GJGNY Advisory Council Meeting May 16, 2017 2 Agenda Welcome and - PowerPoint PPT Presentation

GJGNY Advisory Council Meeting May 16, 2017

2 Agenda • Welcome and Introductions • Residential Loan Fund Review and Residential Energy Efficiency Program Update • Workforce Development Working Group Report and Recommendations • GJGNY Jobs Analysis • Closing Remarks and Next Steps

3 Residential Loan Fund Review and Residential Sector Update

4 Changes to Loan Interest Rate – 9/1/2016 Income/Credit Range 1 Interest Rate – EE 2 Interest Rate – PV and Other/Combined 2 Up to 80% AMI 3.49 or 3.99% 3.49% or 3.99% >80% AMI up to 120% AMI 4.99% or 5.49% 4.99% or 5.49% >120% AMI Tier 2 3 5.99% or 6.49% 5.99% or 6.49% >120% AMI Tier 1 6.99% or 7.49% 7.99% or 8.49% 1 AMI – Area Median Income 2 Lower Interest rate applies to On-Bill Recovery Loan or automatic withdrawal from bank account 3 Tier 2 refers to expanded underwriting criteria for those unable to meet traditional criteria

5 Changes to Home Performance with ENERGY STAR (HPwES) Programs • 9/1/2016 – 10% consumer incentive eliminated (market rate customers) – Multiple contractor incentives consolidated into a 10% contractor incentive • 10/1/2016 – Assisted incentive cap reduced from $5,000 to $4,000 ($10,000 to $8,000 for 2 to 4 unit building) • 1/1/2017 – PSEG Long Island is primary administrator of Home Performance with ENERGY STAR on Long Island and coordinates loans with NYSERDA – NYSERDA-participating contractors serving other Long Island customers have access to loan fund

6 Funding Needs Compared to Projections

7 Projections from 2016 Compared to Actuals RGGI$ RGGI$ Business With Impact to Loans Issued Projected Loans Actual Loans Issued as Usual Proposed RGGI$ Component FY15-16 FY16-17 % of Total FY16-17 % of Total 3.49% % of Total Changes % of Total Actual % of Total <80% AMI $13.1 $16.1 16% $30.5 41% $8.0 19% $8.0 28% $14.1 47% 81-120% AMI $17.2 $24.2 24% $17.1 23% $12.0 28% $10.7 38% $6.4 22% >120% AMI $49.0 $61.2 60% $26.9 36% $22.3 53% $9.8 34% $9.1 31% Total $79.3 $101.5 100% $74.4 100% $42.3 100% $28.5 100% $29.7 100% Tier 1 $65.1 $81.5 80% $61.6 83% $22.3 53% $8.5 30% $16.8 57% Tier 2 $14.2 $20.0 20% $12.9 17% $20.0 47% $20.0 70% $12.9 43% Total $79.3 $101.5 100% $74.4 100% $42.3 100% $28.5 100% $29.7 100%

8 Green Jobs-Green New York Financing Residential Loans Issued by Tier (Past Three Years) 900 100% 90% 800 80% 700 70% 600 Loans Issued % of Total 60% 500 50% 400 40% 300 30% 200 20% 100 10% 0 0% # Tier 1 Loans Issued / Month # Tier 2 Loans Issued / Month % Tier 1 % Tier 2

9 Income Distribution of Loans - EE Green Jobs-Green New York Financing (EE Only) Residential Loans Issued for Applications Received on or after 9/01/16* 160 80% 140 70% 120 60% Loans Issued 100 50% % of Total 80 40% 60 30% 40 20% 20 10% 0 0% 10/31/2016 11/30/2016 12/31/2016 1/31/2017 2/28/2017 3/31/2017 4/30/2017 Loans Issued / Month (EE) % <80% AMI % 80-120% AMI % >120% AMI (Tier 1) % >120% AMI (Tier 2) * AMI = Area Median Income, which is the greater of the State or County Median Income. Households with incomes greater than 120% AMI are further grouped by underwriting Tier, with different interest rates applying to each group.

10 Income Distribution of Loans – PV, Other Renewables and Combined Projects Green Jobs-Green New York Financing (Renewables & Combined Technologies Only) Residential Loans Issued for Applications Received on or after 9/01/16 40 70% 35 60% 30 50% Loans Issued % of Total 25 40% 20 30% 15 20% 10 10% 5 0 0% 10/31/2016 11/30/2016 12/31/2016 1/31/2017 2/28/2017 3/31/2017 4/30/2017 Loans Issued / Month (Renewables & Combined Technologies) % <80% AMI % 80-120% AMI % >120% AMI (Tier 1) % >120% AMI (Tier 2)

11 Affordable Solar with GJGNY Loans GJGNY Financing with Affordable Solar Incentive Residential Loans by Month 10 9 8 Number of Loans 7 6 5 4 3 2 1 0

Residential Energy Efficiency – Market Rate 100 200 300 400 500 600 700 800 900 0 4 / 2014 5 / 2014 6 / 2014 7 / 2014 8 / 2014 9 / 2014 Assisted Projects 10 / 2014 Home Performance with ENERGY STAR 11 / 2014 12 / 2014 1 / 2015 2 / 2015 3 / 2015 4 / 2015 (Past Three Years) 5 / 2015 6 / 2015 Project Types Market Rate Projects 7 / 2015 8 / 2015 9 / 2015 10 / 2015 11 / 2015 12 / 2015 1 / 2016 2 / 2016 3 / 2016 4 / 2016 % Projects that are Assisted 5 / 2016 6 / 2016 7 / 2016 8 / 2016 9 / 2016 10 / 2016 11 / 2016 12 / 2016 1 / 2017 2 / 2017 3 / 2017 4 / 2017 0% 10% 20% 30% 40% 50% 60% 12

13 Contractor/Installer Survey, Loan Fund Performance, Program Performance

14 Survey • Purpose – Understand impact of GJGNY loan interest rate changes – Understand impact of Home Performance with ENERGY STAR (HPwES) incentive changes – Obtain other “top of mind” feedback • Distributed April 21st, due April 30 th ; reminder sent • Two versions: – 190 HPwES contractors (40% response rate) – 155 PV installers signed up to use loan fund (14% response rate)

15 Q. What is the percentage of your total jobs in the residential 1-4 family sector that received NYSERDA financing prior to 9/1/2016? After? Cumulative Count - Financing Received Prior to 9/1/2016 Cumulative Count - Financing Received Prior to 9/1/2016 Cumulative Count - Financing Received After 9/1/2016 Cumulative Count - Financing Received After 9/1/2016 11 75-100% 16 0 75-100% Energy Efficiency 6 6 50-75% 17 Solar PV 0 50-75% 11 2 20 25-50% 25-50% 5 15 2 19 0-25% 0-25% 16 40

16 Green Jobs-Green New York Financing Residential Applications Received and Denied by Month (Past Three Years) 1400 1400 1200 1200 * 1000 1000 Applications 800 800 Denials 600 600 400 400 200 200 0 0 * Applications / Month Applications / Month (Since Interest Rate Change) Total Applications Denied / Month Applications Received (Rolling 6 Month Trend)

17 Green Jobs-Green New York Financing Residential Loans Issued by Technology (Past Three Years) 800 100% 90% 700 80% 600 70% Loans Issued 500 % of Total 60% 400 50% 40% 300 30% 200 20% 100 10% 0 0% # Energy Efficiency Loans Issued / Month # PV & Other Loans Issued / Month % EE % PV & Other

18 Q. Since 9/1/2016, how often have you encouraged customers to consider a Smart Energy loan? An On-bill Recovery Loan? On On-Bill ll Recov overy ery Loan – Energy gy Efficienc iency Smart t Energy gy Loan – Energy Efficienc iency All of the time All of the time Most of the time Most of the time Some of the time Some of the time Rarely Rarely

19 Q. Since 9/1/2016, how often have you encouraged customers to consider a Smart Energy loan? An On-bill Recovery Loan? Smart t Energy gy Loan - PV PV On On-Bill ll Recov overy ery Loan - PV PV All of the time All of the time Most of the time Most of the time Some of the time Some of the time Rarely Rarely

20 Green Jobs-Green New York Financing Residential Loans Issued by Type (Past Three Years) 900 100% 90% 800 80% 700 70% 600 Loans Issued % of Total 60% 500 50% 400 40% 300 30% 200 20% 100 10% 0 0% # Smart Energy Loans Issued / Month # OBR Loans Issued / Month % Smart Energy % OBR

21 Q. If NYSERDA's financing program is not used by a customer, how do they pay for their project? • Highest rank response for EE (67%) – “out -of- pocket” • Highest ranked response for PV (50%) – “other PV lender,” followed by “out -of- pocket” (34%) • Variety of other types of financing (local banks, home equity loan, company financing)

22 Q. Do you suggest lenders other than NYSERDA to your customers? Who? Response – Response – Energy Efficiency Solar PV Manufacture Other r Financing 8% 13% Personal Banks: 12% Personal Manufacture Banks Private rs Financing: 27% Lenders 14% Private 60% Lenders: 66%

23 Q. Why do you suggest lenders other than NYSERDA for financing? Reasons for Suggesting Other Lenders Other (please specify) Faster response More attractive interest rates Higher maximum loan amount No cost effectiveness requirements Longer loan terms 0.0% 20.0% 40.0% 60.0% 80.0% PV Energy Efficiency Other: easier paperwork and process, faster payment

24 Q. If you have seen a decrease in project volume since 9/1/2016, what do you think are the driving factors? Energy rgy Effici iciency cy PV PV Litt ttle le Modera rate te Signif ifica icant t Litt ttle le Modera rate te Signif ifica icant t Possib ssible le Drivin ving Facto ctors rs Impact ct Impact ct Impact ct Impact ct Impact ct Impact ct 10 9 22 0 4 16 Increased Interest Rates Projects are unable to meet loan cost 15 19 7 effectiveness requirements Incentives reduced or eliminated 12 10 19 3 10 7 I'm unable to differentiate myself from 18 9 14 other competitors without the 10% consumer incentive The reduced incentive of $4,000 for 12 16 13 Assisted Home Performance with ENERGY STAR External factors, customers doing fewer 11 16 14 15 3 2 improvements to their home (weather, cost of living, cost of energy, etc.) 16 12 13 Lack of other financing options lack of advertising by NYS, inequitable interest rate, low higher business costs, return on investment Other (please specify): inequitable interest rate