Climate Investment Report Misses Full Story on Weatherization

April 13, 2017/ Maria Stamas / Climate, Conservation, Natural Resources Defense Fund, Resources

Published by the Natural Resources Defense Fund

Looks can be deceiving – and this is certainly the case with the pot of money dedicated to the California Low-Income Weatherization Program, known as LIWP. By law, a portion of California cap-and-trade auction proceeds are dedicated to LIWP to extend the reach and boost the impact of the state’s renewable energy and energy efficiency programs, including for low-income multifamily housing.

But a recent report to the State Legislature suggests auction funds remain unspent for this popular multifamily energy efficiency improvement and renewable energy program and another to increase rooftop solar – and that their benefits have yet to be determined. However, the reality is that the programs already have extensive waiting lists and are in the process of cutting the energy bills of thousands of California households.

Overseen by the California Department of Community Services and Development, LIWP serves up clear results at a time when so many Californians grapple with the high cost of living here. It also creates job training opportunities, pathways to employment, and helps the state stay on track with its climate change agenda—because it reduces electricity needs and the necessity to burn polluting fossil fuels to meet them.

LIWP provides full-service technical assistance and incentives for energy efficiency retrofits and solar installations, and the funds specifically target single-family and multifamily homes in disadvantaged communities. The goal is to slash emissions and save energy, as well as to reach a part of the market that is often underserved by traditional energy programs but most in need of a helping hand: low-income families.

Energy Efficiency for All

LIWP Multifamily and Solar Programs Experiencing Waitlists

Despite the report’s indications on cumulative climate investment spending through November 2016, both programs are now fully subscribed with increasingly lengthy waitlists.

Since the launch of LIWP’s multifamily program (LIWP MF) in June 2015, the program implementer, the Association for Energy Affordability (AEA), has been reserving funds for projects to begin construction. And in January of this year, AEA finished earmarking all $33 million of the first three budget allocations for projects in its pipeline. As a result, over 7,100 low-income families in disadvantaged communities will see lower energy bills and property improvements from energy efficiency and solar installations.

Even though AEA fully committed funds to projects over a year ahead of the scheduled sunset date, misconceptions remain about demand for the program. Due to the comprehensive nature of large multifamily projects, they can take years to implement. Yet they only receive funds upon full completion, and as a result the funds appear to be unspent on paper, even while they are enabling energy efficiency and solar projects to occur in communities throughout California.

Similarly, GRID Alternatives, the statewide administrator of the single-family solar program, reports LIWP’s initial $27 million solar allocation is fully earmarked and will be spent by the program’s May 2017 sunset date. A large solar pipeline also exists with single-family housing to ensure the additional $11 million earmarked in the latest tranche will be fully spent by the May 2018 sunset date, with room to grow if additional funding becomes available.

Implications for Future Funding Allocations

In Sacramento, lawmakers tend to see funds not spent and assume that means there is little demand for additional funding. In reality, LIWP MF’s waitlist demonstrates that California unfortunately has no shortage of low-income families who could benefit from saving money on their energy bills through weatherization and solar.

Demand will be further elevated by AB 1550, which Gov. Jerry Brown signed into law last year. This law strengthens existing requirements by directing that 25 percent of cap and trade proceeds be made within disadvantaged neighborhoods and another 10 percent of investments benefit low-income households. Under this law, low-income homes within a half-mile of a disadvantaged community will become eligible for LIWP this year.

All of this paints a picture we hope state lawmakers can see. Behind the scenes, these projects are on track and delivering on their promise to help low-income Californians make ends meet.

As lawmakers deliberate over this year’s state budget, advocates from a partnership called Energy Efficiency for All, including NRDC, are recommending that the state allocate at least $28 million for LIWP’s multifamily program this year to meet demand for weatherizing and upgrading multifamily low-income housing in disadvantaged communities. Our organizations also support at least $75 million for the LIWP program as a whole, equivalent to the amount allocated to the Community Services Development Department for the first two tranches of the program.

In making decisions that will have an impact on tens of thousands of already struggling California families, we hope the legislature takes a close look at what the first projects have already achieved – and considers the road ahead, too.