Green is the New Black September 29, 2015

Transcription

1 Green is the New Black September 29, 2015 Moderator: Panelist: Panelist: Panelist: Panelist: Evan Seretan, UIL Holdings Corp. Elizabeth Murphy, UIL Holdings Corp. Kim Stevenson, Connecticut Green Bank Cal Vinal, CHIF Enoch Lenge, Eversource

2 Multi-Family Property Energy Efficiency Incentives Elizabeth Murphy, UIL Holdings Corp.

3 Energize Connecticut Energize Connecticut is a statewide branding initiative to help consumers save money and use clean, affordable energy. A partnership of the Energy Efficiency Fund, the Connecticut Green Bank, Department of Energy and Environmental Protection ( DEEP ) and local electric and gas utilities. Efficiency incentive programs funded through the Connecticut Energy Efficiency Fund. Established in 1998 with natural gas programs added in

4 What We Offer Comprehensive energy solutions for market rate and income eligible multi-family properties Financial incentives, rebates, and financing Technical assistance and installation services Owner and tenant education 4

5 Eligible Multi-Family Property Types Any multi-family property with 5+ units Not-for-profit, market rate and income eligible customers, including: Private owners / landlords Housing authorities Housing associations 5

6 Paths to Incentive Program Participation Market rate no tenant income restrictions. Income eligible two-thirds of the property s residents are at or below 60% of the state median income ( SMI ). Subsidized housing (e.g. Section 8) Housing for disabled veterans Housing for elderly Group homes Residential treatment facilities 6

7 Why Energy Efficiency? Reduce energy bills Reduce operations and maintenance costs Improve energy performance Improve tenant comfort Improve tenant satisfaction 7

8 Commonly Incentivized Measures Weatherization: Air sealing / duct sealing Low flow shower heads Faucet aerators Pipe wrap Energy-efficient lighting: Dwelling unit Common area Exterior Add-on Measures: Insulation Windows High efficiency heating equipment Domestic hot water heaters High efficiency control strategies (e.g., ECM pumps, VFD) Appliances Custom measures are evaluated based on opportunities identified within the property. 8

9 Connecticut Green Bank Providing Easy Access to Affordable Capital September 29, 2015

10 Connecticut Green Bank Who We Are 10

11 Multifamily Housing What We Do Help owners save money on energy and operating costs, and improve the living environment for tenants Provide technical assistance and financing 11 11

12 Technical Assistance Financing Solutions CASE STUDY TECHNICAL ASSISTANCE ENERGY LOAN PRE-DEVELOPMENT ENERGY LOAN

13 Project Financing Solutions CHIF LIME LOAN Brian Sullivan MULTIFAMILY CREDIT ENHANCEMENT FUND SOLAR FINANCING

14 Thank You Kim Stevenson Associate Director, Multifamily 845 Brook Street Rocky Hill, CT (860) John R. D Agostino Sr. Manager, Multifamily 845 Brook Street Rocky Hill, CT john.dagostino@ctgreenbank.com (860)

15 Energy Efficiency Retrofit Lending: Affordable Multifamily CT Housing Coalition Cal Vinal

16 Challenges to Multifamily Energy Financing Ownership structures impede financing Barriers to securing mortgages/liens HUD/FHA, CHFA, Housing Authorities - restrictions C-PACE subordination, cost Conventional loan-to-value limits, costs of refinancing Ownership frequently a single-purpose entity Financing Energy Efficiency Retrofits in Affordable Multifamily Lacks strong balance sheet or liquidity Challenge getting syndication approvals Education, coordinated/standard process, marketing Split benefit (tenant pays utility bills)

17 Financing Energy Efficiency Retrofits in Affordable Multifamily Opportunities in Affordable Multi-family Leverage and build off of existing HES-IE resources rebates and processes available; financing can stretch these resources to have greater and broader impact Low-hanging fruit affordable multi-family properties are often much less efficient than market-rate and high-end rental housing, greater ROI High access to natural gas infrastructure - high concentration in urban areas Higher economic impact lower-income households have less disposable income and savings; dollar reduction in energy expenses has more impact and multiplier effect Cost savings to local Housing Authorities Conventional financing not typically possible for HAs, Economic incentive - Property owners to profit from efficiency improvements Facilitate one-stop shopping Develop more standardized approach to standardize approach and maximize overall potential cost effectiveness of multifamily efficiency improvements, and tie financing and centralized usage data gathering

18 Products/Measures/Terms Financing Energy Efficiency Retrofits in Affordable Multifamily Multifamily Energy Loan (MEL/ECL) State-funded program since 1980 (DOH funded) Almost any energy savings measure, mostly replacement 5-30 units - more units with equal per unit energy investment Max $3,500/unit, $100,000/deeded property Soft second, basic underwrite 10-year self-amortizing term 6% (3% if 80% AMI), furnaces/boilers 0% Any ownership/borrower structure Works well with HES Income-Eligible

19 Products/Measures/Terms Low Income Multifamily Energy (LIME) Loan C-PACE alternative, all measures including Solar, Health/Safety 5+ units, targeting 60% affordable at 80% AMI, restricted & natural Unsecured - No lien/priority or LTV issues, seek guaranty Borrower - Single-purpose entity owner or sponsor/mgt company Energy Saving Coverage Ratio :1 target (75%) Financing Energy Efficiency Retrofits in Affordable Multifamily ESCR buffer for pricing, behavior, optimization issues Net Energy Savings (NES) determines improvements/loan size/term 6% rate, 2% fee plus third-party cost, up to 20 year term No borrower out of pocket if costs funded under ESCR Seek comprehensive measures, Solar has different term and ESCR Smaller LIME loans for limited measures (Easy, Mini) Immediate property value increase, owner shares mezz NOI Leverages eligible rebates (including Income Eligible - IE)

20 Financing Energy Efficiency Retrofits in Affordable Multifamily For more information on LIME Loans: Brian Sullivan , Ext

21 New Construction or Existing Buildings: How to participate Presented by: Enoch Lenge, Eversource

22 Two Multi-family Paths 1. Residential New Construction ( RNC ) Ground up new construction Redevelopment Gut rehabs 2. Existing Building Multi-family Moderate rehab Capital improvements Targeted energy upgrades 22

23 Residential New Construction Program Multi-family Project Process Flow Kick-off meeting during design phase Copy of blueprints submitted to utility Utility reviews blueprints for qualifying measures Additional information requested from architect or engineer Utility creates RNC incentive application which earmarks incentive to the project Inspections done by HERS rater or utility staff Project can be paid out in phases 23

24 Why Third-Party Verification? Energy consultant HERS Raters Blower door & duct blaster 24

25 Case Study: Chamberlain Heights Redevelopment Meriden, CT Project details: Townhouse style buildings 124 Units (natural gas) Low Income Bonus Incentive MEASURES ENERGY STAR Certification High Performance Insulation & Air Sealing AS BUILT Applicant $1, x 124 = $209,250 (HERS 59) Incentive Amount 168,575 sqft x $0.75 = $126,431 Rater $165 ENERGY STAR HVAC Central A/C, Heat Pump, Ductless Split Heat Pumps ENERGY STAR Certified Hot Water Heater Incentive Amount $250 Central A/C + $500 Furnaces= $750x 124 =$93,000 Incentive Amount $450 x 124 = $55,800 Natural gas tankless per unit incentive = $3,907 ACTUAL TOTAL $484,

26 Existing Multi-family Building Process Energy assessment and/or Proposal Utility Letter of Agreement Energy Efficient Measures installed Inspection & Payment

27 Case Study: Heritage Glen CNG and Eversource Electric Income Eligible 5 buildings, 68 units CHFA funded improvements Natural gas heat and DHW central meter Measure Installed Cost Incentive Annual Savings (kwh) Annual Savings (ccf) Air sealing $ 72,916 $ 69,106 1,102 7,795 DHW measures $ 1,034 $ 1, Dwelling unit lighting $ 1,285 $ 1,285 7,874 Duct sealing $ 25,869 $ 25,869 17,427 High-efficiency furnaces $ 118,000 $ 26,793 2,679 ECM motors $ 13,940 $ 13,940 26,180 Air conditioning units $ 70,231 $ 46,119 17,243 Attic insulation $ 20,884 $ 14, Total $ 324,159 $ 198,416 69,993 11,255

28 Questions? Enoch Lenge Eversource Multifamily Program Lead Elizabeth Murphy The United Illuminating Co. Senior Program Administrator

29 Take action now! EnergizeCT.com 877-WISE-USE 29

30 Q & A