GoGreen Financing background
GoGreen Financing is the public-facing platform of the California Hub for Energy Efficiency Financing (CHEEF).
The CHEEF is administered by the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA), a state agency housed in the State Treasurer’s Office. The CHEEF and a series of energy efficiency financing pilot programs were authorized by the California Public Utilities Commission (CPUC) and developed in collaboration with the investor-owned utilities:*
- Pacific Gas and Electric Company (PG&E®)
- Southern California Edison (SCE®)
- Southern California Gas Company (SoCalGas®)
- San Diego Gas & Electric Company (SDG&E®)
CHEEF and GoGreen Financing are paid for by investor-owned utility ratepayer program funds.
Additional important participants include finance companies (credit unions; banks; and specialty lenders, lease and service agreement providers) who bring the private capital needed to finance energy efficiency projects, and local contractors, who install the projects.
All of us are working together to make California cleaner and more energy efficient.
The State of California has ambitious goals to reduce greenhouse gas emissions and address climate change.
An important part of achieving these goals and improving air quality is reducing energy use in existing buildings. Billions of dollars are needed for the upgrades and there is simply not enough government or utility company funding to pay for these investments. The energy efficiency financing programs seek to:
- bring about broader and deeper energy savings than can be realized through traditional utility rebate and incentive programs
- make more private capital available for energy upgrades, so customers have access to financing to make their homes and businesses more comfortable and efficient
- help traditionally underserved customers access attractive financing
Customers benefit by accessing financing at attractive rates and terms that allow them to upgrade their buildings, reduce energy usage, and help to improve comfort and indoor air quality.
Finance companies benefit by attracting new members and customers, and being able to offer financial products with attractive terms or broadened underwriting criteria with the backing of a state-sponsored program.
Contractors and energy service companies (ESCOs) – small and large – benefit because accessible and attractive financing helps more customers take on deeper energy efficiency projects.
The State of California benefits because this financing program leads to more energy efficient buildings, bringing the State closer to meeting its energy savings goals.
Several of the pilot programs offer finance companies a credit enhancement in the form of a loss reserve. The loss reserve helps mitigate the risk for finance companies because they can access these funds in the case of a default. This allows the finance companies to offer more attractive terms – like lower rates, larger amounts to borrow, or longer time periods for repayment – than they otherwise could. The credit enhancement also allows finance companies to approve financing for a wider base of borrowers than they otherwise could – like homeowners with lower credit scores or small businesses with only a few years of operating history. Several of the financing pilot programs will also offer an on-bill repayment option. This allows customers to make payments for their financing charges on their utility bill. Finance companies can seek customers all over the State, and receive payments through the bills of all four investor-owned utilities conveniently through the CHEEF infrastructure.