by Johanna Zetterberg, Coordinator, State and Local Energy Efficiency Action Network
What is one thing most policymakers can agree on? The value of energy efficiency. The State and Local Energy Efficiency Action Network (SEE Action) is a state- and local-led effort facilitated by the DOE and EPA to bring energy efficiency to scale through state and local action. SEE Action is composed of eight working groups that advance recommendations for the design and implementation of state and local energy efficiency policies and programs, based on state and local experience. One of these is the Financing Solutions Working Group, which seeks to increase energy efficiency financing confidence, capital, and convenience.
“SEE Action is an important effort that allows state and local peers to share with each other what works and what doesn’t as they develop strong energy efficiency policies and programs in their communities,” said Dr. Kathleen Hogan, the Deputy Assistant Secretary for Energy Efficiency at the DOE. “By drawing on the wealth of knowledge and variety of perspectives of SEE Action members, the network creates policy guidance that has been trusted by many state and local leaders to inform their own decision making.”
SEE Action’s Financing Solutions Working Group is made up of 30 members from across the country representing state and local governments, financial institutions, associations, business leaders, nongovernmental organizations, efficiency program administrators, and others, and is supported by financing experts at the DOE’s Lawrence Berkeley National Laboratory. Bryan Garcia, President of the Connecticut Green Bank, and Bruce Schlein, Director of Alternative Energy Finance with Citi, serve as co-chairs of the working group. The group convenes regularly to identify policy and market barriers to increased financing for energy efficiency, to develop strategies and new guidance documents, and to plan outreach to the state and local officials who can
“Our working group publishes both introductory information, such as how to use credit enhancement tools to incentivize energy efficiency, as well as more advanced information, like program design considerations for financing efficiency through utility bills. We’ve heard from states that we’re filling a huge gap; energy efficiency financing is a hot area and people want to get up to speed quickly with balanced information that is thorough and well-understood, yet not overwhelming,” said Garcia.
When the working group first got together, it created a work plan to guide its activities. Through this planning process, the group questioned some basic assumptions: Is energy efficiency undervalued by lenders and investors? For which customers is access to attractive capital a key barrier to broader energy efficiency uptake? Are new financing tools and capital sources needed to overcome energy efficiency’s unique barriers, or can existing products be used? And can financing deliver energy savings at a lower cost than other financial incentive strategies?
“We’re always pushing ourselves to ask the tough questions, because it helps us uncover what issues we need to look at—what issues state and local leaders are dealing with where they could use some help,” said Schlein. “And it’s important to us to be very clear about what problems we are trying to solve.”
The group’s focus for the coming year will be how energy efficiency program administrators can aggregate and securitize loan portfolios for sale to the secondary markets. Another focus will be putting forth recommendations for a core set of data fields that financing programs can collect to help program administrators and policy makers improve program design. Through the comparative analysis of data from alternative program designs, lenders and investors can more accurately account for risk, leading to increased lending and, ultimately, lower financing costs.
“The SEE Action Financing Solutions Working Group is unique,” said member Jeff Pitkin, Treasurer of the New York State Energy Research and Development Authority. “It often takes trial and error over time to create policies and programs that work. The insights and experiences shared among the members of the working group are extremely valuable and provide a tremendous resource to tap into as issues arise.”
If you are interested in learning more about the SEE Action Network, contact Network Coordinator Johanna Zetterberg at Johanna.Zetterberg@ee.doe.gov.
Posted on: February 12th, 2015