Webinar: SBA Green Public Policy Goals, hosted by Colorado Lending Source

Join our Webinar April 30th: SBA Green Public Policy Goals hosted by Colorado Lending Source. The SBA 504 loan program is one of the few consistent sources of capital for real estate construction and acquisition projects today. Recent changes to the program have enabled borrowers to unlock project capital at a rate that was previously impossible. Join us as we learn about the renewable energy and reduction options available to borrowers.

Date: April 30th, 2015
Time: 10:00am PST
Duration: Approximately 45mins
Content Level: Intermediate (basic knowledge of the SBA 504 program is helpful)

Agenda:

  • Introduction to the SBA 504 public policy goals
  • Benefits and challenges borrowers face
  • The right path for you: energy reduction or renewable energy?
  • Eligibility requirements
  • Sample projects

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Register here.


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HERS II Rating System used to qualify for California TCAC and CDLAC, low income tax credits and private debt.

Affordable housing sponsors and developers seeking to utilize tax credits or private activity bonds through California Tax Credit Allocation Committee (CTCAC) and the California Debt Limit Allocation Committee (CDLAC), respectively, for rehabilitation projects must reduce the projects’ energy consumption. 

The energy reduction must be documented by submitting the California Energy Commission HERS II energy consumption and analysis report, developed using the Home Energy Retrofit Coordinating Committee’s multifamily protocol, which shows the pre- and post- rehabilitation HERS II estimated annual energy use demonstrating the required improvement and is signed by a qualified HERS Rater.

All rehabilitation projects must demonstrate a 10% minimum reduction in HERS II annual energy use.  For competitive situations, additional “points” may be obtained by further reduction in the HERS II rating or if the projects do the following:

  • Utilize renewable energy
  • Utilize sustainable building practices including maintenance manual development, building management staff training, and building system commissioning
  • Project sub meters or individually meters the gas, electricity, or central hot water system

EIA Sees Energy Efficiency Slowing U.S. Energy Consumption

According to EERE, Increased energy efficiency will contribute to a slowing of the annual growth rate of U.S. energy consumption from 2012 to 2035, expanding at an average annual rate of 0.3%, according to a new study from the U.S. Energy Information Administration (EIA). The agency recently released its Annual Energy Outlook 2012, which includes both a reference case and 29 alternative cases. By comparision to the lower projections, the U.S. growth rate of energy consumption was 1.8% in 2005. In the reference case, the share of U.S. energy generation from renewables is projected to grow from 10% to 15%. The report describes how different assumptions regarding market, policy, and technology drivers affect energy production, consumption, technology, and market trends.

According to the report, the slowdown in the rate of growth in energy usage reflects increasing energy efficiency in end-use applications, among other things. In one basic scenario, EIA estimates the overall U.S. energy consumption will expand at an average annual rate of 0.3% through 2035. During this period, the United States won’t return to the levels of energy demand growth experienced in the 20 years prior to the 2008-2009 recession. The authors cite existing federal and state energy requirements and incentives as playing a continuing role in more efficient technologies. Additionally, new federal and state policies could lead to further reductions in energy consumption. The document also examines the potential impact of technology change and the proposed vehicle fuel efficiency standards on energy consumption.

Click here for the complete report.

Forbes’ Take On What is Holding Back The Growth of Solar Power…

May 24th 2012: Yesterday, Justin Gerdes, a contributor for Forbes magazine, wrote a piece that breaks down what he believes is holding back the growth of Solar Power.

Please take a moment and read this very informative and insightful article:

Solar Power More Competitive Than Decision-Makers Or Consumers Realize

Michael Charles Tobias, Contributon

Are the decision-makers entrusted with determining the future of energy infrastructure operating under an outdated understanding of the cost-competitiveness of solar power? In many cases, the answer is yes, according to a paper released last week by Bloomberg New Energy Finance (BNEF).

In “Reconsidering the Economics of Photovoltaic Power,” (PDF) BNEF CEO Michael Liebreich and nine collaborators document the precipitous decline in the price of solar power since 2009. “Average PV module prices have fallen by nearly 75% in the past three years,” they write, “to the point where solar power is now competitive with daytime retail power prices in a number of countries.”

Those facts so quickly upended what had been conventional wisdom (i.e., solar power is prohibitively expensive) that the new economics of solar power apparently caught decision-makers flat-footed. Here are the authors’ conclusions:

• The shift in prices of solar technology carries major implications for policy and investment decision-makers, especially when it comes to the choice of generating technology and the design of tariff, fiscal and other support policies.
Many observers and decision-makers have yet to catch up with the improvements in the economics of solar power that have resulted from recent PV technology cost and price reductions.
Recent reductions in PV prices are likely to be sustainable. While overcapacity has caused severe pain for manufacturers, the price falls are primarily a reflection of reductions in manufacturing costs, not solely a reflection of stock liquidation and other short-run factors.
Commonly used estimates for PV power’s competitiveness – including the concept of “grid parity” – are often misleading, given the complex realities of the electricity system. [emphasis in the above mine]

The aim of the paper, the authors say, is to “inform policy-makers, utility decision-makers, investors and advisory services, in particular in high-growth developing countries, as they weigh the suite of power generation options available to them.” That understated language masks a deadly serious message, with the authors’ words practically shouting from the page: We’re trying to help you prevent the conventional energy infrastructure lock-in that will tip runaway climate change.

Despite the forces arrayed against it – its perceived high cost, the lack of a price on carbon in much of the world, and concerted efforts by cosseted fossil-fuel incumbents to stifle its rise – solar power is booming. “Large drops in solar module prices have helped spur record levels of deployment, which increased 54 percent over the previous year to 28.7 GW in 2011. This is ten times the new build level of 2007,” the paper finds.

A new paper from Bloomberg New Energy Finance argues that solar power is much closer to competitiveness than many policymakers and commentators realize. Credit: DOE/NREL 13739/Arizona Public Service

According to BNEF, the levelized cost of electricity (the cost distributed over a project’s lifetime) for conventional silicon PV declined by nearly 50% from an average of $0.32/kWh in early 2009 to $0.17/kWh in early 2012; thin-film PV dropped from $0.23/kWh to $0.16/kWh over the same period. As of the first quarter of 2012, BNEF pegs the levelized cost range at $0.11/kWh to $0.25/kWh. Residential customers in the United States pay an average retail price for electricity of $0.115 cents/kWh.

The authors contend that if decision-makers understood the new economics of solar, it would hasten the deployment of PV in existing and new markets. “Despite the substantial drop in PV costs,” they write, “many commentators continue to note that PV-generated power is prohibitively expensive unless heavily supported by subsidies or enhanced prices. Outdated numbers are still widely disemminated to governments, regulators and investors.”

Outdated information has led not just to poorly designed and overly generous feed-in tariff (FiT) schemes but to missed opportunities. “If PV power is perceived to be too costly,” write the authors, “governments are less likely to take on the financial burden. This was the case in China in 2010, where the anticipated national PV FiT was dropped because solar PV costs were deemed too high.”

Homeowners overestimate cost of installing solar

If policymakers have not fully grasped the new economics of solar, it should come as no surprise that homeowners are similarly unaware. A Harris Interactive survey released last month found that 97% of homeowners polled overestimated the cost of installing solar; just 3% of respondents knew that the upfront cost to install solar could be less than $1,000, and, in some cases, nothing at all.

To be fair, the survey was self-serving; it was commissioned by California-based solar installer Sunrun, which specializes in little- or no-money-down solar leasing. (The survey was basically an advertisement for Sunrun’s business model.) No matter. Gone are the days when homeowners determined to install solar had to pay $20,000, or considerably more, upfront to buy the panels outright. Forty percent of the Sunrun survey respondents still thought this to be the only option; meanwhile, nearly 8 in 10 said they would install solar if cost were not a factor.

The rapidly falling price of solar panels (combined with state and federal subsidies) has made viable the business model of Sunrun and competitors like SolarCity and Sungevity. The popularity of solar leasing (it now accounts for 75% of the residential solar market in California and more than 80% in Massachusetts) suggests that Americans wanting to switch to clean energy and hedge against rising electricity prices will increasingly choose to install solar.

It’s a shame that bad or incomplete information is holding back the growth of solar power. Those in a position to reach decision-makers and consumers, journalists like myself included, must ensure that the improved economics of solar power becomes the new conventional wisdom.