A New Financing Model to Help Homeowners Save Money AND Energy

An interview with Lori Bamberger, Founder of Saving Neighborhood Energy to Generate Neighborhood Wealth (SNEGNW)

What does SNEGNW do?

We are an innovative financing and energy intermediary organization that helps low- and middle-income families access energy savings and the financing necessary to achieve them, while providing a cutting-edge incentive to change their energy consumption behavior after the retrofit in the form of matched funding.

What problem are you solving?

20% of our nation’s harmful carbon emissions come from single-family homes. The oldest, least efficient homes are owned by the lowest-income population, and it’s expensive for people to upgrade and make their homes more energy-efficient, even though they will save money on their energy bills.

We enable low-, moderate-, and middle-income homeowners who don’t qualify for free grants to borrow money from a private bank, and repay the loan charge on the energy bill every month, so these households can upgrade their homes. In California, this means teachers, fire fighters, social service workers can amortize a significant energy system replacement as a relatively small line item on their energy bill.

How do you accomplish that?

We use a financing model called OBR (Online Bill Repayment ). Families finance their energy-efficiency upgrades with a private bank that works in partnership with a utility to put the loan charge (with an average loan size of $10,000) on their utility bill and repay it over time. Their energy bill goes down after the upgrades, since the systems are designed to consume less energy, providing the money (energy savings) to repay the loan.  We currently are working with three pilot sites, which would encompass 1500 homes. Ours are the very first pilots to launch in all of California, and we are designing them to be scalable and replicable across the State and nation.

Our second product, the Matched Energy Savings Account (MESA) is tied to the OBR borrower household. The MESA is effectively a performance-based rebate because it happens after the retrofit. To encourage people to participate and ensure that the savings materialize, we will provide an asset building/individual development account (like a 401K), where a nonprofit matches the savings of the homeowner. Many places in the US are interested in this model of financing, but we are the first to begin developing it. We are currently in the process of raising the money for the matching funds.

How did you decide to start this project?

After working for seven years at the intersection of energy efficiency/financing/affordable housing, the timing was finally right for OBR financing, and the San Francisco, Ford, and Energy Foundations asked me to test the feasibility of the model in California.  It’s innovative because nobody has really figured out a good way to bring unsecured financing to this population.

Why did you want a fiscal sponsor, and how did you choose TCI?

We didn’t have time to incorporate as a nonprofit. We are so teeny, doing so many things, that having an entity taking care of the administrative side is critical. TCI was highly recommended from important sources, and it felt like the best fit. It’s a great organization, with great leadership, and a great reputation.

What is the hardest part of your job?

Raising capital and aligning partners in an environment where we weren’t sure if we were going to be able to move forward. We were smart, and for our first pilot we chose municipal utility partners who were able to move forward more quickly than heavily regulated investor-owned utilities. Our Matched Energy Savings Account is a brand-new exciting concept and we need to fund it quickly – that’s a challenge.

What do you love about your job?

I love seeing an idea become reality and helping families do good for the environment and do good for their bottom line at the same time!