Financing Sustainable Energy Financing Sustainable Energy

Financing Sustainable EnergyCity of Berkeley

Source of Green House GasEmissions i in Berkeley

City Plans and Policies• General Plan - 15% GHG reduction by 2010between 2000 and 2005 achieved 9% decrease• Measure G - 80% reduction in GHG by 2050• Climate Action PlanTransportation and Land UseBuilding ud Energy egyUseWaste Reduction /Recyclingwww.BerkeleyClimateAction.org

Berkeley Energy ConservationPrograms• Residential and Commercial EnergyConservation Ordinance• Low Income Weatherization Program• Smart Solar Program• Berkeley eey FIRST – solar financing

Berkeley Solar

Solar Goals for 2020Solar PV & thermal to meet 11% of the GHGReduction Goal in Climate Action PlanResidential InstallationsNow: 2.9 mWGoal: 5.3 mWCommercial InstallationsNow: .27 mWGoal: 1.3 mW

Berkeley FIRST Program(Financing Initiative for Renewable Solar Technology)Finance solar and energyefficiency improvements forresidential & commercialpropertiesFinancing model similar to CFDAdditional 20 year Property Taxlevy on participating propertiesto payoff bonded indebtednessof District

Framework for Sustainable EnergyFinancing District• Adopted new Special Tax Financing Lawamended Berkeley Municipal CodeChapter 7.98Incorporates State Law– CA Constitution Article XIIIA Section 4– Mello-Roos Community Facilities ActAlternative ti procedure for forming district i t to allowterritory to consist of parcels to be annexedAlternate procedure for approving bondAlternate procedure for approving bondindebtedness by unanimous consent of propertyowner

Framework for Sustainable EnergyFinancing District• Establish Sustainable Energy FinancingDistrict– Includes method of apportionment for special tax• Adopt Goals and Policies– As required for Mello-Roos• Set Maximum Bonded IndebtednessAuthority to issue bonds up to $80 M forrenewable and energy efficiency improvements

Framework for Sustainable EnergyFinancing District• Levy of Special Taxes on parcels annexed toSpecial Tax DistrictUse of special tax– Payment of principal and interest on bonds– Replenish debt service reserve funds– Payment of costs for administration by City– Costs of collecting and administering i i Tax

Program DesignProperty owner contracts directly with solarinstallerProgram Requirements– California Solar Initiative Rebaterequirement– Compliance with CityResidential/Commercial EnergyConservation Ordinance (RECO/CECO)– Financing provided followingdocumentation of completed installation

Financing i ExampleSolar Project Cost $20,204CSI Rebate (2,342)City Program Cost 463Financed Amount $18,284Interest 7.75%*Annual Tax Payment $ 1,782 / $149 mo.* Based on 10 year Treasury Note –rate fluctuatesuntil locked down

Pilot Program Status• 2008 Initial Pilot Program – issue bondsup to $1.5 M for 38 solar PV installations• Maximum financing is $37,500 perproperty• Application period November 5-19, 2008• 3 projects financed as of April 2009• Participants have 270 days to completeinstallations

Staffing Resources (Operations)City Planning Department1.0 Program Manager.25 Community Service SpecialistFinance DepartmentPrepare Property Tax roll, Issue Payments toProperty Owners, Debt Service ManagementThird Party AdministratorApplications, screening, customer service,verifications and final document preparationOther ConsultantsBond Counsel, Financial Adviser, Fiscal Agent

Lessons Learned• Participant CommitmentSet higher cost of entry without creating barrier toparticipation ii i• Property Tax Revenue TimingTime payments to provide revenue in advance of debtservice obligations• County CoordinationInform Property Tax Administration Departments re:Program details in advance of implementation

Lessons Learned• Develop a schedule for processing bondsand paymentsCoordination and flow among several partners• Up Front and Carrying CostsMost installers require minimum $1,000 deposit and sometimespre-payment for equipment• Periodic Review of Program TermsRemind participants of highlights or pre-financing obligations

Berkeley FIRST Summary of Closing andTransfer ProceduresCategory Actions Responsibility Max TimelineFunding RequestDocument Preparation 1 Property owner requests funding on-line Property Owner NA5 Property owner signs, notarizes and return FIRST documents RF 158 RF delivers documents to City & JH (by PDF) RFBond Closing 9Document Prepartion and Bond Issu 10 Recordation of Notice of Special Tax Lien City 2111 Issue, execution and authentication of Bond by City and FA City, Jones Hall & BNY 2112 Delivery of Bond executed by City and authenticated by FA Jones Hall 2113 Delivery of Bond Counsel Opinion Jones Hall 2116 Delivery of City Closing Certificate City and Jones Hall 2117 Delivery of Fiscal Agent Certificate FA and Jones Hall 2618 Deposit into Reserve Fund City 26Bond Purchase 19 Delivery of RF Closing Certificate RF 2720 Delivery of Request for Authorization to Withdraw Funds RF 2721 Delivery of Purchase Price via wire/check to City RF 2722 Prepare & submit FN024 for check Issuance City 32Check Delivery 23 Delivery of Check to Property Owner City 34

Next Steps• Program Evaluation June – October• Planning for Solar Thermal and EE• Financing• Regional or Statewide Roll out?

Berkeley FIRST Program(Financing Initiative for Renewable Solar Technology)Contact Information:GilFld Gail Feldman, Sustainableti Energy Programs ManagerPlanning Department510-981-7494gfeldman@ci.berkeley.ca.uswww.cityofberkeley.info/sustainable