sent Severance s heating costs through the roof. The Proposed Solution: Seal and insulate the basement;; re-insulate the attic;; air-seal the entire house. The Result: A snug, well-insulated house with a 37 percent reduction in air leakage, which significantly reduced Severance s energy bills. Potential Financing Scenario: The 15-Year Personal Loan TOTAL PROJECT COST $5,932 EFFICIENCY VERMONT INCENTIVE $680 TOTAL CUSTOMER COST $5,252 Here s what a 15-year-home equity loan would look for Phyllis Severance, factoring in incentives from Efficiency Vermont: TOTAL AMOUNT BORROWED $5,252 at 5.25% The entire house is so much warmer in the winter. Savings on gas and electric were huge in the first year alone. Phyllis Severance Williston, VT TOTAL COST TO HOMEOWNER $7,599 COST TO HOMEOWNER ESTIMATED ENERGY NET $507/year $640/year $133/year $133 ANNUAL

5 30-Year Mortgage WHAT IS IT? The Mellingers could have financed their energy renovations with a 30-year mortgage, which would place a lien on their home but would require paying only a modest interest rate 4 percent, in this case. WHEN IS IT A GOOD IDEA? Financing a major energy project like the Mellingers through a 30-year mortgage is often a good idea, as estimated energy savings would more than cover the cost of the loan payments. This is a good option for homeowners who prefer a longer-term loan with predictable, moderate payments. CASE STUDY 3: The Mellingers Energy Challenge: Ice dams and icicles built up on the roof of this 20-year-old cape, while warm air leaked out from the basement. The Proposed Solution: Air sealing throughout the house and particularly in the basement;; blown-in insulation in knee-wall and attic areas;; boiler replacement. The Result: No evidence of ice dams or roof leaks, plus a better-insulated, more comfortable house. Potential Financing Scenario: A 30-Year Mortgage TOTAL PROJECT COST $11,505 EFFICIENCY VERMONT AND OTHER INCENTIVES $3,847 TOTAL CUSTOMER COST $7,658 We re definitely glad we did it. Not a single ice dam this past winter! Dan Mellinger Here s how a 30-year mortgage would help families like the Mellingers, factoring in incentives from Efficiency Vermont: TOTAL AMOUNT BORROWED $7,658 at 4.75% TOTAL COST TO HOMEOWNER $9,867 COST TO HOMEOWNER ESTIMATED ENERGY NET $329/year $628/year $299/year $299 ANNUAL

6 Vermont Banks Offering Home Energy Loans The listed banks offer either energy loans, or standard home equity or personal loans that can be used for energy efficiency The list is not comprehensive, and Efficiency Vermont will add additional lenders and loan products as information becomes available. For a full listing of Vermont banks, visit: Financial Institution Brattleboro/ Springfield Savings and Loan Other Requirements/Information Website National Bank of Middlebury The Green Advantage loan offers reduced rate financing and increased borrowing limits for energy efficiency and renewable energy projects. Northfield Savings Bank Northfield Savings Bank offers reduced-rate financing for energy efficiency projects and recommends working with a BPI-certified contractor. People's United Bank TD Bank Union Bank GreenLend offers reduced-rate financing for projects that contain energy efficiency or renewable energy enhancements that lower the costs of energy use. last Updated: 1/10/2013. Loan products and rates are subject to change without notice. Vermont Credit Unions Offering Home Energy Loans Credit unions provide financial services to their members, and have regional or affiliation requirements for membership. The listed credit unions offer either energy loans, or standard home equity or personal loans that can be used for energy efficiency The list is not comprehensive, and Efficiency Vermont will add additional lenders and loan products as information becomes available. For a full listing of Vermont credit unions, visit: Financial Institution Green Mountain Credit Union Other Requirements/Information Energy Improvement Loans offer reduced-rate financing for energy efficiency and renewable energy projects. Website Members Advantage Community Credit Union This Energy Loan Plus is for purchases that support energy efficiencies in a home. Such as: Pellet stoves, wood stoves, furnaces, insulation, water heaters, solar panels, and other energy efficient equipment or upgrades. NeighborWorks of Western Vermont The NeighborWorks Energy Loan offers a reduced interest rate and an extended term for energy improvements to all borrowers, regardless of income. Loan amounts are determined based on a home energy check-up (audit). New England Federal Credit Union (NEFCU) Opportunities Credit Union Vermont Federal Credit Union Home improvement loans can be used for energy The Freedom Home Loan offers reduced-rate financing for qualifying projects, including energy efficiency Vermont State Employees Credit Union (VSECU) VGreen provides a suite of reduced-rate financing options for home energy improvements and other energy-saving projects, purchases, and goals. last Updated: 7/10/2013. Loan products and rates are subject to change without notice efficiencyvermont.com