How to fund an energy efficiency project in California

April 20, 2016

In California, there are dozens of initiatives designed to help builders fund their energy efficiency projects. Understanding and taking advantage of these opportunities can have a major impact on not just contractors' expenses, but also on the invoices they pass on to their clients. Therefore, their benefits are twofold, as completing a project at a lower cost can do just as much to encourage future business as it can to support current efforts. 

To help you get started, here's a list of several of California's incentive programs that can help fund your energy efficiency project:

Energy Conservation Assistance Act Low Interest Loans: Since 1979, ECAA loans have provided more than $383 million to help more than 840 recipients pay for their energy efficiency efforts. Certain organizations, including public K-12 school districts and community colleges, are eligible for 0 percent interest loans, while cities, counties, special districts and public colleges and universities may qualify for interest rates as low as 1 percent. 

ECAA loans can be used for projects with proven energy or demand cost savings, including:

  • Building insulation
  • Energy management systems and equipment controls
  • Lighting system upgrades
  • Pumps and motors
  • Water and waste water treatment equipment. 

Efficiency Financing Program for Local Government, Hospitals, and Schools
This California Energy Commission program provides low-interest loans to help schools, hospitals and local governments pay for feasibility studies and install their energy-efficiency hardware. With about $40 million available in total funding, these loans can cover 100 percent of expenses for qualifying energy projects. 

School building projects are among those that can qualify for the most incentive programs. School building projects are among those that can qualify for incentive programs.

Savings By Design
Administered by PG&E, SCE, SDG&E, SoCal Gas and the Sacramento Municipal Utility District, the Savings By Design program provides funding for both new construction and major renovations. Available for those using integrated design analysis on a building as a whole, or looking at one system in particular, the program offers incentives for both owners and design teams. Depending on the project scope, funding can range from $500 to as much as $150,000. 

On-Bill Financing
State IOUs PG&E, SCE, SDG&E, and SoCal Gas offer government groups 0 percent, no-fee loans to cover the cost of qualified energy-efficiency measures installed under specified utility incentive programs. Loans typically go up to $250,000, although they can extend up to $1 million in certain conditions, according to Energy.gov. Paid back on the monthly utility bill for up to ten years, the payments are sometimes even lower than the month's energy savings

Statewide Customized Offering for Business
Businesses hoping to improve their energy efficiency by upgrading their lighting, air conditioning, refrigeration or natural gas equipment may be eligible for financial incentives from PG&E, SCE, SDG&E, SoCal Gas and SWG. 

Working with an energy consulting company can help you not only make the most of the funding you have available, but can also help you identify and qualify for any relevant incentives you may be eligible for. For more advice on how to pay for your energy solutions, contact Benningfield Group today.