DOE/HUD Announcement

DOE and HUD Announce Lenders to Participate in New Pilot Program to Help Homeowners Pay for Energy Improvements to their Homes

FHA PowerSaver Program to offer low-cost financing to credit-worthy
borrowers

April 21, 2011

Eighteen national, regional and local lenders will participate in a new two-year pilot program that will
offer qualified borrowers living in certain parts of the country low-cost loans to make energy-saving
improvements to their homes. Backed by the Federal Housing Administration (FHA), these new
PowerSaver loans will offer homeowners up to $25,000 to make energy-efficient improvements of
their choice, including the installation of insulation, duct sealing, replacement doors and windows,
HVAC systems, water heaters, solar panels, and geothermal systems.

U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan and U.S. Department of
Energy Secretary Steven Chu announced the participating lenders (see attached list) during a tour of
a family-run company that offers home energy audits and upgrades in Long Island, New York.
"We believe the market is right for a low-cost financing option for families who want energy-saving
technologies in their home," said Secretary Donovan. "PowerSaver hits on all cylinders by helping
credit-worthy homeowners finance these upgrades, cut their energy bills and boost the local job
market in the process. While FHA and these lenders are jumpstarting this pilot, we hope its success
will lead to a growing private sector interest in making these types of loans."

Secretary Chu said, "Today, we are breaking down barriers and making energy efficiency more
accessible and more affordable. It’s the right thing to do for our environment, for our economy, and
for the pocketbooks of American families."

The remodeling industry cites surveys that point to a growing demand among homeowners interested
in making their homes energy efficient. Yet options are still limited for financing home energy
improvements, especially for the many homeowners who are unable to take out a home equity loan
or access an affordable consumer loan. Initially, the PowerSaver pilot program is estimated to assist
approximately 30,000 homeowners to finance energy-efficient upgrades though higher market demand
may increase this impact. According to HUD projections, more than 3,000 jobs will be created through
this pilot program and the impact may be larger if market demand for the loan program increases
over time.

Participating lenders are largely selected based on their commitment to work in partnership with
established home energy retrofit programs provided by states, cities, utilities, and home performance
contractors. These markets include, but are not limited to, areas of the country participating in the
Energy Department’s Better Buildings Program.

PowerSaver loans will be backed by the FHA but require these lenders to have significant "skin in the
game." FHA mortgage insurance will cover up to 90 % of the loan amount in the event of default.
Lenders will retain the remaining risk on each loan, incentivizing responsible underwriting and lending
standards.

PowerSaver has been carefully designed to meet a need in the marketplace for borrowers who have
the ability and motivation to take on modest additional debt to realize the savings over time from
home energy improvements. PowerSaver loans are only available to borrowers with good credit,
manageable debt and at least some equity in their home (maximum 100 % combined loan-to-value).
HUD developed PowerSaver as part of the Recovery Through Retrofit initiative launched in May 2009
by Vice President Biden’s Middle Class Task Force to develop federal actions that would expand
green job opportunities in the United States and boost energy savings by improving home energy
efficiency. The announcement is part of an interagency effort including 11 departments and agencies
and 6 White House offices.

FHA PowerSaver Approved Lenders
1. Admirals Bank
2. AFC First Financial Corporation
3. Bank of Colorado
4. City of Boise, Idaho
5. Energy Finance Solutions
6. Enterprise Cascadia
7. HomeStreet Bank
8. Neighbor's Financial Corporation
9. Paramount Equity Mortgage, Inc.
10. Quicken Loans
11. SOFCU Community Credit Union
12. Stonegate Mortgage Corporation
13. Sun West Mortgage Company, Inc.
14. The Bank at Broadmoor
15. University of Virginia Community Credit Union, Inc.
16. Viewtech Financial Services, Inc.
17. WinTrust Mortgage
18. W. J. Bradley Mortgage Capital Corporation

SunShot Initiative

DOE Pursues SunShot Initiative to Achieve 

Cost Competitive Solar Energy by 2020

Announces $27 Million in Projects to Advance Solar Development and Manufacturing

February 4, 2011

Washington, D.C. - U.S. Energy Secretary Steven Chu today announced additional details of the Department of Energy's "SunShot" initiative to reduce the total costs of photovoltaic solar energy systems by about 75 percent so that they are cost competitive at large scale with other forms of energy without subsidies before the end of the decade. By reducing the cost for utility scale installations by about 75 percent to roughly $1 a watt - which would correspond to roughly 6 cents per kilowatt-hour - solar energy systems could be broadly deployed across the country.

This will increase American economic competitiveness and help the U.S. regain leadership in the global market for solar photovoltaics. As part of the SunShot initiative, Secretary Chu announced today that the Department of Energy is awarding $27 million in projects to support the development, commercialization, and manufacturing of advanced solar energy technologies.

"America is in a world race to produce cost-effective, quality photovoltaics. The SunShot initiative will spur American innovations to reduce the costs of solar energy and re-establish U.S. global leadership in this growing industry," said Secretary Chu. "These efforts will boost our economic competitiveness, rebuild our manufacturing industry and help reach the President's goal of doubling our clean energy in the next 25 years."

The SunShot program builds on the legacy of President Kennedy's 1960s "moon shot" goal, which laid out a plan to regain the country's lead in the space race and land a man on the moon. The program will aggressively drive innovations in the ways that solar systems are conceived, designed, manufactured and installed.

In addition to investing in improvements in cell technologies and manufacturing, the SunShot initiative will also focus on steps to streamline and digitize local permitting processes that will reduce installation and permitting costs. To achieve the SunShot goal of reducing the total installed cost of large scale solar electricity by about 75 percent, DOE will be working closely with partners in government, industry, research laboratories and academic institutions across the country.
SunShot will work to bring down the full cost of solar - including the costs of the solar cells and installation - by focusing on four main pillars:

• Technologies for solar cells and arrays that convert sunlight to energy;
• Electronics that optimize the performance of the installation;
• Improvements in the efficiency of solar manufacturing processes;
• Installation, design and permitting for solar energy systems.

For more information and to follow the initiative's progress, visit the SunShot Initiative webpage.
As part of the launch of the SunShot initiative, DOE is also announcing $27 million in awards to nine new projects. This funding includes support for five projects that are receiving $20 million to further develop U.S. supply chains for PV manufacturing. This includes support for companies across the solar energy supply chain, including U.S. material and tool suppliers and companies that are developing technologies that can be adopted directly into current manufacturing processes. For more information and a list of awardees, read the $20 million investment excerpt from the EERE Network newsletter.

Additionally, DOE's National Renewable Energy Laboratory is investing $7 million to fund the latest round of the successful PV Incubator program, which helps to shorten the commercialization timeline for promising emerging solar technologies. The companies work closely with DOE national laboratories to scale their technologies and manufacturing processes and move the products from pre-commercial and prototype stage to pilot and full-scale manufacturing operations. For more information and a list of awardees, read the $7 million investment excerpt from the EERE Network newsletter.

The SunShot initiative builds on the Department's significant research and development (R&D) efforts in solar energy over the past decade, conducted in partnership with American universities, national laboratories and the private sector. In the last ten years, DOE has invested more than $1 billion in solar energy research that has been leveraged with significant private industry funding to support more than $2 billion in total solar R&D projects. This includes investments by DOE's Office of Science, Solar Energy Technologies Program, and ARPA-E, the Advanced Research Projects Agency-Energy. Innovations in both science and technology have driven the cost of solar down 60 percent since 1995, and have yielded a number of critical breakthroughs in solar PV performance and cost. Read the fact sheet (PDF - 26kb) detailing some of the Department's past and current work in solar energy.

'Buy American' Law

Pentagon required to buy only American-made solar panels.

On January 9, 2011, the New York Times reported that new legislation signed into law by the president requires the Department of Defense to buy only American-made solar panels.

In essence, the new 'Buy American' provision within the military authorization legislation is the first step towards transitioning the Pentagon away from purchasing Chinese-made solar modules. As the wars in remote desert regions continue, the military is investing more and more in practical solutions to bringing electricity to the troops. The move towards U.S. made modules should have a distinct impact on the U.S. solar industry, though the numbers are not clear at this point. As the Times reported:

China has emerged as the world’s dominant producer of solar panels in the last two years. It accounted for at least half the world’s production last year, and its market share is rising rapidly. The United States accounts for $1.6 billion of the world’s $29 billion market for solar panels; market analyses typically have not broken out military sales separately.

Representative Maurice Hinchey, Democrat (NY), a staunch supporter of the 'Buy American 'provision included in the bill is quoted as saying:

“We’ve had a lot of money taken out of this country and invested in other places around the world, particularly China, and particularly in alternative energies. For them to be producing alternative energy, that’s great, but we need to do it ourselves, and as much of it as possible."

To read the original article, click here.

Community Solar

Ellensburg Community Solar Project
Ellensburg, Washington

In 2006, the City of Ellensburg municipal utility installed a 36 KW community Photovoltaic (PV) system, the first of its kind in the nation, in an effort to harness the 300 days of sunshine the region experiences to power their local homes and businesses.  As Gary Nystedt, Resource Manager for the City of Ellensburg and organizer of the Solar Community Project puts it, “Produce the power where you use the power.”  An important aspect of this story is that everyone in Ellensburg  has the opportunity to invest in this locally produced clean electricity.  The project uses an innovative and unique financing approach—families, individuals, and businesses in the community have been asked to partner with the city to help fund the project. 

In exchange for their financial support, the city gives the contributors a financial credit on their electric bill for the value of the electricity produced by the solar system. For instance, if a customer contributes 3% of the total funds contributed by local residents and businesses, that contributor will receive the dollar value of 3% of the power produced by the solar project.  The Ellensburg Community Solar Project began generating power in November of 2006, and has since produced more than 170,000 kilowatt-hours, averaging 58,000 kilowatt-hours, annually.

 In May 2009, Washington passed SB 6170, effective July 1, 2009. With the passage of this legislation, community solar projects will be able to receive the production incentive after an official rulemaking procedure in the fall. Community solar projects are defined as solar energy systems owned by local entities and placed on local government property or owned by utilities and funded voluntarily by utility ratepayers.

The base rate for community solar projects is $0.30/kWh and the multipliers are the same as those used for other renewable energy technologies. The actual production incentives range from $0.30/kWh to $1.08/kWh, as the incentive rate is higher for modules and inverters manufactured in Washington.  Each participant in the community solar project can apply to receive this incentive and may receive up to $5,000 per year. 

The Washington Department of Revenue (DOR) is responsible for submitting a report measuring the impacts of this legislation, including any change in the number of solar energy system manufacturing companies in Washington, and the effects on job creation, such as the number of jobs created for Washington residents.

Production Incentives

WA State Senate Bill 5101

 In order to assist in meeting the growing need for additional energy production, Washington State’s Senate Bill 5101, the Renewable Energy Production Incentive, was passed in 2005, and has been hailed as “the most important solar legislation ever introduced in any American state legislature,” by Denis Hayes, the founder of Earth Day, president of the Bullitt Foundation and chair of the American Solar Energy Society (ASES). 

Mike Nelson of Washington State University and The Northwest Solar Center, using the German incentive model, helped to pen this legislation, and explains: “Effectively, owners of solar systems become micro-utilities, producing a revenue stream from their investment in renewable resources.”

The incentives apply to power generated as of July 1, 2005, and remain in effect through June 30, 2020.  The producer can be a home or a business. The incentive amount paid to the producer starts at a base rate of $0.15 per kilowatt-hour (kWh), capped at $5,000 per year, and is adjusted by multiplying the incentive by the following factors:

Factor 1:  Electricity produced using solar modules manufactured in Washington State, such as Efficient Life Technology’s Starborn Module:
Multiply by 2.4
($0.15 x 2.4 = $0.36/kWh)

Factor 2:  Electricity produced using a solar system equipped with an inverter manufactured in Washington state:
Multiply by 1.2
($0.15 x 1.2 = $0.18/kWh)

Factor 3:  Electricity produced using solar modules manufactured in Washington state & an inverter manufactured in Washington state:
Multiply by 3.6
($0.15 x 3.6 = $0.54/kWh)

Net Metering Overview

Taking advantage of Washington’s Renewable Energy Production Incentives does not reduce or impact savings achieved through net metering.  Net metering is an electricity policy for consumers who own (generally small) renewable energy facilities, such as wind, solar power or home fuel cells. “Net”, in this context, is used in the sense of meaning “what remains after deductions” — in this case, the deduction of any energy outflows from metered energy inflows.  So, in addition to the production incentive payments, which are based on the total amount of power that their system has produced (no matter how much of that power they themselves consume), with net metering programs, individual producers are granted credit on their power bill for all of the energy they have produced but did not consume, that power which passes through the utility-installed meter and back into the grid.

Washington’s net-metering law applies to systems up to 100 kilowatts (kW) in capacity that generate electricity using solar, wind, hydro, biogas from animal waste, or combined heat and power technologies (including fuel cells). All customer classes are eligible, and all utilities – including municipal utilities and electric cooperatives – must offer net metering. 

Net metering is available on a first-come, first-served basis until the cumulative generating capacity of net-metered systems equals 0.25% of a utility’s peak demand. This limit will increase to 0.5% on January 1, 2014. At least one-half of the utility’s available aggregate net metering capacity is reserved for systems generating electricity using renewables.

As you can see from the following chart, the net metering program has grown substantially since it’s inception in 1999, growing from only 2 new customers in 1999 to 243 in 2008.

Of those involved in PSE’s net metering program thus far, a vast majority of the customers utilize solar PV systems to generate their grid-tied energy.  Of the projects in operation as of April 17, 2008, 243 were solar arrays, 4 were a combination of both solar and wind, 4 were powered by micro-hydro, and 3 were wind turbines.

In addition to state and national rebates and incentives, many local utility companies also offer rebate and loan programs to promote the installation of solar PV systems and other renewable energy systems such as wind power, as well as offering credits for the use of installing energy efficient windows, insulation, heat pumps, lighting, refrigerators, washers and dryers.

Private investors and communities are also getting involved in the expansion of renewable energy usage by creating large-scale solar projects, essentially creating their own, localized power production plants.  Like the home/business model, these large-scale or community power production facilities also receive incentives, in fact in excess of the substantial incentives being paid to individual net metering customers. Examples of these larger sites are the proposed Teanaway Solar Reserve and the Ellensburg Community Solar Project.

25 by 25

Renewables in Rural Washington

Another force in the move towards more solar and renewable energy in the State of Washington is the “25x25” project, the goal of which is to produce 25 percent of our country’s energy from renewable resources like wind, solar, and biofuels by the year 2025.

A group of volunteer farm leaders first envisioned the goal of 25x25, and it quickly gained the support of a broad cross-section of the agriculture and forestry communities. Now leaders from business, labor, conservation and religious groups are joining this alliance as well. 25x25 is supported financially by the Energy Future Coalition, a non-partisan public policy initiative funded by foundations, and is endorsed by Washington politicians Sen. Cantwell, Rep. Inslee, and Rep. McMorris-Rodgers. The vision includes:

    * Bring new technologies to market and save consumers money.   
    * Reduce our dependence on oil from the Middle East.  
    * Create good new jobs in rural America.  
    * Clean up the air and help reduce urban smog and greenhouse gas emissions.

A national study undertaken by the University of Tennessee Department of Agricultural Economics (December 15, 2008) shows that if America’s farms, ranches and forestlands are empowered with the policies and incentives needed to meet 25 percent of the nation’s energy needs with renewable resources – biofuels, biomass, wind energy, solar power, geothermal energy and hydropower – an estimated $700 billion in new, annual economic activity would be generated, and 4 million to 5 million new jobs would be created.

The USDA, with their REAP (Rural Energy for America Program) Grants, is offering direct funding for energy efficient and renewable power projects, feasibility studies, and loan guarantees.  The BIA (Bureau of Indian Affairs) also has grants and loan programs in place specifically to develop renewable power on Native reservations throughout Washington and the rest of the U.S.

When one looks at the enormous support that renewables such as solar power have gained over the years in Washington State, from individual homeowners to government agencies and policy makers, along with the immense increase in the overall solar PV market in the U.S. and around the world, one can see that the climate is right for Efficient Life Technologies, llc. to join an industry where in Washington, like the world, the demand continues to grow.