By JP McNeill
“We’ve already invented most of the technology we need to help the world transition to a low-carbon energy system. The real issue is coming up with the innovative financing that will allow us to deploy that technology at scale.”
-Laszlo Varro, Chief Economist, International Energy Agency
Last month, Renovate America was honored to host a visit by Laszlo Varro, one of the world’s foremost experts on energy investment trends. Long after he led our team through a thought-provoking discussion of the challenges facing the global energy system, his observation about the importance of innovative financing continues to resonate.
Innovative financing that enables greater deployment of clean energy technology is at the heart of what Renovate America does through our Property Assessed Clean Energy (PACE) platform, the HERO Program.
HERO is making it possible for more Americans to lower their utility bills and improve the value of their homes while reducing the carbon emissions that are responsible for climate change. HERO enables individual homeowners to defer the upfront costs that are the most common barrier to energy-efficiency or renewable-energy upgrades. Given that the residential sector is responsible for nearly a fifth of all greenhouse-gas emissions, this becomes especially important.
As of this month, HERO has financed the installation of nearly $2 billion in energy efficiency, renewable energy and water efficiency improvements across more than 82,000 homes. When factoring in the useful life of the products that have been installed, these improvements are expected to save 12.4 billion kWh of energy – enough to power nearly a million Americans home for a year – and nearly 6.6 billion gallons of water – equivalent to meeting the water needs for one day of every person on the planet.
PACE programs like HERO don’t just facilitate the deployment of clean energy like solar, they facilitate the deployment of clean energy among segments of the population that traditionally have been priced out of these technologies. Here’s a good example: Since it launched in late 2011, the HERO Program has financed the installation of more than 125 megawatts of solar generating capacity. That’s more than all the rooftop solar that had been installed as of January in the following states, combined: Alaska, North Dakota, South Dakota, Nebraska, Mississippi, Wyoming, Alabama, Oklahoma, West Virginia, Kansas, Arkansas, Idaho, Montana, South Carolina, Kentucky, Rhode Island, Indiana. Maine, Illinois and Minnesota. The amount of HERO-financed solar is important in its own right, but it’s also important to look at where that solar is being deployed. Our estimates show that the median annual income for a California household that used HERO to finance rooftop solar is below $64,000. By contrast, the median annual income for a California household that financed solar using more traditional means, such as leasing, is more than $70,000.
The simple fact is that PACE is helping to expand access to clean-energy improvements for all Americans – not just the well-off – at no cost to public budgets, which is why leaders at all levels of government are embracing it. No other existing form of conventional financing has shown this level of promise or the ability to scale up – and, as a result, no other existing form of conventional financing can rival PACE when it comes to helping our nation meet its clean-energy and climate goals.
In addition to making access to clean energy possible for more Americans, HERO gives peace of mind. HERO works closely with local governments in the communities in which it operates to help ensure stringent consumer protections that exceed those offered by any other form of consumer financing. In an upcoming post, I’ll share more information about the steps we’re taking to make our consumer safeguards even more robust.
JP McNeill is founder and CEO of Renovate America.