Financing Your Weatherization Projects The Institute for Energy & Sustainability Weatherization Roundtable September 13, 2010 Sam Nutter N.E. Business Development Director Conservation Services Group

Mass Save Statewide “brand” for energy efficiency Home Energy Services (1 – 4 units) –“FREE” home energy audits (utility funded) –Fully subsidized air sealing (if cost effective) –Weatherization rebates up to 75% of cost Capped at $2,000 –Heating, water heating, & A/C rebates Rebates vary with equipment: $25 - $1,600 “But how do I pay for the balance?”

Tax Credits, etc. Federal Income Tax Credit –30% of cost up to maximum credit of $1,500 –Expires December 31, 2010 –Insulation, HVAC, water heaters are eligible Home Star –Proposed federal legislation –If approved, would expand federal funding “But how do I get the up front cash?”

Weatherization Project Financing Cash / savings Credit cards Personal loans Home equity loans Mass Save HEAT Loan Potential new options

Mass Save HEAT Loan “HEAT” = The Heating Energy Assistance and Tax Relief Act, Chapter 140 of the Acts of 2005 –Amended in the Green Communities Act of 2009 The HEAT Loans are subsidized by: –National Grid Electric –NSTAR Electric –Western Massachusetts Electric –Cape Light Compact –Unitil N/A in municipal light department towns –Applicant must be a customer of a sponsor utility

Who is Eligible to Apply for a HEAT Loan? The customer must: Be an occupying owner of a 1 to 4 family residence served by one of the sponsors Have completed a Home Energy Assessment (energy audit) through the Mass Save Program Have received a HEAT Loan Authorization Form Have submitted proposals for eligible energy efficiency improvements

What are the HEAT Loan Features? 0% interest Loan amounts from $2,000 to $15,000 Terms up to 7 years No pre-payment penalty Can be used for any eligible improvement –Thermal shell: insulation, air sealing, etc. –HVAC: heating, A/C, hot water, etc.

Participating HEAT Loan Lenders Current list at About 20 local banks and credit unions –7 of these serve Central Massachusetts –Several offer service statewide Secured and unsecured options –Some have application or recording fees Applicant must be approved by bank –Credit scores, existing debt, etc. evaluated

How Much Can Be Borrowed? Total cost of all eligible improvements –You should bundle multiple projects together Minus the amount of the utility rebates –Note: Not all improvements that are eligible for the HEAT Loan are eligible for rebates Plus the recording fee, if applicable Minimum loan amount = $2,000 Maximum loan amount = $15,000 Only one HEAT Loan per customer!

What Are the Steps? 1.Schedule your Mass Save energy assessment — Ask your energy assessor about the HEAT Loan — Have the auditor provide the Program forms 2.Obtain pre-approval from a participating Heat Loan vendor 3.Obtain written quotes from contractors 4.Choose your contractor & submit paperwork to Lead Vendor for eligibility review & processing 5.Receive eligibility verification and the two-party check from Lead Vendor 6.Schedule the work with your contractor(s) 7.Notify Lead Vendor for post-installation inspection

Example # 1 Attic & wall insulation project Estimated annual savings $815 $5,134 full cost before rebate $2,000 rebate $3,134 financed for 7 years $37 monthly payment $68 average monthly savings $31 per month positive cash flow!

Example # 2 Wall insulation + windows project Estimated annual savings $551 $11,106 full cost before rebate $2,000 rebate (no rebate on windows) $9,106 financed for 7 years $108 monthly payment $46 average monthly savings Note: If it was recommended, insulation work must be completed in conjunction with any window work financed by HEAT Loans.

Example # 3 Wall insulation, windows, & new gas boiler Estimated annual savings $1,493 $11,399 full cost before rebate $3,600 rebate $7,799 financed for 7 years $93 monthly payment $124 average monthly savings $31 per month positive cash flow!

Potential Future Finance Options PACE (Property Assessed Clean Energy) –Borrow from municipality; pay back on tax bill –Requires municipal approval, bonding, etc. –Legal issues with Fannie Mae & Freddie Mac On Bill Repayment –Borrow from a special loan fund –Approval based on utility bill payment history –Statement included on utility bill –Payments made along with utility payments

Questions? Thank you! Sam Nutter