The Colorado Clean Energy Fund recently partnered with Fort Collins Utilities that allows low-and moderate-income residents to obtain loans to upgrade their homes’ efficiency through the EPIC Homes program. EPIC Homes provides property owners in Fort Collins with affordable, long-term loans for home improvement projects, such as new HVAC, air sealing, windows, and ventilation systems. These projects reduce the utility bills and save customers money.
EPIC Homes plans to “find, finance, and fix” 10,000 energy inefficient single-family homes and rental properties in Fort Collins over the coming years.
This is particularly important for low-and moderate-income homeowners who pay a disproportionate amount of their household income on utility expenses, sometimes in excess of 10% of their total annual income. The Colorado Clean Energy Fund will seek to replicate this innovative program in utility territories across Colorado.
The mechanics of the EPIC Homes program are fairly simple: The participating property owner obtains an Energy Assessment (i.e. energy audit) and identifies a cost-effective energy improvement project, applies to Fort Collins Utilities for funding, and, once Fort Collins Utilities approves the scope of work and underwrites the borrower, the utility distributes the EPIC Home loan to a contractor to perform the work and the property owner repays the loan over time through a separate line item on his/her utility bill.
The benefits produced by EPIC Homes are even simpler: At the end of the day, this program saves property owners money by reducing their utility expenses and produces healthier and more comfortable living spaces. And, unlike traditional consumer lending products, EPIC Homes utilizes a more inclusive underwriting process that allows low-and moderate-income homeowners and renters to participate in the program, even if they do not have a perfect credit score.
Fort Collins Utilities borrowed money by leveraging the City’s borrowing capacity to support EPIC Homes. Fort Collins Utilities hoped to procure a 15-year loan so that it could, in turn, offer 15-year loan terms to EPIC Home customers, but this proved to be challenging. That is when the Colorado Clean Energy Fund stepped in. The Colorado Clean Energy Fund partnered with Fort Collins Utilities and helped to analyze the landscape of potential capital providers and, ultimately, identify, negotiate, and secure a 15-year loan from Vectra Bank. Looking ahead, the Colorado Clean Energy Fund will provide technical assistance and arrange the loan capital on behalf of utilities that are interested in offering EPIC Homes to their customers.
Eleven percent of Coloradoans spend more than 10% of their total annual income towards energy costs alone. Thirty percent of Coloradoans spend more than 5% of their total annual income on their energy bills. This is tragic, especially considering the rising costs associated with living in Colorado. This essentially means that in order to keep the lights on, many Coloradoan families will need to make difficult decisions, like whether they should pay for electricity or healthcare.
Stay tuned for a future blog about Colorado Clean Energy Fund’s plan to expand EPIC Homes across Colorado.