2017: An Award-winning Year for Inclusive Financing. What’s Next in 2018?

Inclusive Financing Wins Top Award in Search for Breakthrough Climate Strategies

The Climate Strategies Accelerator recognized Dr. Holmes Hummel, founder of Clean Energy Works, with a top award for advancing an innovative utility financing concept to accelerate electrification of the transportation sector.  Dr. Hummel was among eight fellows initially selected for the Accelerator from a pool of more than 500 hailing from 89 countries.

To make the case, Dr. Hummel drew on a body of work on utility tariffed investments in better buildings, upgrading their energy performance. A similar approach can catalyze rapid electrification in the transportation sector, starting with vehicles that tend to have the best business case – transit buses.  

How does it work?  By offering to make a site-specific investment and recover its cost on the monthly bill for that site, utilities can cut the upfront cost of batteries and charging stations.  The result is more value delivered to the customer, more electricity sales, and lower emissions for transportation as the grid continues to grow cleaner every year.

The Accelerator’s two-year award made through the Silicon Valley Community Foundation will assist Clean Energy Works with strategy development and stakeholder engagement.

Mainstage Presentation at VERGE 17

At VERGE 17, Dr. Hummel addressed GreenBiz’s premier sustainability conference to make the case for harnessing the power sector to accelerate transformation in the transportation sector. In front of 2,000 leaders from government, nonprofits, and the corporate and tech sectors, Dr. Hummel laid out the opportunity to capture market share in transportation fuels by addressing the upfront cost barrier for electric vehicles, starting with transit.

Dr. Hummel’s talk, “Inclusive Financing for Clean Energy — Paving the Way with EVs,” laid out a vision to drive oil out of the transportation sector and surging investment in EVs. Widespread adoption of inclusive financing tools, such as a utility tariff, can accelerate this transition and help cities and transit agencies achieve their commitments to sustainability.

What’s Next for Clean Energy Works?

In 2018, Clean Energy Works will expand its field of activity to collaborate with allies and key stakeholders, including utilities, transit agencies, manufacturers, policy-makers, and NGOs.  Harnessing the strength of aligned interests, Clean Energy Works will focus on creating conditions for broader use of inclusive financing. This model has proved effective in energy efficiency building upgrades, and plummeting costs for batteries and other distributed energy solutions are opening the door for EVs and more.

We will continue to provide advisory services and technical support to those interested in adopting inclusive financing. For example, the Southeast Energy Efficiency Alliance (SEEA) sponsored a series of open-access briefings and webinars to dozens of champions for public interest in SEEA’s Inclusive Financing Learning Circle. This group is made up of practitioners who are exploring a specific application of inclusive financing, and they receive technical assistance on designing and implementing utility tariffs.

As we continue to build on the momentum of the Climate Strategies Accelerator award, we will continue to seek ways to go to scale faster, both inside the U.S. and beyond.  If you have an interest in exploring your potential, please be in touch:  info@cleanenergyworks.org.

Mainstage at VERGE 17: Paving the Way for Inclusive Finance through EVs

VERGE 17, GreenBiz’s premier sustainability conference, recently brought together 2,000 attendees to Santa Clara, California, to learn, share and be inspired to create a better future. The conference converged leaders from the corporate, tech, government, nonprofit and art sectors to accelerate sustainability solutions and forge connections.

Dr. Hummel’s main-stage presentation makes the case for widespread adoption of inclusive finance starting with accelerating electrification of bus transit.

“For years, utilities have resisted the distributed energy revolution already underway. Yet, electrification of the transportation sector presents a historic opportunity for growth, and it is a critical path for climate stabilization. What’s new? In the last year, plummeting battery costs have helped the some vehicles — specifically, long-range electric transit buses — finally approach cost parity on a lifecycle basis when compared to diesel buses. At the same time, an innovative finance mechanism is gaining traction in the utility sector that would allow utilities to invest and recover costs for the on-board batteries. With these developments, utilities could drop the upfront cost of all-electric vehicles, set off a surge in sales, and rapidly capture the prize of market share for transportation fuels. But will they?”

International Accelerator Awards Holmes Hummel for Breakthrough Financing Strategy for Clean Transit & Electric Vehicles

After considering more than 500 ideas from 89 countries over the course of eight months, the Climate Strategies Accelerator selected an innovative financing concept raised by Dr. Holmes Hummel for a top award.  Specifically, Dr. Hummel proposed to cut the upfront cost of EVs by applying a successful utility tariff for distributed energy solutions, starting with bus fleets that provide the most compelling business case.

For the final round, the Accelerator hosted a Silicon Valley-style Innovation Showcase attended by an invited audience of more than two dozen leading funders and field leaders for climate action. Criteria for selection included judging on the merits of potential for breakthrough impact, breakthrough strategy, leadership, field-wide perspective and capacity to execute.  

 Final decisions were made by representatives of the Packard Foundation, Oak Foundation, and Good Energies, the sponsors of the Climate Strategies Accelerator Fund.  The Silicon Valley Community Foundation, which hosts the Fund, will process the Accelerator’s recommendation of a two-year award to advance the strategy to drive down oil demand with innovative utility financing for EV, starting with clean transit.

Climate Strategies Accelerator selects Clean Energy Works for 2017 Oil Breakthrough Lab

CSA logo

“Think a world without oil is possible?  Here’s your chance to prove it.”  That was the challenge posed by the Climate Strategies Accelerator when they announced the Oil Breakthrough Lab, a worldwide challenge that drew more than 500 candidates from 89 countries. Among the 8 Fellows selected is Dr. Holmes Hummel, whose work on inclusive financing for building energy efficiency upgrades shows even greater potential for rapid uptake in the transportation sector.

The Climate Strategy Accelerator’s announcement includes recognition for Clean Energy Works along with luminaries in the field such as Nnimmo Bassey (Nigeria) and Fuiquing Yang (China).  Fellows will draw on the resources of the Accelerator to fast-track the development of their ideas into working prototypes for initial application.  Sponsors of the Accelerator include Good Energies, the Oak Foundation, and the Packard Foundation, and Fellows will have the opportunity to present their opportunities for impact to funders later this year.

Through the Accelerator, Clean Energy Works will be able to advance the application of tariffed on-bill programs to transit buses, which are essential infrastructure in cities around the world.  Dozens of major cities have already pledged to move toward zero emission fleets, yet financing has proven to be a key constraint slowing the transition.  Once applications to transit fleets are well underway, additional vehicle classes can be covered as can upgrades to buildings with additional distributed energy solutions.

NRECA features How $martKY in America’s Electric Cooperatives

An excellent article, How $mart is Energy Efficiency?, was recently featured on the National Rural Electric Cooperative Association (NRECA)’s website America’s Electric Cooperatives.

The article highlights How $martKY, an inclusive finance program offered by six Kentucky utilities for energy efficiency building upgrades. NRECA highlights the economic development effects of the program:

“Each retrofit creates an average net cash flow of just over $132 a year, which creates an economic ripple effect of almost $40,000 per year…”

“A Huge Difference in Comfort and Cost”

The Starrs at home. Photo courtesy of Ouachita Electric

The Alliance to Save Energy has raised the visibility of inclusive financing through its vast network by highlighting the story of Kassy Starr and her farming family in Arkansas.

Kassy joined the HELP PAYS® program offered by Ouachita Electric, and with thanks to the upgrades they received, the Starrs were able to expand their farm and invest in their future.

“The whole process to get started was so easy,” Starr says, “and the next thing I know they’re calling to set up the upgrades: insulation, installing the new HVAC system, then Ouachita Electric came out to confirm it was all done correctly.”  The upgrades were completed in September 2016, and energy use dropped nearly 23 percent compared to the year before, even though September 2016 was hotter (and required more air conditioning power) than 2015.

“It immediately made a huge difference in our home’s comfort,” Starr says. “The new air conditioning was so much better at the end of the summer—before, we were running our air conditioning nonstop, and the house was still too warm.”

To read the article, “A Huge Difference in Comfort and Cost”, visit the Alliance to Save Energy.

Alliance to Save Energy raises the visibility of inclusive financing

Pay As You Save offers utility customers to acess cost effective energy upgrades using a proven investment and cost recoveru model that benefits both the customer and utility.

The Alliance to Save Energy, the largest national energy efficiency coalition in the U.S., invited our own Holmes Hummel to make the case for inclusive finance on its Blog to Save Energy, publishing a concise article that explains the concept and its importance in the field.

Founded in 1977, the Alliance to Save Energy is a bipartisan alliance of business, government, environmental and consumer leaders advocating for enhanced energy efficiency across all sectors of the economy. Its mission is to promote energy efficiency to achieve a healthier economy, a cleaner environment and enhanced energy security.

Inclusive financing advances ASE’s mission by accelerating investment, especially in underserved market segments.  Hummel recapped the breakthrough that has opened the clean energy economy to all by using a utility tariff rather than other financial instruments:

“…with an on-bill tariff based on the PAYS system, the utility makes an investment that is qualified by the cost effectiveness of the upgrade rather than the creditworthiness of the individual customer.  Therefore, all customers are eligible regardless of income, credit score, or renter status.”

Get the whole story: Opening Energy Efficiency To All With Inclusive Financing.

California Energy Commission recommends utilities introduce inclusive financing

California Energy Commission logo

The California Energy Commission has issued the landmark SB350 Low Income Barriers Study ordered by state law SB350 because too few of the billions of dollars in rate-payer and taxpayer funded programs for energy efficiency and renewable were actually reaching people in disadvantaged communities.

The CEC study recognized the majority of low-income residents in the state are renters, and it identified the split incentive between landlords and tenants as a primary barrier to investment in cost effective energy efficiency upgrades.  In its consideration of solutions, the CEC wrote:

“Under this model [tariffed on-bill investments], the utility finances the energy installation and recovers the cost by fixing a charge to the utility bill that is less than the projected energy savings. The major advantage of this approach is that it is debt-free for the customer, as well as it eliminates obstacles for low-income renters to submit to and pass a credit check.  The Existing Buildings Energy Efficiency Action Plan calls for evaluating the potential for on-bill financing pilots.

“This program would require the utility to finance the upgrade investment cost or facilitate capital commitments for those investments. A reserve fund established by the State could be useful to insure utilities against charge-offs of uncollectible program service charges billed to participants for cost recovery. Any upgrades would likely require permission from the landlord, but there would be no landlord debt obligation or property lien.”

And in its final recommendations, the California Energy Commission concluded that every type of energy utility in the state (for-profit IOUs, municipal utilities, public utility districts, and cooperatives) should introduce a pilot program for tariffed on-bill investment:

“The State should continue developing a series of energy upgrade financing pilot programs to evaluate a variety of models to improve access and participation of low-income customers, including those in disadvantaged communities. The pilot programs would include the cost of health and safety measures required to accomplish energy efficiency upgrades. Possible pilots include:

  • The CPUC should consider developing a tariffed on-bill pilot for investments in energy efficiency that targets low-income customers regardless of credit score or renter status, and that do not pass on a debt obligation to the customer. Utilities could use the program to make energy upgrade investments and recover the cost through the bill, so long as the recovery charge is less than the estimated savings. The Energy Commission should encourage and provide technical assistance to POUs and other load-serving entities seeking to implement a tariffed on-bill pilot.”

The CEC’s full report, SB350 Low-Income Barriers Study, and documentation of extensive stakeholder consultation that informed their deliberations are posted online.

Introduction to PAYS® and Update on Inclusive Finance in the South webinars now available online

You can now access the full recording and slides of the Southeast Energy Efficiency Alliance’s first two  webinars of their comprehensive 2017 series on inclusive financing.

January 2017: Introduction to Inclusive Financing for Energy Efficiency
This webinar is an excellent introduction to the basics of inclusive financing solutions for energy efficiency, brought to you by SEEA and Clean Energy Works.

February, 2017: Update on Inclusive Financing Programs in the South
Learn from leading program operators who are managing multi-million dollar efficiency investment portfolios in areas of the South that are affected by persistent poverty.

If you’ve seen these webinars and want to explore in depth the adoption of inclusive finance, consider joining SEEA’s Learning Circle, with five additional sessions once a month on topics ranging from consumer protections to sourcing capital. Contact Wesley Holmes at wholmes@seealliance.org to apply for participation in the Learning Circle!

Join us for a series on inclusive financing in the new year!

Are you interested scaling up financing solutions for energy efficiency that can reach all market segments, including low-income communities?

The Southeast Energy Efficiency Alliance invites you to learn more about inclusive financing solutions for energy efficiency. Beginning in 2017, SEEA and Clean Energy Works is offering a comprehensive webinar series based on the experience of eight utilities in three Southern states that have already put millions of dollars to work right in the communities they serve.

February, 2017: Update on Inclusive Financing Programs in the South
Learn from leading program operators who are managing multi-million dollar efficiency investment portfolios in areas of the South that are affected by persistent poverty.

If you missed the opportunity to join us in January, follow the link to see a full recording of the webinar below:

January, 2017: Introduction to Inclusive Financing for Energy Efficiency
Need to start at the beginning? Want to improve your skills at introducing the concept to more leaders? This is your chance to cover the basic concepts along with the most frequently asked questions.

Participants who attend both January and February sessions will be eligible to join a SEEA Learning Circle for six monthly sessions in 2017 that delve into deeper detail. This series is specifically designed to support stakeholders and practitioners exploring a specific application of inclusive financing to open the clean energy economy for all. For more information, contact SEEA Director of Strategy and Development, Wesley Holmes at wholmes (at) seealliance.org