Paul Markowitz, Program Manager
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Efficiency as an Investment
• Money used for energy efficiency is an investment -- not an expense
• To invest -- to commit money in order to gain a financial return
 To spend -- to use up or pay out
• Energy investments --return on investment (ROI) comes from future energy savings
• Compare energy investments with other investment options, e.g. savings accounts
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“ROI” vs. “Payback period”
• “ Return on investment” (ROI) is a better measure of value than “ payback period”
• Payback = time needed to generate savings equal to the initial investment
• ROI vs. payback
 20-year payback = 5% return on investment
 10-year payback =10% return on investment
• Major energy retrofits usually have a ROI of 10-20%
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Positive Cash Flow
• “Total cost” is frequently less important than “positive cash flow”
• Longer-term financing
 Aligns the period of payment with the period of the savings (life of the measures)
 Allows for most or all of the required investment to be paid out of savings
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Align the period of payment with the period of the savings
Annual Costs

Annual
Savings

Annual Costs

Eight Year Loan Period
Annual Savings

Twelve-Year Loan Period
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The Hand Home
Financing Scenario
(7 year personal loan at 7.50% interest)
($8,277) Total project cost/amount borrowed
Total interest
Total cost
Annual energy savings
Total energy savings during repayment period
Total cash flow during repayment period
($2,387)
($10, 664)
$2,422
$16, 954
$6,290
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Paying for Efficiency Investments
• Weatherization Assistance Program – for qualifying households
• Incentives from Efficiency Vermont pay for a portion of the work – up to $2,000 per home
• Low-interest loans from participating lenders (credit unions and banks) 4%-9%
• Federal tax credits (up to $500) for 10% of cost of weatherization materials (insulation, spray foam etc.)
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Weatherization Assistance Program
• Free diagnostic and improvement services for low-income Vermonters, operated by Community
Action Agencies and other agencies
• Call 211 – State hot-line
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• Up to $2,000 in incentives from Efficiency Vermont for qualifying projects
• Extra $500 bonus for projects completed by August
31, 2013
• Covers principally thermal efficiency improvements
(insulation and air sealing) and improvements to heating system
• Hire participating contractor certified by Building
Performance Institute
• Also $5000/building for multi-family buildings
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Other Programs
• Vermont Gas: Vermont Gas provides free energy audits and covers 1/3 to 1/2 the cost of retrofits for qualifying homes
• NeighborWorks program: offers low-interest loans for all income levels
• Numerous Vermont banks and credit unions: offering home equity (secured) and personal loans
(unsecured)
• Do-it-Yourself Home Energy Efficiency Program: eligible for same incentives as regular Home
Performance program
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