Success Stories: What Drives Consumer Borrowing for Energy Efficiency? John M. Hayes, President & COO Peter Krajsa, Chairman and CEO AFC First Financial Corp.

In the current Perfect Storm of Energy Crisis and Credit Contraction, consumers more than ever need simple financing options to make energy improvements Rebates and Tax Credits are great, but most consumers still need a simple, affordable way to pay the balance or else they wont make the improvement, no matter how great the energy savings – affordable financing is key 70% of all Home Improvements up to $15,000 are financed in one way or another, 90% of improvements greater than $15,000 are financed Keep it simple for contractor and consumer – the goal is work performed and energy savings, not the number of audits conducted The Facts About Financing

Financing Programs Should Not Exclude, But Rather Incent Successful programs are Contractor-Driven with a well- trained, financially and ethically stable contractor network authorized to perform the work Tiered Financing Approach accommodates both Reactive and Proactive Consumers Dont exclude the consumer who wants to install an ENERGY STAR or high efficiency improvements but doesnt have time to go through the whole audit protocol But…provide lower interest rate to the consumer who will do the Whole house improvement program Contractors have to buy in to the ease of the program and cant be put off by complexity – need to accommodate their customers Use simple, consumer recognized national standards such as ENERGY STAR for equipment standards – no need to reinvent the wheel or confuse the market

CASE STUDY - Pennsylvanias Keystone HELP ® One of the most successful state sponsored consumer energy efficiency finance programs in the nation 7,000 loans and $50 million funded in three years with rapidly increasing consumer demand (up 150% over last year) A model DOE and EPA program and a principal prototype for the proposed federal Home Star program as it addresses both reactive and proactive energy improvement needs and a key part of the Philadelphia EnergyWorks DOE Grant Based on a pilot started by the West Penn Power Sustainable Energy Fund it has evolved into a unique public-private partnership which leverages loan capital provided by PA Treasury and PHFA with DEP (state energy office) prgoram funds to provide greatest incentives Managed by specialty energy lender AFC First and provided by 1,600 independent Pennsylvania contractors approved to perform work under program

CASE STUDY - Pennsylvanias Keystone HELP ® Loss Reserve/Rate Buydowns PA Department of Environmental Protection (State Energy Office) Core Loan Capital PA Treasury PA Housing Finance Agency Contractor Management/Loan Origination & Servicing AFC First Financial Corp. Approved Contractors Homeowner

Keystone HELP ® Addresses Both Reactive and Proactive FOR THE REACTIVE ENERGY IMPROVEMENT Low Rate Unsecured Loan , 10 Year Term to $15,000 for ENERGY STAR Improvements Lower Rate Unsecured Loan – 5.99, 10 Year Term to $15,000 for Advanced Performance Improvements FOR THE PROACTIVE ENERGY IMPROVEMENT Lowest Rate Loans – 2.99% Unsecured BPI loan emulates Home Star Gold, Secured Loans Up to $35,000 with both BPI and RESNET PA Home Energy Protocol – state HPwES program New Geothermal Loan Program Coming Soon

Over 1,600 Approved Contractors Across State Approved Contractors have been reviewed for financial and ethical stability Trained Contractors are Approved Contractors who have undergone additional training on building science and Whole House energy improvements Certified Contractors are Approved Contractors who have achieved BPI (Building Performance Institute) certification or accreditation. BPI is the nationally recognized designation for building and energy professionals who have undergone rigorous training on Whole House energy improvements.

Whats Needed to Meet Increasing Consumer & Contractor Demand for Financing in Pennsylvania Core Loan Capital Pennsylvania Treasury is at the forefront of creating a national secondary market for energy efficiency loans to create sustainable source of funding Effective Program Management and Contactor Network Already in place, with extremely active loan program and statewide contractor network Bur There is a Big If………..Program Funding Funding of loan loss reserves and rate incentives are a critical piece to sustain and grow the program. Committed seven years of legislative funding under PA energy legislation was eliminated in the budget after year 1. ARRA funding is only a short term solution. The best possible option is utility support (Act 129)

A National Leader in Energy Efficiency Lending Peter Krajsa, Chairman and CEO John Hayes, President and COO Ken Yeager, VP of Business Development Julie Unger, VP of Operations Michael Sanjek, VP of Home Performance and Marketing (888) afcfirst.com energyloan.net keystonehelp.com ctsolarlease.com