Chris Williams - Maine Heat Pump Rental
There have been many attempts at financing renewable energy and energy efficiency projects for residential homeowners. The logic is simple. The technologies provide amazing, low-risk, long term rewards but cost a lot of cash upfront. A homeowner might need to invest $5,000 in cash to save $1,500 per year. These returns are amazing, but you can't take advantage if you don't have $5,000 in cash.
The thought behind lending for these energy projects is simple. Why not lend people the money to get the services completed at no out-of-pocket expense to them and have them pay back the debt with their energy savings?
A small number of these programs have worked and most have failed to get a lot of participation.
I'm going to provide some examples of the strategies that have worked, those that have failed, and describe how we're bringing a successful heat pump rental program to the Maine market.
If we look at the most successful strategies on the renewable energy side, the clear winter is the residential solar PPA or lease. The model has led to an explosion of residential solar in the United States, it's one of the fastest growing industries in the US with near 100% growth each year for the past few years. It's catching on because it's simple, easy and clear for the consumer.
On the residential renewable thermal (biomass, solar thermal and heat pumps) or energy efficiency, few programs have seen significant participation.
Some bank are providing loans, state agencies are starting to provide PACE financing and other simple debt products. All of these programs should work in theory, the math works and homeowners will save money. However, none have received a large amount of participation.
Successful Lending is All About a Simple and Fast Process
There's one program, a Cold Climate Heat Pump Rental Program, run by Green Mountain Power in Vermont that was extremely successful in providing air source heat pumps (either a renewable thermal technology or energy efficiency, depending on how you define it) to their members for no money down.
The program rented out over 200 units in less than one month. All of these units are offsetting extremely expensive heating source, oil, propane, and electric baseboard, so it's beneficial to the property owners and the utility.
If you ever tried to use one of the "non-successful" programs to utilize renewable thermal technology or energy efficiency in your home, you would understand exactly why they're not being adopted. The time and cost to actually use the funds is substantial and the process and timeline is extremely unclear.
Yes, once the work is done it's amazing and can save property owners lots of money. But the process to get those funds is horrible. There's tons of paperwork. It can take months, and tens of hours of work, to get approved and use the funds.
Here's the 5 reasons why the Green Mountain Power program worked. This is the exact same program that we're bring to the Maine market with our Maine Heat Pump Rental Program.
Here are the key characteristics of a successful lending program.
We'll limiting our 2014 Maine program to 30 homes and we'd love to work with you, read more about the program and how to sign up here.
There have been many attempts at financing renewable energy and energy efficiency projects for residential homeowners. The logic is simple. The technologies provide amazing, low-risk, long term rewards but cost a lot of cash upfront. A homeowner might need to invest $5,000 in cash to save $1,500 per year. These returns are amazing, but you can't take advantage if you don't have $5,000 in cash.
The thought behind lending for these energy projects is simple. Why not lend people the money to get the services completed at no out-of-pocket expense to them and have them pay back the debt with their energy savings?
A small number of these programs have worked and most have failed to get a lot of participation.
I'm going to provide some examples of the strategies that have worked, those that have failed, and describe how we're bringing a successful heat pump rental program to the Maine market.
If we look at the most successful strategies on the renewable energy side, the clear winter is the residential solar PPA or lease. The model has led to an explosion of residential solar in the United States, it's one of the fastest growing industries in the US with near 100% growth each year for the past few years. It's catching on because it's simple, easy and clear for the consumer.
On the residential renewable thermal (biomass, solar thermal and heat pumps) or energy efficiency, few programs have seen significant participation.
Some bank are providing loans, state agencies are starting to provide PACE financing and other simple debt products. All of these programs should work in theory, the math works and homeowners will save money. However, none have received a large amount of participation.
Successful Lending is All About a Simple and Fast Process
There's one program, a Cold Climate Heat Pump Rental Program, run by Green Mountain Power in Vermont that was extremely successful in providing air source heat pumps (either a renewable thermal technology or energy efficiency, depending on how you define it) to their members for no money down.
The program rented out over 200 units in less than one month. All of these units are offsetting extremely expensive heating source, oil, propane, and electric baseboard, so it's beneficial to the property owners and the utility.
If you ever tried to use one of the "non-successful" programs to utilize renewable thermal technology or energy efficiency in your home, you would understand exactly why they're not being adopted. The time and cost to actually use the funds is substantial and the process and timeline is extremely unclear.
Yes, once the work is done it's amazing and can save property owners lots of money. But the process to get those funds is horrible. There's tons of paperwork. It can take months, and tens of hours of work, to get approved and use the funds.
Here's the 5 reasons why the Green Mountain Power program worked. This is the exact same program that we're bring to the Maine market with our Maine Heat Pump Rental Program.
Here are the key characteristics of a successful lending program.
- Fast and straightforward. In the Green Mountain Power (GMP) program, the process took no more than 1 month from start to finish. In our program, we can install a heat pump in 2 weeks or less after being contacted by a homeowner.
- Simple paperwork. The GMP process included a single sheet of paperwork from the homeowner. The contract could be signed by the property owner in a minute. This makes things easy for the contractor and for the homeowner.
- No home audit. Because they are only provided a heat pump as a supplemental heat source, they didn't require an energy audit. This makes the process even shorter and more clear. Homeowners love this!
- Only supplemental heat. The program didn't provide heat pumps are the primary heating source for the home only as a supplemental heat source. This created a number of benefits. First, it means the program could be used in any home, no one needed to change their existing heating system. This decreased the risk in using the heat pump. Second, it meant that complex HVAC designers were not required to size the system. This decreased the time and cost to instal the equipment.
- Clear billing. The billing for the program was extremely simple. The homeowner pays a flat monthly fee based on the size of the heat pump they installed. Larger heat pumps will offset more oil but the rental fee is a little larger. In all cases, the homeowners electric cost to run the heat pump and rent the equipment is less than the cost of heating oil it replaces, so they save money.
We'll limiting our 2014 Maine program to 30 homes and we'd love to work with you, read more about the program and how to sign up here.