Financing for small business energy efficiency projects
The Small Business program will be available for:
- for-profit businesses
- nonprofit organizations
Like all the programs highlighted on GoGreen Financing, the Small Business program is designed to encourage growth in private market lending and features a credit enhancement to help financing entities mitigate risk. The flexibility of this program gives the customer the option to combine financing with utility rebates and incentives and gives finance companies the option to collect repayments through the customers’ energy bills.
Eligible customers
The Small Business program will be available for businesses and nonprofit organizations that meet one of the following size requirements
- 100 or fewer employees, or
- annual revenues of less than $15 million, or
- meet SBA small business size requirements
- Annual revenue limits range from $7.5 million to $37.5 million depending on industry
Finance companies and contractors who serve larger for-profit businesses and nonprofit organizations that do not meet the small business definition may be interested in the Nonresidential program.
Qualifying projects
At least 70% of the credit-enhanced financed amount must be Energy Savings Measures or demand response. Up to 30% of the credit-enhanced financed amount may fund nonenergy efficiency improvements. Financing for distributed generation (DG) improvements, like solar photovoltaic (PV), may be included but this portion of the financing will not be credit-enhanced.
Financial products supported
Products supported will include loans, leases, equipment financing agreements, service agreements and savings-based payment agreements up to $5 million.
Eligible properties
The eligible property may be owned or leased. The eligible property must receive electric and/or gas service from any of the following investor-owned utilities:*
- Pacific Gas and Electric Company (PG&E®)
- San Diego Gas & Electric Company (SDG&E®)
- Southern California Edison (SCE)
- Southern California Gas Company (SoCalGas®)
Repayment options
Finance companies can give customers the option to repay:
- Direct to the finance company
- Through the utility bill utilizing on-bill repayment
- On-bill repayment feature will be added to the program in 2019
For more information
For more information on the Small Business program, please contact the following program administration representative:
Jonathan Verhoef
jverhoef@sto.ca.gov
Fall 2018 program development
The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) is currently developing regulations for the Small Business program and there are opportunities for stakeholder input. Finance companies, project developers and contractors will be able to enroll in the program toward the end of the year. To learn more please click here to visit CAEATFA’s website for the latest updates.
Benefits for small businesses
- Credit enhancement allows lenders to offer attractive financing terms
- Both building owners and building tenants are eligible
- Broad list of measures qualify for financing
- Multiple paths to eligibility allow projects to be simple or highly customized
- Flexible financing allows up to 30% of financed amount to fund nonenergy efficiency improvements
- Potential to pay for efficiency upgrades through energy savings
Benefits for finance companies
- Mitigate credit risk through a loan loss reserve. The first $1 million of every enrolled financing product will receive a credit enhancement. Recover up to 90% of a charge-off.
- Partner with the State of California and investor-owned utilities to reach more customers
- Take advantage of a statewide marketing campaign and expand your reach in California
Benefits for contractors, ESCOs, and project developers
- Grow your business by offering customers attractive financing to complete energy efficiency upgrades
- Broad list of measures qualify for financing. Multiple paths to eligibility allow projects to be simple or highly customized
- Present your customers an attractive offer when OBF or commercial PACE won’t work
- Take advantage of a statewide marketing campaign
- Online interface allows for easy project entry and rapid qualification