PACE Program Management. John Maslowski Vice President, Market Development

Transcription

1 PACE Program Management John Maslowski Vice President, Market Development

2 The Power of PACE 2

3 The Power of PACE A Lawrence Berkley National Laboratory (LBNL) report released in 2016 titled, Energy Efficiency Program Financing: Where it comes from, where it goes, and how it gets there, found that PACE financing is leading the way in residential energy efficiency loan volume noting: a handful of programs drive a very large fraction of total residential energy efficiency loan volume. The two largest programs the California HERO PACE program and the Mass Save HEAT Loan program (zero percent financing) account for 46% of the total capital loaned. The LBNL report was based on 2014 data. From 2011 to 2014, the HERO program originated $400 million in financing. Since then, HERO has originated an additional $1.7 billion. PACE, because it does not require government funds, has the ability to scale to meet demands in a way that is unparalleled by publicly or rate-payer financed efficiency loan programs Renovate America, Inc. All Rights Reserved. 12/4/17 3

4 Property Assessed Clean Energy (PACE) Financing Property Assessed Clean Energy (PACE) financing is designed to make payments affordable by offering a fixed interest rate payable over an extended period of time as an assessment on property tax bill. PACE Overview: New way to pay for home energy efficiency and renewable upgrades Created in partnership with local governments PACE is recorded on title as a voluntary tax assessment, as a line item on property tax bill The PACE assessment is attached to the property, not the homeowner s credit 2017 Renovate America, Inc. All Rights Reserved. 12/4/17 4

5 How does Residential PACE Work? 1. State legislation grants authority to local governments to establish PACE programs Local government authorized to place charge on property to repay financing for energy-efficient and renewable-energy improvements 2. Local Governments either create a Residential PACE program or join a statewide or other district May authorize private Residential PACE providers to operate in their jurisdiction 3. Homeowners apply for, and if qualified, receive Residential PACE financing to install eligible improvements to their home 4. Property owners repay Residential PACE financing through their property tax bill 2017 Renovate America, Inc. All Rights Reserved. 12/4/17 5

6 PACE Administration Issuer PACE ADMINISTRATOR Municipality Treasurer/Tax Collector Contractor Homeowner Selects PACE Administrator(s) and provides program oversight Works with local governments to adopt programs Adopts PACE program by local resolution Collects PACE assessments Works with homeowner and PACE Administrator to select and install eligible products Enters into contract with Issuer for financing Creates standards for PACE administrators, contractors, and underwriting Develops network of contractors Repays issuer financing through PACE assessment imposed and collected on property tax bill Receives regular program reports Oversees application process Works with PACE Administrator on ongoing compliance Pays contractor after project completion Works with tax collectors on PACE assessment collection 2017 Renovate America, Inc. All Rights Reserved. 12/4/17 6

7 PACE Responsibilities Issuer PACE ADMINISTRATOR Contractor Homeowner Adopts consumer protection requirements, e.g. PACENation Standards Implements underwriting requirements and consumer protections Installs products that are certified as energy efficient Signs a Completion Certificate before the contractor is paid Creates standards for PACE administrators, contractors, and underwriting Receives regular program reports Oversees pricing review and confirms terms of financing through live call with property owner Property owner must also receive disclosure form modeled on Know Before You Owe and a 3 day right to cancel form Must be licensed, bonded, and insured Must abide by business practice and marketing guidelines Works with PACE Administrator on ongoing compliance Additional protections for seniors Provide dispute resolution, selling and refinance support for homeowner Ensures contractors satisfy program requirements, e.g. licensing, eligible products, and required permitting 2017 Renovate America, Inc. All Rights Reserved. 12/4/17 7

8 Why Do Governments Choose PACE? Public-Private Partnership a real need Challenges at local, state and federal levels becoming more complex, nuanced Public dollars no longer the solution Governments accountable to show real results in real time Public sector looking for partners who: Offer infrastructure Create efficiencies and are resource multipliers Are committed to upholding the public trust Providing options for your constituents is good public policy 2017 Renovate America, Inc. All Rights Reserved. 12/4/17 8

9 How Renovate America s HERO Program Compares to Competitive Products HELOC UNSECURED CREDIT Single Purpose Financing x Fixed Rate and Fully Amortizing Pricing Review x x 100% Confirmation of Terms Via Live Phone Call x x Enhanced Disclosure x x Right to Void HERO Financing x Funding Provided Only Upon Completion Of Project and Homeowner Certification x Contractor Requirements x Pre- and Post-Funding Customer Support x Senior Care x x Yes Sometimes x No 2017 Renovate America, Inc. All Rights Reserved. 12/4/17 9

10 Example: The County of Los Angeles Economic Impact Homes Improved 24,000+ Jobs Created 5,898 Amount Funded $695M Economic Stimulus $1.2B Environmental Impact 1 Energy Saved (k-wh-e) 3.23B Emissions Reduced (ton) 823K Water Saved (gal) 2.85B 1) Impacts are projections based on lifetime of installed products *Based on HERO data as of 12/1/17 PACE is an important policy tool for helping the County achieve the goals of their Community Climate Action Plan (CCAP) The CCAP holds the County accountable to delivering on California s mandate to achieve 1990 GHG emissions levels by 2020 Contributes to a growing and healthy local economy by creating new jobs that can t be outsourced 2017 Renovate America, Inc. All Rights Reserved. 12/4/17 10

11 PACE National Landscape California, Florida, and Missouri have all launched statewide residential PACE programs. The opportunity for economic development is even greater for residential PACE. As of Q3 2016, there are nearly 133 times more Residential PACE projects than Commercial PACE projects nationally. Residential PACE $4.2 Billion in Funded Projects 170,000 Projects 34,500 Jobs Created Commercial PACE $493 Million in Funded Projects 1,097 Projects 7,395 Jobs Created Source: PACENation as of December Renovate America, Inc. All Rights Reserved. 12/4/17 11

12 Consumer Protections & Best Practices California Legislation: S.B. 242 & A.B

13 New Consumer Protection Framework for PACE Two key CA laws passed in 2017 to strengthen PACE through enhanced consumer protections and regulation: A.B S.B. 242 What does this legislation mean for PACE? Greater protections for homeowners to help ensure that PACE is right for them Stronger oversight and rules for contractors While Renovate America already operates with a number of the consumer protection requirements, now all PACE providers will be required to abide by same rules and regulations More transparency for government partners Serve as model consumer protection legislation for other states 2017 Renovate America, Inc. All Rights Reserved. 12/4/17 13

14 Key Elements New financing approval standard based on ability to pay Enhanced disclosures and other protections for homeowners State regulatory oversight by the Department of Business Oversight in California Increased contractor oversight and rules around contractor management Data reporting requirements * Sample foot note here Renovate America, Inc. All Rights Reserved. 12/4/17 14

15 New Financing Approval Standards New income-based underwriting standards will assess homeowner s ability to pay. PACE providers must: Collect homeowner s income Verify income prior to funding Determine ability to pay based on homeowner s income as sufficient for PACE costs, including all interest and fees Ensure homeowner is in good standing, e.g. current on property tax, mortgage debt, no bankruptcy in last 7 years Financing is for less than 15% of the value of property Standardized method to assess home values 2017 Renovate America, Inc. All Rights Reserved. 12/4/17 15

16 Enhanced Disclosures The legislation builds on California s A.B. 2693, passed in 2016, which included enhanced written Know Before You Owe disclosures: Recorded confirmed terms calls which covers key financing terms, obligations, and risks Translation available in five major non-english languages (for call and contractual documents) Three-day right to cancel provision (emergency exception waiver available) Right to cancel provision linked to canceling financing for home improvement contract 2017 Renovate America, Inc. All Rights Reserved. 12/4/17 16

17 Contractor Oversight and Requirements Required training program for all contractors offering PACE financing Contractors must be licensed by CSLB and enrolled with a PACE administrator Contractors cannot know upfront equity or estimated approval amount for a homeowner Contractors cannot quote different price for PACE project than if paid in cash Contractor payment limited to project price Additional anti-kickback provisions 2017 Renovate America, Inc. All Rights Reserved. 12/4/17 17

18 State Regulatory Oversight Department of Business Oversight (DBO) will now have oversight for all PACE providers and enforcement authority over contractors in California: All PACE providers must be licensed by DBO Broad examination, investigation, and enforcement powers May act upon homeowner complaints May hold PACE program administrator accountable for program administrator and contractor violations Can revoke a PACE provider s license and issue citations, revoke license Can suspend and bar contractors from offering PACE Funding for DBO s oversight come from pro rata contribution by industry 2017 Renovate America, Inc. All Rights Reserved. 12/4/17 18

19 Data Reporting Requirements Bi-annual reporting of PACE program impacts to DBO and local government partners, including: Number, amounts and locations of PACE assessments Tracking of products installed by category, number and dollar amount Estimated energy and water savings, renewable energy production, carbon reductions, and jobs created 2017 Renovate America, Inc. All Rights Reserved. 12/4/17 19

20 John Maslowski Vice President, Market Development