Pennsylvania is now part of a public-private partnership aimed at bringing low-cost financing on a large scale to home energy efficiency improvement.
The Warehouse for Energy Efficiency Loans — or WHEEL — creates a new asset class of energy efficiency-related securities, according to the state Treasury Department. The program makes it easier to aggregate individual residential energy improvement loans and sell them on the secondary market. WHEEL will result in additional inexpensive capital becoming available for more loans to homeowners, according to a department news release.
The program opens the residential energy efficiency finance market to large institutional investors — bringing low-cost capital to loans for home energy efficiency improvements, according to a WHEEL news release. Loans will be made to consumers and the investment grade securities available to institutional investors.
“WHEEL is designed to serve a $200 billion unmet need for financing in the home energy efficiency market,” Cisco DeVries, CEO of WHEEL partner Renewable Funding, said in the release. “Now, we are making it easier for consumers and contractors to utilize affordable loans, supported by their state or utility, to make energy efficiency improvements.”
WHEEL is based on Pennsylvania’s Keystone Home Energy Loan Program — or HELP. Created in 2006, Keystone HELP has made more than 13,000 low-cost loans in Pennsylvania for high-efficiency furnace or boiler replacements, geothermal heating and cooling units, insulation installations, door and window replacements, and other measures, according to the state Treasury Department.
Last year, the Treasury Department sold about 4,700 HELP loans worth more than $28 million to investors in the first such transaction of its type in the country, according to the department.
With the state Treasury Department, WHEEL is partnering with financial firm Citigroup; Renewable Funding; the Energy Programs Consortium; National Association of State Energy Officials and the U.S. Department of Energy. Kentucky has also joined as a charter member, according to WHEEL. In addition, key financial support came from the Energy, Ford, Rockefeller, Surdna and William Penn foundations.