DOE Accelerates the Trajectory of Affordable Clean Energy

Amsterdam, New York

What is the federal government doing to catalyze access to clean energy? Last year, the United States Department of Energy (DOE) launched two programs that work side by side: the Clean Energy Savings for All initiative and the Clean Energy for Low-Income Communities Accelerator. These programs attempt to identify and promote models that work for low-to-moderate-income communities in urban and rural areas in every region of the country.

The DOE’s Office of Energy Efficiency & Renewable Energy is one of the key federal agencies participating in the initiative. The DOE's property assessed clean energy (PACE) guidelines and the accelerator are both included as the DOE's input to the initiative. The DOE launched the accelerator in May.

The two-year-long initiative aims to bring together more than 40 partners from across state governments and NGOs.

The broad goal of the initiative is to help low-income households, which spend a relatively high proportion of their household funds on energy bills, reduce their energy burden through energy efficiency and through renewable energy.

This goal also supports national energy independence and reduction of air pollution.

After the first two years of rolling out the accelerator, the DOE hopes to consolidate the lessons learned into a playbook. Its staff have also been collecting information on energy savings and quantifying emissions and economic benefits arising from these projects and initiatives.

PACE is a significant component of the DOE's input to the initiative. The accelerator also plans to leverage PACE. The qualifying technologies for PACE upgrades are loosely defined. The DOE has issued best-practice guidelines on program design for residential PACE programs. Several special enhancements have been made for PACE targeting homeowners who want to undertake upgrades.

The DOE has also been a key partner in the Low-Income Housing Energy Assistance Program (LIHEAP). This program is run by the Department of Housing and Human Services (HHS). These funds are typically used for paying down energy bills.

Danielle Byrnett, senior policy advisor in the Office of Energy Efficiency & Renewable Energy, spoke with Clean Energy Finance Forum in October. At the time of the interview, the initiative was newly launched and plans were underway to expand its reach. Byrnett said the overarching goal of the initiative was to bring 1 GW of solar to low-to-moderate-income households by 2020. She said energy efficiency would be an important component of its work.

Byrnett confirmed in an email in February that these two programs are still underway in the new administration.

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Byrnett: We expect that by the end of this two-year time frame, we will be able to share lots of lessons learned and a variety of widely applicable strategies for solving the very challenging problems around effective consumer outreach and customer engagement. [This would include] having financing or funding that can actually pay for these measures and make sure that quality work is happening.

So I think this is among the most tangible aspects of efforts that are directly attempting to work on addressing problems and the barriers at the local level and coming up with new models and strategies. PACE will be one of those strategies in addition to others such as on-bill financing, which your colleagues have written about extensively, and other models as well.

CEFF: In the longer term, how will these two-year achievements feed into other processes?

Byrnett: We anticipate that at the local and state level, this will be a catalyst to think of ways of sourcing longer-term funding.

At the federal level, we are going to be collecting all this information and consolidating a toolkit that will help other communities hopefully leapfrog over some of the challenges that are inevitable in blazing the trail.

This will make tools and templates available that will help them implement programs suitable for their localities.

CEFF: Does the DOE prescribe specific technology types or upgrades for PACE – or do any technology types potentially qualify for PACE financing?

Byrnett: Our guidelines require every state or locality that is authorizing PACE to come up with an eligible product list. And that eligible product list should be relying on national standards for defining what measures, products or projects relate to PACE energy.

For example, reference to Energy Star or registration for energy efficiency has labeled national standards that identify energy-efficiency products. It is the primary way to do specific cost-effective weatherization measures which include air-insulation in homes.

For these aspects, we would recommend borrowers to use an eligible product list. Broadly speaking, we are very interested in any appropriately verified technology that will save energy.

CEFF: Can you speak more about the inclusion criteria for states in both the accelerator and the initiative?

Byrnett: The Clean Energy Savings for All initiative does not have specific state-level partners. No one was selected or chosen. This is a national multi-agency initiative, so we will be reaching out to state and local partners.

For the residential PACE, we have a national-level guideline and as far as technical assistance, we will be relying on states to come forward to say they are interested in being a part of it. We will serve as many but not all states who request assistance.

The National Association for State Energy Officials - NASEO - is going to be taking the lead on some of that technical assistance. It is their mission to serve all states.

And then with the Clean Energy for Low-income Communities Accelerator, we similarly invited states and localities who were interested in and committed to developing these action plans. We did not turn anyone away. We’re happy to say that there is a good range of geographic distribution across the country.

CEFF: Does the DOE actively collect information on energy savings? I’d like to understand how you quantifying emissions and economic savings that result from these projects and initiatives.

Byrnett: The DOE tracks impacts on a periodic basis – like the end of the two-year accelerator. We will measure energy savings impacts as a result of our efforts and have third-party evaluations conducted.

We will, individually and across different programs at our agencies, be tracking the impact of these efforts and then, at the request of the White House, we will put all that together. We’ll add it up on a regular basis to be able to identify progress towards our ultimate goal of 1 GW of solar installations.

CEFF: PACE seems to be a significant component of the DOE's input to the initiative. What is the DOE doing in terms of PACE program design and implementation?

Byrnett: The guidelines are based on the experiences that we have seen on the ground.

We are particularly attentive to analyses of energy savings and consumer protection to make sure that consumers who want to take on this assessment are aware of what it is that they're doing.

We are also going to be offering technical assistance to states who want to move ahead with expanding or starting PACE programs.

CEFF: What special enhancements have been made to improve the uptake of PACE efficiency upgrades in LMI households?

Byrnett: The guidelines that we are writing are for delivering PACE to any population. But what we have done is to look at the guidelines to make sure that in an effort to serve all income levels, it's serving residents appropriately.

We have added a section about considerations for reaching out to and serving low-income households. We also added a variety of provisions that would apply broadly – and, of course, in a non-discriminatory way – that we think will make sure that low-income households who are not in the best position to take on a PACE assessment will not be put in a position of doing so.

For PACE, the savings can pay for the assessment itself. So that has numerous benefits for all homeowners. And especially for low-income homeowners who won't have ready cash available on hand at the start of a project.

CEFF: Do the new PACE guidelines address risks related to credit scores?

Byrnett: Our understanding of PACE financing is that credit scores are not routinely checked - that is just the case.

The typical evaluation of the eligibility relates to the mortgage itself - not credit scores. One of the pieces that we have added to the guidelines is actually to check income and debt obligations for any potential borrowers.

And that's really to protect them - to make sure that they're taking on a PACE assessment that is going to require paying back the financing over the 10-to-20-year term.

Specifically, tax assessments are collected either on the monthly or twice-yearly basis, so that requires commitment. So that approach to not getting FICO scores is retained. But we have added a recommendation to at least take a look at and have some basic evaluation of incumbent debt obligation.

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