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Paying for Energy Efficiency Paul Markowitz, Program Manager

Paying for Energy Efficiency Paul Markowitz, Program Manager. Efficiency as an Investment. Money used for energy efficiency is an investment -- not an expense To invest -- to commit money in order to gain a financial return To spend -- to use up or pay out

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Paying for Energy Efficiency Paul Markowitz, Program Manager

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  1. Paying for Energy EfficiencyPaul Markowitz, Program Manager

  2. Efficiency as an Investment • Money used for energy efficiency is an investment -- not an expense • To invest -- to commit money in order to gain a financial return • To spend -- to use up or pay out • Energy investments --return on investment (ROI) comes from future energy savings • Compare energy investments with other investment options, e.g. savings accounts 2

  3. “ROI” vs. “Payback period” • “Return on investment” (ROI) is a better measure of value than “payback period” • Payback = time needed to generate savings equal to the initial investment • ROI vs. payback • 20-year payback = 5% return on investment • 10-year payback =10% return on investment • Major energy retrofits usually have a ROI of 10-20%

  4. Positive Cash Flow • “Total cost” is frequently less important than “positive cash flow” • Longer-term financing • Aligns the period of payment with the period of the savings (life of the measures) • Allows for most or all of the required investment to be paid out of savings 4

  5. Align the period of payment with the period of the savings Annual Costs  Annual Savings  Eight Year Loan Period Annual Savings Annual Costs   Twelve-Year Loan Period 5

  6. The Hand Home

  7. Paying for Efficiency Investments • Weatherization Assistance Program – for qualifying households • Incentives from Efficiency Vermont pay for a portion of the work– up to $2,000 per home • Low-interest loans from participating lenders (credit unions and banks) 4%-9% • Federal tax credits (up to $500) for 10% of cost of weatherization materials (insulation, spray foam etc.)

  8. Weatherization Assistance Program • Free diagnostic and improvement services for low-income Vermonters, operated by Community Action Agencies and other agencies • Call 211 – State hot-line

  9. Home Performance with ENERGY STAR • Up to $2,000 in incentives from Efficiency Vermont for qualifying projects • Extra $500 bonus for projects completed by August 31, 2013 • Covers principally thermal efficiency improvements (insulation and air sealing) and improvements to heating system • Hire participating contractor certified by Building Performance Institute • Also $5000/building for multi-family buildings

  10. Other Programs • Vermont Gas: Vermont Gas provides free energy audits and covers 1/3 to 1/2 the cost of retrofits for qualifying homes • NeighborWorks program: offers low-interest loans for all income levels • Numerous Vermont banks and credit unions: offering home equity (secured) and personal loans (unsecured) • Do-it-Yourself Home Energy Efficiency Program: eligible for same incentives as regular Home Performance program

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