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April 25, 2012

Clean Energy Financial Innovation Program An ARRA-SEP Supported Credit Enhancement and Financing Program. April 25, 2012. Agenda. About the Clean Energy Finance and Investment Authority Overview of the ARRA-SEP Financing Program Question and Answer . 2.

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April 25, 2012

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  1. Clean Energy Financial Innovation ProgramAn ARRA-SEP Supported Credit Enhancement and Financing Program April 25, 2012

  2. Agenda • About the Clean Energy Finance and Investment Authority • Overview of the ARRA-SEP Financing Program • Question and Answer 2

  3. About the OrganizationClean Energy Finance and Investment Authority • Quasi-public organization – created by PA 11-80 and we are the successor to the Connecticut Clean Energy Fund • Focus – invest in clean energy (i.e. renewable energy, energy efficiency, and alternative fuel vehicles and infrastructure) • Support – financed by a $0.001/kWh surcharge on electric ratepayer bills that provides approximately $30 million a year for investments, federal competitive solicitations and non-competitive resources (i.e. ARRA-SEP), private capital, etc. 3

  4. About the OrganizationStrategic Vision and Mission Support the Governor’s and legislature’s energy strategy to achieve cleaner, cheaper and more reliable sources of energy while creating jobs and supporting local economic development 4

  5. About the OrganizationStrategic Goals 5

  6. About the OrganizationStrategic Goals (cont’d) 6

  7. About the OrganizationMeasures of Success 7

  8. OverviewARRA-SEP Financing Programs • ARRA-SEP grant to Connecticut – $38.50 million to DEEP to support renewable energy, energy efficiency, alternative fuel vehicles and infrastructure and building code and operator training • Clean Energy Fund (CCEF) – $20.00 million to support four grant programs • New Programs – solar thermal and geothermal • Existing Programs – solar PV and fuel cells • Clean Energy Finance and Investment Authority (CEFIA) – worked with DEEP and repurposed $8.25 million of CCEF grant programs to support credit enhancement programs – of which $1.25 million is for the Clean Energy Financial Innovation Program 8

  9. OverviewClean Energy Defined • Statute – C.G.S. Section 16-245n(a) • Renewable Energy – solar PV, solar hot water systems, geothermal, micro fuel cells, and micro CHP (does not include small wind) • Energy Efficiency – lighting, duct and air sealing, insulation, furnace replacement, boiler replacement, window replacement, AC system replacement, heat pumps, and other energy efficiency measures (i.e. conversion of heating oil to natural gas) • Other – EV recharging station 9

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  11. Undertake Energy EfficiencyQuick payback to finance solar PV 11

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  13. OverviewClean Energy Financial Innovation Program • Request for Proposals – competitive solicitation • Purposes • Create a competition that incites financial innovation around residential clean energy financing • Transition away from the subsidy model towards credit enhancements and financing of clean energy • Funding Available – $1,250,000 to support up to 3 pilot programs • Use of Funds – to support credit enhancements (i.e. loan loss reserves, interest rate buy-down, third party insurance) in residential clean energy 13

  14. OverviewTypes of Pilot Programs • Extend credit or offer micro-loans to currently underserved low and moderate income households to earn CRA credits • Create insurance products that guarantees the energy savings to demonstrate the value of energy efficiency and renewable energy savings to cover debt service payments and reduce project risks • Provide loans to automobile owners to install electric vehicle recharging stations in combination with renewable energy resources at home • Proposers can also create a financial product intended to solve a problem in the residential sector, just describe the problem you are trying to solve through the pilot program 14

  15. OverviewRFP Timeline • RFP Issued – April 12, 2012 • Pre-Bid Conference Call – April 25, 2012 • Proposals Due – May 30, 2012 • Projects Selected by CEFIA for Negotiation – June 13, 2012 • Target Date to Complete Program Agreement Negotiations – July 9, 2012 • CEFIA BOD Approval of Program Agreements – July 20, 2012 • Target Launch of the Pilot Program(s) – Fall of 2012 15

  16. OverviewProposal Outline • Cover letter • Proposal form • Program description • Program approach – including flow chart • Qualifications and experience, officers and staffing • Collaborative services, technical assistance, and training needs from CEFIA (if necessary) • Additional statements or materials • 15-page limit 16

  17. OverviewSample Flow Chart TaxEquityCo, LLC (100% Equity) AdminCo,LLC (Program Admin) ITC Equity Sells Note Originates Note DeveloperCo, LLC (Developer) CT Solar Lease, LLC CCEF - DebtCo (Debt and Incentive) Rebate/Incentive Management Fee Services Debt Service Approved Installers Payment Lease Home Owner Installer (Approved by CCEF) Solar PV System REFERENCES Design – 5.5% interest rate,secured, 200% of median income Consumer Credit Guidelines – 640 if salaried, 680 if self-employed for at least 2 years, 720 if self-employed less than 2 years, no bankruptcy in last 7 years, debt to income or monthly obligations to monthly income 50% for all credit scores Performance – 850 loans, 6.0 kW AC average system size, from $5,320/kW rebate in 2009 to $2,731/kW rebate in 2011, and 2 defaults. 17

  18. OverviewSelection Process Criteria • Potential of the proposed strategy to attract and deploy capital • Feasibility and expected performance of the strategy • Simplicity and ease of administration of the proposed strategy and coordination with program partners • Skills of the staff, services and level of effort the applicant will provide to make this program a success • Ability to reach customers and support contractors • Additional statements, ideas and materials that demonstrate the applicant understands the program goals and how the applicant could implement the program 18

  19. OverviewFreedom of Information CONFIDENTIAL 19

  20. Question and Answer Q&A 20

  21. Visit us online at www.ctcleanenergy.com 865 Brook Street Rocky Hill, CT 06067-3444 (860) 257–2170 21

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