Better Buildings Case Competition 2014. SMART POWER Georgetown University McDonough School of Business David Gomez, Ian Huang, Caitlyn McAllister, Angel Prado, Devon Weiss. Agenda. SMART POWER Team SMART POWER Proposal Overview
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Georgetown University McDonough School of Business
David Gomez, Ian Huang, Caitlyn McAllister, Angel Prado, Devon Weiss
President Obama’s Climate Action Plan sets a goal of 100 megawatts of renewable energy capacity to be installed within federally subsidized housing by 2020
The optimal solution will:
SMART POWER’s proposal meets these benchmarks by providing HUD with a comprehensive program that:
The combination of current HUD subsidy terms, capital structures, and project financing hindrances, creates a split incentive market failure limiting adoption of renewable projects across the HUD-assisted multifamily portfolio
A portfolio level solution to address HUD’s split incentive market failure and assist in meeting Climate Action Plan goals will require three main components:
The SMART POWER Solution proposes the adoption of a three step process identify, analyze, and fund energy efficiency and distributed generation projects.
Project Identification can be done objectively at the portfolio level through the use of utility level data and commercially available analytic tools from WEGOwise, an online tool for monitoring and analyzing utility usage.
Objective analysis will direct limited resources to projects with the highest potential return.
WEGOwise is an on-line tool for monitoring and analyzing the energy use of multifamily and single family housing with a focus on the user-friendly reports, accompanied by helpful recommendations and summaries to guide the user to improved performance for a single building or a portfolio of buildings.
Project Development can be optimized for resiliency, environmental, or economic goals through the use of the Hilltop Energy Partners’ Hilltop Energy Efficiency Diagnostic (HEED) Application.
HEEDanalyzes data from numerous energy monitoring or utility level data collection services and provides optimal recommendations for energy efficiency upgrades and distributed generation projects based on locality, baseline power usage, local utility costs, and other data points.
HEED standardizes recommendations across the portfolio, eliminating recommendation bias and creating a list of “conforming” projects within stated size and payback period limits.
The HEED Application is Hilltop Energy Partner’s proprietary diagnostic tool that leverages inputs from standard information providers such as WEGOwise, First Fuel, or building energy monitoring systems and incorporates this data into our matrix of information on solutions. The tool produces a more refined and actionable report that the customer can then act upon.
Hilltop Energy Efficiency Diagnostic(HEED)Application
External Project Finance can be arranged through the creation of Collateralized Energy Backed Securities (CEBS), the securitization of multiple distributed generation sites to create a third party financing market similar to that seen with collateralized mortgage backed securities.
The CEBS model allows project developers and/or installation firms the ability to free and redeploy capital and provides the investment community a means of supporting growth in renewables while earning a market return.
Government backing through HUD or existing government sponsored entities (GSE’s) will increase credit ratings of these securities, but private sector non-GSE backed CEBS are a viable option as well.
Smart Power CEBS Deal Structure
Major benefits of introducing CEBS:
This three step process will facilitate private sector project development by:
Properties will remain connected to the existing grid and any excess generation capacity can be rerouted through net metering, alleviating power utilities demand during peak times and strengthening the resiliency of the grid as a whole.