Clean Energy Finance and Investment Authority Clean Energy Incentive Programs CBIA Environment & Energy Conference June 19, 2013
Agenda ▪ What is CEFIA ▪ Examples of Program and Project Investment ▪ Opportunities – Smart-E Loan – Solar Lease – C-PACE – Strategic Project - Bridgeport Fuel Cell Energy Park
The Old Clean Energy Fund Model Limited Financing Tools Grants Loans Grants and Incentives Equity
CEFIA – the First “Green Bank” All Purpose Financing Tools Public-Private Partnerships Loans Grants Tax Equity Funds Finance and Investments Financing energy Credit enhancements efficiency projects Securitization Energy savings performance Bonding contracts Community Development Financial Institution Energy consumption data Commercial and Industrial PACE (C-PACE)
Smart-E Loan Overview Comprehensive list of eligible Robust QA/QC Affordable Private More Energy measures and Process Capital Savings eligible contractors Not to exceed rates: Any measure (or Projects must pass technical 5-yr 4.49% combination) that qualifies check before lender closes 7-yr 4.99% for CEFIA, utility or CEEF loan 10-yr 5.99% incentive or rebate qualifies 12-yr 6.99% All large projects inspected Any contractor already onsite before lender remits No prepayment penalty qualified by CEFIA, utilities, final (2/3) payment to CEEF, CHIF or BPI is eligible contractor Loans of $3,000-$25,000+ 20% of total amount financed Smaller projects randomly can be used for related, non- inspected energy measures like asbestos remediation or roof repair 5
Solar Lease 1.0 versus 2.0 CT Solar Lease 1.0 CT Solar Lease 2.0 Award-Winning $44.3M Total Hard Costs ~$65M Total Hard Costs $7.07/Watt Installed Cost $4.21/Watt Installed Cost 6.3MW Solar PV Installed 14.1 MW PV and 5K MMBTU SHW 855 Leases ~2,000 Leases (& PPAs) Residential + muni/school/NFP Residential Solar PV only + "A" commercial -- PV & SHW 1 : 1 >5 : 1 Private $ : Ratepayer Investment Private $ : Ratepayer Investment Fees / Investment returned to CEFIA Fees / Investment "lost" (Ratepayers) Subsidy out: $22.6M Subsidy Subsidy out: $16.5M Subsidy back: back: $0 ~ $15-$16M 6
Solar Lease 2.0 Proposed Structure Upon completion and approval of a PV System, the PV System flows through the Developer and into the fund instantaneously. *Equity contribution of $11 million includes CEFIA CT Innovations $3.5 million in ARRA Reserve funds. **Pursuant to its statutory authority, CEFIA may only establish a subsidiary with another 90% 10%** entity. As such, CT Innovations has agreed to take a small non-active participation role in CEFIA Holdings Buy CEFIA Holdings. Please note that CEFIA is the (Developer) PV Systems sole managing member of CEFIA Holdings . Sub-debt $2.3 mm Sell Blocker (Taxable) PV Systems (Managing Member) Equity $11 mm* First Niagara Bank (Lead) Tax Equity Debt Liberty Bank US Bancorp CT Solar Lease 2 LLC $24 mm $26 mm Webster Bank (Tax Equity) People’s United Bank (Debt) AFC First Installers (Servicer) Installation Services PV Systems
C-PACE Overview “ Commercial Property Assessed Clean E nergy” ▪ Innovative financing structure that enables commercial, industrial, and multi-family property owners to access financing for qualified energy upgrades and repay through a benefit assessment on their property tax. – Private sources of capital provide 100% upfront, low-cost & long- term funding for qualified energy upgrades – Allows repayment through property tax assessment over 20 years – A senior PACE lien is put on the property and stays with the property regardless of change in ownership. 8
C-PACE Benefits Project Capital Existing Mortgage Property Owners Municipalities Providers Lenders • Provides low risk • Gives access to low • Lowers operating • Reduces energy investment cost, long term costs for building costs for businesses opportunity: financing to improve • SIR must be >1 to building energy use • Senior lien qualify • Reduces pollution • Association with secure payment • Automatically • Non-accelerated • Creates economic stream (taxes) transfers in the event obligation development of a sale opportunity, • Legal and technical including job • Creates a more structure • Improves creation attractive building administered by attractiveness and for occupants CEFIA comfort of property • Creates a more • Potential CRA credit • Solves split incentive attractive building problem for future owners 9
Bridgeport Fuel Cell Park 160 140 Interconnect Construction, 10.4 120 Replacement Manufacturing, 12.5 100 80 Initial Manufacturing, 60 93.8 40 Service + 20 Operation, 4.75 Construction + Installation, 13.5 0 Private Capital Investment Jobs Created
New York follows Connecticut’s lead “The New York Green Bank would overcome a number of obstacles and uncertainties in the clean energy sector, including unstable federal funding and policy , uncoordinated action and disparate one-time subsidies at the state level , a lack of appropriate financial instruments, and apprehension in the investor community .”
Brian Farnen General Counsel brian.farnen@ctcleanenergy.com 860.257.2892
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