Financing Green Building

The federal government and the State of California have created funding mechanisms to advance green building. Utilities offer rebates and incentives. Increasingly, investors and venture capitalists are recognizing sustainability and green design as the new frontier in technological innovation, job creation, and economic and affordable housing development.

The following are a representation of the resources available:

Enterprise Brings Recovery Act Financing to Poor Neighborhoods
The American Recovery and Reinvestment Act of 2009 has awarded $95 million of its $1.5 billion in New Markets Tax Credit (NMTC) awards to Enterprise Community Investment to facilitate community development projects in low-income areas. Enterprise will offer a 39 percent tax credit to attract investment in commercial and mixed-use developments, provided the projects are at least 20 percent commercial, are located in economically distressed communities, and incorporate energy efficiency, transit-oriented locations, renewable energy, green building techniques and brownfield reclamation.

USEPA and State Brownfield Funds: 2011 Grant Cycle 
EPA grant guidelines for cleanup, assessment, and revolving loan fund grants  due October 2010

California Economic Recovery California Energy Commission Programs

CDFA Spotlight: Green Building Finance

ENTERPRISE California Green Communities Fund
The $40 million Enterprise California Green Communities Fund will help finance the creation of 500 energy efficient, affordable homes in Los Angeles, Oakland, and metropolitan San Francisco through the syndication of federal low-income housing tax credit (LIHTC) equity.

Enterprise's Green Communities Initiative
Enterprise offers a comprehensive array of funding options for interested developers.

Planning and Construction and Charrette Grants 
Grants to help cover the costs of planning and implementing green components of affordable-housing developments, as well as tracking their costs and benefits.

Early Predevelopment, Predevelopment, and Acquisition Loans 
Loans to support the development of affordable rental and homeownership housing that adheres to Green Communities Criteria.

Green Made Simple
 Find incentives, rebates and green business listings in your area

New Resource Bank of San Francisco offers no-fee solar home equity financing

Home Depot Foundation grants

While the subject is indeed complex, the central facts are simple.  High performance green building is just a fancy description for good building.  It is good for your wallet. 

It is good for the environment.  And it is good for people.”

Thomas Menino, Mayor of Boston
*Everyone Benefits from Green Building…Everyone.

Coordinating Resources

Jurisdictions and RDAs may consider partnering with affordable housing non-profit developers to use NSP funds at federal and/or state level for purchase of foreclosed units and roll in energy efficiency improvements with HUD/DOE funds before returning acquired housing stock to the affordable housing market.

American Recovery and Reinvestment Act of 2009 (Recovery Act) Assisted Housing Stability and Energy and Green Retrofit Investments Stimulus Program 

Federal Neighborhood Stabilization Program Allocation

California Advanced Homes Program (CAHP)

Heschong Mahone Group (HMG)holds training sessions statewide, offers online presentations on green financing and greening portfolios,  implements a variety of programs to support multifamily housing development.  Starting February 1,, HMG will also be administering the California Advanced Homes Program (CAHP) in PG&E's service territory, a financial incentive program for single-family residential new construction, currently funded through December 31, 2012.

California Neighborhood Stabilization Program Allocation 

HUD Economic Recovery Act Press Release and Department of Energy Press Release


Database of State Incentives for Renewables & Efficiency (DSIRE)  
California Solar Initiative Single Family Affordable Homes (SASH) Program
CPUC allocated $108 million to Grid Alternatives to administer the SASH program - new program to provide substantially higher incentives to help qualifying low-income owners install solar electric systems. In partnership with Grid Alternatives the California Housing Partnership Corporation (CHCP) seeks to identify qualified lower income owner occupants receiving service from PG&E, SCE or SDG&E. Local jurisdictions should provide CHPC any available lists of eligible homes.

Energy Star Program
Energy Star was introduced by EPA in 1992 as a voluntary, market-based partnership to reduce greenhouse-gas emissions through energy efficiency. Today, the Energy Star label can be found on more than 50 different kinds of products as well as new homes and buildings. Products that have earned the Energy Star designation prevent greenhouse-gas emissions by meeting strict energy-efficiency specifications set by the government. In 2007 alone, Americans, with the help of Energy Star, saved $16 billion on their energy bills while reducing greenhouse-gas emissions equivalent to those of 27 million vehicles. (2008 EPA News Release)

Energy Upgrade California

Energy Upgrade California is a statewide program that teaches homeowners about the home upgrade process, helps them find a contractor to do the work, and shows them how to apply for rebates and incentives to pay for it.

It’s a one-stop incentive shop that will provide a streamlined application process for cash rebates, tax credits and special financing options.”

Homeowners have the option to add a Green Upgrade Package [including indoor air quality, waste reduction, and water and resource conservation] which can include rebates on a GreenPoint Rated label.

Energy Upgrade California:  Reduce Energy Use. Save Money. Create Jobs.
Find out what your county is doing by clicking here!

Flex Your Power
The Flex Your Power website is a comprehensive statewide resource for energy efficiency, providing information and tools for California consumers and communities. For example, SMUD has a new rebate and financing program to help multi-family property owners and managers install energy-efficient technologies in existing residential multi-family buildings with three or more units. These improvements include installation of energy-efficient lighting, ceiling fans, cool roofs, central air conditioning and heat pumps, room AC units, solar-water heating, pool pumps and motors, attic and wall insulation, and high-efficiency windows.

Sacramento Municipal Utility District Multifamily Energy Efficiency & Rebate Program

South County Energy Efficiency Partnership

PG&E Multifamily Energy Efficiency Rebate Program

Southern California Edison Residential and Multifamily Rebate Programs

Southern California Gas Residential and Multifamily Rebate Programs

San Francisco PUC Solar Energy Incentive Program

  • renewable-energy and energy-efficiency incentive payments of $3,000-6,000 for residential installations and up to $10,000 for commercial installations
  • $4,000 incentive level for solar installations completed by installers with local offices to create local jobs
  • $5,000 incentive level for installations located in Environmental Justice Districts experiencing the greatest burden of environmental and social costs of the City's historical power generation

California Energy Commission's Energy Efficiency Programs

The California Solar Initiative 
The California Solar Initiative is part of the statewide effort to install 3,000 megawatts of new, grid-connected solar systems by 2016. The Initiative offers cash incentives on solar systems of up to $3.50 a watt. These incentives, combined with federal tax incentives, can cover up to 50 percent of the total cost of a solar system.

Go Solar California 
Go Solar California is the web portal for New Solar Homes Partnership, and the Single-Family Low-Income Incentive Program which provides low-income homeowners access to solar photovoltaic systems, to decrease electricity usage and reduce bills without increasing monthly expenses. The incentives range from $4.75 to $7.00 per watt

California's Rebate Program for Wind & Fuel Cell Renewable Energy Electric-Generating Systems
Emerging Renewables Program provides cash rebates on eligible grid-connected small wind and fuel cell renewable energy electric-generating systems.

Public Funding

Weatherization Assistance Program 
The American Recovery and Reinvestment Act of 2009 (Recovery Act) has significantly increased funding to the Weatherization Assistance Program to help low-income families reduce heating and cooling costs and improve indoor air quality by improving the energy efficiency of their homes. Funding primarily assists households with 
elderly residents, individuals with disabilities, and families with children.

California Economic Recovery California Energy Commission Programs

Low Income Home Energy Assistance Program
Department of Health and Human Services LIHEAP assists low-income households paying a high proportion of household income for home energy with meeting their immediate home-energy needs.
Ms. Kathy Ely Senior Manager Department of Community Services and Development 700 North 10th Street, Room 258 Sacramento, California 95814 TEL: (916) 341-4341 FAX: (916) 327-3153 E-MAIL: SITE: PUBLIC INQUIRIES: 1-866-675-6623

Energy Efficient Mortgages Program (EEM) 
The EEM program helps homebuyers or homeowners save money on utility bills by enabling them to finance the cost of adding energy-efficiency features to new or existing housing as part of their FHA-insured home purchase or refinancing mortgage. Information is also available through the California Housing Finance Agency.

Department of Housing and Community Development (HCD)

HCD has several competitive funding programs that award some points for proposals that encourage sustainable design, in particular, high-density development near public transit: Building Equity and Growth in Neighborhoods Program (BEGIN), Infill Infrastructure Grant Program, and Transit Oriented Development Implementation Program(TOD).

State Low Income Housing Tax Credits
California is one of 12 states with membership of the Clean Energy States Alliance 

State housing-finance agencies facilitate the award of tax credits for green affordable housing projects by adopting policies to encourage sustainable design measures in their qualified allocation plans (QAPs), in great part because the affordable-housing industry has been at the forefront of the energy-efficient and healthy-housing development. The Tax Credit Allocation Committee (TCAC) awards competitive points in a number of areas, including for energy-efficiency beyond minimum construction standards and provides additional credit for water efficiencies and the recapture and use of non-toxic materials. As an example, projects must incorporate Energy Star appliances and competitive points can be awarded.

  • up to 8 points for sustainable building methods
  • 4 points for exceeding Title 24 by at least 10%
  • 2 points for adopting an Indoor Air Quality Management plan during construction
  • up to 5% basis boost for on-site energy generation

The Low Income Housing Tax Credit program has been oversubscribed by a ratio of 2:1, which could serve to further encourage sustainable design for the competitive advantage it affords.

Federal Housing Administration (FHA) changes, made in part through the Housing and Economic Recovery Act of 2008, will benefit multi-family programs applying for low-income housing tax credits (LIHTCs), including reducing the requirement for upfront equity from 100% to just 20 %, with no escrow. Initial equity installment of less than 20 percent will require approval from HUD headquarters.

Federal Tax Credits for Energy Efficiency
The Emergency Economic Stabilization Act of 2008 (H.R. 1424), recently signed into law, includes an extension and enhancement of the residential tax credits and additional financing for renewable energy and energy efficiency. The bill's attachment – the Energy Improvement and Extension Act of 2008 – enabled the following:

  • a one-year extension of the production tax credit for wind energy
  • a two-year extension of the production tax credit for geothermal, biomass and solar energy facilities, trash-to-energy facilities and hydropower
  • a new production tax credit for marine and hydrokinetic renewable-energy systems placed in service by 2011
  • an eight-year extension of the 30% tax credit for residential and commercial solar installations and elimination of the $2000 cap for residential installations of solar electricity
  • 30% tax credit for small wind power through 2016
  • an eight-year extension for microturbines, and for fuel cells along with a tripling of the credit limit tax credit limit
  • a new 10% tax credit for certain combined heat and power systems and for geothermal heat pumps
  • accelerated depreciation for utilities installing smart meters and smart grid systems
  • extended energy efficiency tax deductions for commercial buildings through 2013
  • reinstituted energy efficiency tax deductions for home improvements installed in 2009
  • extended tax credits for builders of new energy-efficient homes through 2009
  • increases tax credits for manufacturers of energy-efficient appliances, now extended through 2010

The Solar Energy Industries Association believes the new law will be responsible for the generation of $325 billion in private investment due to the enhanced security of the tax credits, and for the creation of 440,000 new jobs. Industry Leaders Forecast Dramatic Growth in the U.S. Solar Market by 2016 with Extension of Credit

Federal Green Bonds

The HR 1424 "Energy Improvement and Extension Act of 2008" authorizes $800 million in:

Green Affordable Housing

Energy Star for Affordable Housing: More Energy Efficient, Livable, Sustainable Communities

U.S. Environmental Protection Agency (EPA). Watersense

The EPA’s Indoor Environments Division Green Indoor Environments webpage

The Leadership in Energy and Environmental Design (LEED) for Homes Initiative for Affordable Housing 
Green Communities grants, financing, tax-credit equity and technical assistance to developers for creating new and rehabilitating existing low-income housing according to specific green criteria.  Its green criteria are closely aligned with the LEED ratings system.

Combined Heat and Power for PHAs screening tool for multi-family building owners or managers

PIH Energy Conservation Clearinghouse 

HUD’s PATH program 

PGE Solar Electric Systems for Multi-tenant Units

Site Contributors

Time Structures


Janet Myles, Independant Consultant

Site Courtesy of

California Redevelopment Associaiton

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