Draft Criteria for a Comparative Assessment of Energy Efficiency Financing Programs Available in California CAEATFA Working Group Wednesday, April 27, 2016, 9:30 am State Treasurer’s Office, Room 587 915 Capitol Mall Sacramento, CA 95814 Or via Webinar Live captioning is available at: https://www.streamtext.net/player?event=caeatfa Slides and webinar information is available at: http://www.treasurer.ca.gov/caeatfa/workinggroup/index.asp CALIFORNIA ALTERNATIVE ENERGY AND ADVANCED TRANSPORTATION FINANCING AUTHORITY
2 Welcome • In person attendees: • Please sign in or leave a business card • Come to the microphone for questions and comments • Bathrooms: • Men: 3-4-1 • Women: 3-2-5 • In case of emergency please walk down the stairs and meet in Capitol Park across 10 th street • Webinar attendees: Please submit questions through the webinar by “raising” hand • • *This webinar is being recorded and will become a part of the public record*
3 Agenda • Introduction (9:30 – 9:45) • Presentation on Proposed Criteria (9:45 – 10:30) • Background and Perspective • Proposed Criteria • Issues • Prospective Future Criteria: Market Transformation • Diagnostic Information • Open for Clarifying Questions (10:30 – 11:00) • Break (11:00 – 11:15) • Comments on Proposed Criteria (11:15 – 1:15)
4 Introduction • Legislative Directive: Supplemental Report of the 2015-16 Budget Package, Item 0971-001-0528 “ CAEATFA, in consultation with the CPUC, shall also create a working group that will include key stakeholders to develop criteria for a comparative assessment of energy efficiency financing programs available in California, including Property Assessed Clean Energy financing and legacy utility on bill financing for short-term lending. CAEATFA shall publish summaries of the issues discussed with and recommendations made by the working group. Relevant Senate and Assembly policy committee staff shall be invited to observe meetings of the working group .” • Over the past several months, CAEATFA hosted a series of educational workshop featuring presentations from stakeholders on various metrics for evaluating energy efficiency financing Programs.
5 Introduction Today’s Workshop: Meeting of the Working Group to discuss proposed comparative criteria drafted based on previous workshop discussions. Questions to think about: • Did the draft proposal miss any potential comparative criteria? • Should any of the proposed criteria not have been included? • Are there any additional issues or challenges that should be raised regarding the implementation of the proposed comparative criteria?
6 • Introduction • Background and Perspective • Proposed Criteria • Issues • Prospective Future Criteria: Market Transformation • Diagnostic Information
7 Background and Perspective • Enable consistency and comparison • Focus on criteria that are meaningful for all financing programs/products studied, irrespective of individual program goals • Objectives: • Not just to compare performance across programs • Also to understand whether and how programs may complement each other • E.g.: different market segments, project types, customer preferences/profiles • Focus is on criteria, not methodologies for evaluating them • EM&V for financing is under development and may evolve rapidly in the next few years • California financing programs are in different stages of development • Some have no program data to inform any type of evaluation • Criteria intended to lead a discussion about future evaluation
8 • Introduction • Background and Perspective • Proposed Criteria • Issues • Prospective Future Criteria: Market Transformation • Diagnostic Information
9 Criteria/Prospective Criteria/Diagnostics • Proposed criteria are those we suggest using to compare and evaluate program performance. • Prospective criteria are logically appropriate as criteria but more work is necessary before a comparative assessment of financing programs can include them. • Diagnostics yield helpful information for understanding programs and evaluation results, but aren’t appropriate to directly compare performance.
10 • Introduction • Background and Perspective • Proposed Criteria • Issues • Prospective Future Criteria: Market Transformation • Diagnostic Information
11 Proposed Criteria 1. Energy savings attributable to program financing : The reduction in energy usage brought about specifically by the financing offered under each program, but not including savings that would have occurred in the absence of the offered financing. 2. Cost-effectiveness : A comparison of a program’s benefits to its costs. Total net benefits: The dollar value of the energy savings attributable to the financing less the cost of providing those savings . Benefit-cost ratio : The dollar value of the energy savings attributable to the financing divided by the costs of providing those savings. Impacts by market segment/sub-segment 3. Savings, cost- effectiveness, and • Segments/sub-segments reached market penetration • Attributable savings and cost-effectiveness by market segment by market segment and project type Measure and project characteristics • Measure mix by program • Number of measures installed per project • Savings per project Customer satisfaction : Whether customers got what they expected out of the program and were happy with the 4. Customer experience. experience Consumer protection : Whether the program adequately protected participants’ financial interests.
12 Proposed Criteria 1. Energy savings attributable to program financing : The reduction in energy usage brought about specifically by the financing offered under each program, but not including savings that would have occurred in the absence of the offered financing. 2. Cost-effectiveness : A comparison of a program’s benefits to its costs. Total net benefits: The dollar value of the energy savings attributable to the financing less the cost of providing those savings . Benefit-cost ratio : The dollar value of the energy savings attributable to the financing divided by the costs of providing those savings. Impacts by market segment/sub-segment 3. Savings, cost- effectiveness, and • Segments/sub-segments reached market penetration • Attributable savings and cost-effectiveness by market segment by market segment and project type Measure and project characteristics • Measure mix by program • Number of measures installed per project • Savings per project Customer satisfaction : Whether customers got what they expected out of the program and were happy with the 4. Customer experience. experience Consumer protection : Whether the program adequately protected participants’ financial interests.
13 Issues: Energy Savings Attributable to Financing • Importance of Attribution : • Indicates how much each financing product is actually “growing the pie” ( i.e., contributing toward energy savings goals) • Key questions: 1. Would it have happened anyway? 2. At the same time? 3. With the same efficiency level? • Is there is a tradeoff between high project volume and attributable savings per project? • Challenges : • Methods still under discussion • Financing “programs” aren’t just financing (marketing, customer service, etc.) • Access to data (e.g., measures installed, billing data, customer surveys) may create issues • Need consistent data and third party verification : • Data should be reported consistently and reliably across programs • Different types of data or reporting methods may make a comparative assessment less meaningful • Independent verification of reported savings is the program evaluation industry standard
Savings Attribution and EE Financing 14
- I Attribution in CA Residential EE Financing 1 ,29'8 SulV>? y Resp ond en ts --- - 36 % - Mad e U pgrad e (n = 464 ) I l l 1 ,----- 0 75 % - Didi Not Use F anc:;ng ( n=349 ) 25 %- Used fin ancmg (n = 115 ) I l l 81 % U se d! Co.nven · an al 6% -Don 't 14 % - Used [[-Spec · c F a nc.n g Know/ Re fused Finan cin g 1--------ftl. a..:.pACE R eta il er: 34 % PACE Loan : 9% = • ,1 ..... ...- - ....... Con t ractor: 23 % EE Te rm Loon: 4% Credit Car di: 2 0% , EE MsjH EL OC: 0% Secured] Loan: 14 % Un sec u red] Loan: 14 % . Opinion Dynamics Loan from F am ily/ F riend s: 4% 15
16 Proposed Criteria 1. Energy savings attributable to program financing : The reduction in energy usage brought about specifically by the financing offered under each program, but not including savings that would have occurred in the absence of the offered financing. 2. Cost-effectiveness : A comparison of a program’s benefits to its costs. Total net benefits: The dollar value of the energy savings attributable to the financing less the cost of providing those savings . Benefit-cost ratio : The dollar value of the energy savings attributable to the financing divided by the costs of providing those savings. Impacts by market segment/sub-segment 3. Savings, cost- effectiveness, and • Segments/sub-segments reached market penetration • Attributable savings and cost-effectiveness by market segment by market segment and project type Measure and project characteristics • Measure mix by program • Number of measures installed per project • Savings per project Customer satisfaction : Whether customers got what they expected out of the program and were happy with the 4. Customer experience. experience Consumer protection : Whether the program adequately protected participants’ financial interests.
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