New York State Home Performance with ENERGY STAR
Location: New York
Seed Funding: $40 million ($21.4 million of which went to sub-grantee, New York City)
Target Building Type: Residential (single and multifamily), commercial, and government
Read Green Jobs Green New York (GYGNY) case studies
Read home performance case studies
Read program evaluation reports
Affordable Comfort Institute New York ENERGY STAR for Homes Conference, co-hosted by NYSERDA February 8 and 9, 2012
NYSERDA: Innovations in Financing Energy Efficiency
New York Improves Existing State Program With Better Buildings
The New York State Energy Research and Development Authority (NYSERDA) is a first-of-its-kind public benefit corporation created in 1975 that has been upgrading homes in New York State for more than 10 years. Charged with protecting the environment and creating clean energy jobs, NYSERDA is working to reduce energy consumption and greenhouse gas emissions in order to meet New York's goal of "45 by 15," which means 45% of the state's electricity needs would come from renewable energy and improved energy efficiency by 2015. With a wide range of programs that run from experimental to established, NYSERDA is using $40 million in seed funding from the U.S. Department of Energy's Better Buildings Neighborhood Program to bolster its existing efforts and reach even more New York households with energy efficiency upgrades.
Improved Financing to Drive Demand
NYSERDA's Home Performance with ENERGY STAR® program takes a whole-house approach that starts with a free or low-cost evaluation of a home's energy use. The comprehensive home energy assessment report gives New York homeowners a prioritized list of recommended energy efficiency improvements. To make it easier for homeowners to implement energy upgrades, Green Jobs – Green New York legislation passed in 2009 directed NYSERDA to establish a revolving loan fund (RLF). Through it, homeowners can get unsecured loans of up to $25,000 at low interest rates to finance Home Performance with ENERGY STAR improvements. Rates are as low as 3.49%, with terms of service up to 15 years. Income-eligible residents can receive up to a 50% direct rebate off the cost of the improvements.
These low rates are made possible in part by NYSERDA leveraging funding from Better Buildings. NYSERDA also plans to sell bonds to raise additional capital. Approximately $9.2 million in Better Buildings funding is being used to establish a loan loss reserve to give investors confidence that the loans won't lose capital, allowing them to invest at a lower interest rate.
Local Promotions Boost Involvement
To promote increased participation, NYSERDA is experimenting with expanded community-based methods to spread the word. Through the Community Development Corporation of Long Island, NYSDERA is providing seven communities on Long Island with funding to increase outreach efforts. The towns of Babylon, Brookhaven, Huntington, Islip, North Hempstead, Smithtown, and Southampton—which make up approximately 70% of Long Island's total population—are working to raise awareness of energy savings opportunities. They are connecting homeowners with free or reduced cost assessments and the revolving loan fund that supports the Home Performance with ENERGY STAR program. In addition, the towns are conducting targeted outreach to homeowners and coordinating with the Sustainability Institute at Molloy College to plan community events. The town of Huntington implemented an extensive advertising and marketing campaign, which included an active social media campaign, resulting in nearly 3.5 million impressions. Successful marketing efforts include an online banner, Facebook, and magazine advertisements.
Incentives Help Create Jobs
While the Green Jobs – Green New York program provides New Yorkers with access to low-cost installation services, it also provides job seekers with training for various green-collar careers. Better Buildings funding allows NYSERDA to offer free energy evaluations for small businesses, which will lead them into using the Green Jobs – Green New York program for energy upgrades. This is expected to create new jobs for the more than 100 businesses in the state's network of certified energy professionals.
From Small Towns to a Major Metropolis
The town of Bedford, New York, used its own Better Buildings Neighborhood Program seed funding to develop software and a Web portal that makes it easy for residents to receive home evaluations and implement energy efficiency improvements through Home Performance with ENERGY STAR. In its pursuit of statewide solutions, NYSERDA has given Bedford access to software the agency developed that tracks energy efficiency projects from beginning to end. In return, Bedford has agreed to share the lessons it learns about creating a small town energy efficiency program with other communities in the state.
NYSERDA executed a $21.4 million sub-award to New York City in October 2011, and transferred approximately $17.8 million to the city to fund a loan loss reserve and a revolving loan fund. To date, the New York City Energy Efficiency Corporation (NYCEEC) has identified and is currently developing standards and procedures to offer three different energy efficiency loan products as either a lender or as a credit enhancement provider:
- Unsecured Loans. NYCEEC and other lenders may provide stand alone unsecured loans for energy efficiency upgrade improvements, primarily for multifamily residential, affordable multifamily residential, and privately held institutional properties.
- Energy Services Agreements. An energy services agreement (ESA) is a contract between a building owner and an energy service provider. Pursuant to the ESA, the energy service provider implements energy-efficient upgrades, which are paid for through savings on the building owner's utility bill. To finance building upgrades, ESA providers may obtain a loan through a Special Purpose Vehicle (SPV) established to capitalize one or more energy upgrade projects. The SPV may either borrow directly from NYCEEC or from one or more third-party lenders benefitting from a NYCEEC credit enhancement. This transaction structure is primarily applicable to multifamily residential, commercial, and privately held institutional properties.
- Mortgage Credit Enhancement. When a lender provides a mortgage loan, NYCEEC may provide credit support for the portion of the loan that is used to fund additional energy efficiency upgrade improvements that would not otherwise be funded through the traditional mortgage lending process. This transaction structure is at present primarily targeted to multifamily and affordable multifamily residential properties.
518-862-1090 ext. 3519
U.S. Department of Energy
Better Buildings Neighborhood Program