Loans for One and All Examining the Equity of Energy Efficiency Financing in Rhode Island

Transcription

1 Loans for One and All Examining the Equity of Energy Efficiency Financing in Rhode Island Joe Van Clock Research Into Action Rachel Henschel National Grid

2 Why focus on equity of EE financing? Opportunity: Energy upgrades in middle income households Problem: High up-front costs Potential Solution: Financing Loans for One and All September 14, 2017 pg. 2

3 What can we learn from one program, in Rhode Island, about whether financing is an effective tool to reach middle income homeowners?

4 National Grid Rhode Island HEAT Loan Amounts up to $25,000 Terms up to 7 years 0% interest Available through 6 lenders, including one nonprofit lender Eligible measures: Heating systems Domestic hot water systems Weatherization Incentives available for all eligible measures Must have home energy audit Loans for One and All September 14, 2017 pg. 4

5 Four Data Sources Program Tracking Data 3,925 project records December 2012 May 2016 Participant Survey 352 participants of 9,879 receiving audits from July 2015 June 2016 Lender Interviews All 6 HEAT Loan lenders Auditor Interviews 10 of 16 auditors Loans for One and All September 14, 2017 pg. 5

6 Do loans help people overcome the challenge of paying the first costs of energy upgrades?

7 HEAT Loans Enabled Larger Projects Assessors: 9 of 10 confident loans allowed for more and larger projects Survey Respondents: 80% reported availability of loan was important in decision to make improvements Program Data: HEAT Loan projects 27% larger than projects not using loans Loans for One and All September 14, 2017 pg. 7

8 Lower Income Participants Benefit Most from Loans $100k+* (n=24) 8% 21% 58% 13% $50k - $100k* (n=40) 18% 35% 20% 28% < $20k - $50k* (n=14) 36% 14% 36% 14% 0% 100% Action Taken If Loan Was Not Available Not done project at all Done smaller/less expensive project Delayed project Done exactly same project Loans for One and All September 14, 2017 pg. 8

9 Can people who need loans get them?

10 Approval Rates Were Relatively High Lenders: 84% overall approval, based on combined estimates, weighted by loan volume Survey Respondents: 0 Reported loan application denied 3% did not apply because did not believe they would qualify Program Data: ~70% of applications result in complete loans; not all the rest are denied Loans for One and All September 14, 2017 pg. 10

11 How to Assess Income Distribution w/o Direct Data Census Block Group analysis 813 Block Groups in Rhode Island 5 to 1,512 households in each, average ~500 Loans for One and All September 14, 2017 pg. 11

12 Incomes Vary Within Groups But A Trend Is Clear Median Income of Census Block Group Highest 25% 9% 14% 14% 16% 13% 10% 23% 51st to 75th Percentile 15% 19% 21% 16% 11% 6% 11% 26th to 50th Percentile 24% 26% 19% 12% 7% 5% 6% Lowest 25% 44% 27% 12% 7% 4% 2% 3% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Proportion of Households Reporting Incomes in Range Less than $25,000 $25,000 to $49,999 $50,000 to $74,999 $75,000 to $99,999 $100,000 to $124,999 $125,000 to $149,999 $150,000 or more *Data from American Community Survey five-year estimates for Loans for One and All September 14, 2017 pg. 12

13 HEAT Loan Recipient Block Groups Parallel RI Homeowners HEAT Loan Recipients (n=2,707) 10% 22% 31% 37% All RI Owner-Occupied Homes* 12% 21% 31% 36% Median Income of Census Block Group Lowest 25% ($7,816 to $39,374.99) 26th to 50th Percentile ($39,375 to $56,249.99) 51st to 75th Percentile ($56,250 to $75,864.99) Highest 25% ($75,865 to $178,438) *Data from American Community Survey five-year estimates for Loans for One and All September 14, 2017 pg. 13

14 Applicants Without Loans Came From Lower Income Groups Applicants Who Did Not Receive Loans (n=748) 18% 29% 28% 25% All RI Owner-Occupied Homes* 12% 21% 31% 36% Median Income of Census Block Group Lowest 25% ($7,816 to $39,374.99) 26th to 50th Percentile ($39,375 to $56,249.99) 51st to 75th Percentile ($56,250 to $75,864.99) Highest 25% ($75,865 to $178,438) *Data from American Community Survey five-year estimates for Loans for One and All September 14, 2017 pg. 14

15 Projects Without Loans Came From Higher Income Groups Completed Weatherization w/o HEAT Loan (n=1605) 8% 21% 29% 41% All RI Owner-Occupied Homes* 12% 21% 31% 36% Median Income of Census Block Group Lowest 25% ($7,816 to $39,374.99) 26th to 50th Percentile ($39,375 to $56,249.99) 51st to 75th Percentile ($56,250 to $75,864.99) Highest 25% ($75,865 to $178,438) *Data from American Community Survey five-year estimates for Loans for One and All September 14, 2017 pg. 15

16 These Findings Are Consistent With Survey Responses 100% 46% 42% 39% 22% 27% 27% 32% 31% 34% 0% Audit Only Weatherization Only Weatherization with Loan Under $50,000 $50,000 to under $100,000 $100,000 or more Loans for One and All September 14, 2017 pg. 16

17 Are loans a viable tool to bring energy upgrades to middle income households?

18 Yes, Loans Help Middle Income Households Make Upgrades Financing made a difference in the types of projects people were able to complete Homeowners across Census block groups were able to access financing But there may be additional opportunity to serve middle income households Loans for One and All September 14, 2017 pg. 18

19 Questions Contact: Joe Van Clock