Nearly two years after it launched amid national media attention, Santa Rosa's Ygrene Energy Fund has financed its first projects for making older buildings green.
The company, which fashioned its business after a program pioneered by the County of Sonoma, is providing financing and administration to retrofit homes and commercial buildings in Sacramento and Miami. The public/private programs allow property owners to install solar electric systems and other energy- and water-saving improvements, with borrowers repaying the debt on their property tax bills.
Ygrene officials have set an ambitious goal. The company hopes to retrofit 100,000 homes and commercial properties in the next five years.
Such an accomplishment would amount to more than $2 billion in projects, said Ygrene CEO Stacey Lawson. She said it would create 45,000 jobs and reduce greenhouse emissions by 360,000 tons — equivalent to taking more than 75,000 cars off the road a year.
"I feel like this is an enormous opportunity to have a big social benefit," said Lawson, a 2012 North Coast congressional candidate who has 20 years experience in manufacturing, technology and clean energy. "And we are creating thousands of jobs."
Ygrene made headlines in 2011 when The New York Times highlighted the company's collaboration with such high-powered allies as Lockheed Martin and its endorsement by the Carbon War Room, the nonprofit environmental group co-founded by British billionaire Richard Branson. Supporters said Ygrene's approach offers an innovative way to make billions of dollars worth of green improvements with no up-front costs to property owners.
But even then, the idea of linking property taxes to home retrofits had a dark cloud hanging overhead. And the outlook became even more uncertain this year after federal housing officials won a legal battle against Sonoma County that strengthened their opposition to such financing — an approach, they claim, that saddles mortgage lenders with added risks.
Amid the uncertainty, climate change activists and government officials already are exploring other ways to finance retrofit projects. One approach, now under consideration by both Marin County and the state Public Utilities Commission, would use utility bills, rather than property taxes, as the means for repaying the privately financed debt used to finance to the improvements.
Which method proves the more successful remains to be seen.
The financing approach used by both Ygrene and Sonoma County is known as "property assessed clean energy," or PACE.
The Sonoma County Energy Independence Program in 2009 became the first countywide PACE program in the nation. It since has financed $63.6 million worth of improvements to nearly 1,900 county homes and 60 commercial properties.
Ygrene has two direct connections to the county program. First, Rod Dole, the company's co-chairman, is the retired county auditor, treasurer and tax collector who led the team that developed the local PACE program.
Second, Ygrene founder and chairman Dennis Hunter previously co-founded a green energy financing program in Sonoma County with the participation of four banks. That work led, in part, to the inception of the county's Energy Independence Program, according to Ygrene materials presented this year to Mendocino County officials. After the county program began, Hunter put together a team to create a scaled-up national PACE program.
Ygrene works with cities and counties to form special districts that provide the means for borrowers to repay the cost of green retrofits on their property tax bills.