Leveraged Financing for Energy Efficiency and Renewable Energy Initiative, City of Reno

Location: Nevada, USA

Population: 246,500 (2019)

Climate: cold semi-arid climate

Duration: 2008-2012

Sector: Buildings

Funding sources: Public-private

City networks: N/A

Savings: Annual savings of about 6.3 million kWh of electricity and 641,435 m³ of natural gas,

Solutions: The City of Reno implemented an Energy Efficiency and Renewable Energy Initiative involving an investment of nearly $20 million, consisting of energy efficiency and renewable energy projects in City buildings and facilities.

Multiple benefits: Local job creation.

Objective – To reduce the City’s carbon footprint and energy bills.

Solutions – In an effort to reduce its carbon footprint and energy bills, the City of Reno began its Energy Efficiency and Renewable Energy Initiative under the City Council’s Green Priority. The Initiative represents an investment of nearly $20 million in energy efficiency and renewable energy projects in City buildings and facilities. The project was funded through a combination of Energy Efficiency & Conservation Block Grants (EECBG), Clean & Renewable Energy Bonds, Qualified Energy Conservation Bonds, Recovery Zone Economic Development Bonds, and NV Energy utility rebates. Energy savings are being used to pay off the bonds, with no impact on the city’s general fund.

Before receiving ARRA funding, the City of Reno was interested in implementing cost-effective energy efficiency projects and some renewable energy projects in its buildings and facilities. The first step in the process was the selection of an Energy Services Company (ESCO) through a competitive bid process. The City contracted an ESCO in August of 2008 to conduct a yearlong energy and resource audit that included electricity, natural gas, and water use at all city facilities. The audit was completed in August of 2009.

In June and September of 2009, the City Council approved a series of Phase I and II projects which involved solar photovoltaic (PV) systems, small wind turbines, solar thermal heating systems, lighting retrofits, control systems, and a variety of HVAC upgrades. For Phase III, the City contracted with a local solar company to install and operate eight new solar systems with a total of 1 MW generating capacity. In February 2010, the Nevada State Office of Energy (NSOE) started a streetlight retrofit program with ARRA funds. The famous Reno Arch was retrofitted entirely with energy-efficient LED bulbs among other projects. In addition, the energy retrofits of City Hall will reduce its energy costs from $4.54 to $2.54 per square foot. Overall, the series of projects is expected to yield $1.33 million in annual energy cost savings. A total of $19.5 million has been spent on the project, including $3.5 million for the renewable energy systems.

Funding –The City used about $2.7 million in EECBG and other ARRA funds for the project; however, the grants only about 13% of the total $20 million investment. It secured low-interest loans in the 1-4% range using new finance mechanisms such as Qualified Energy Conservation Bonds, Clean and Renewable Energy Bonds, and Recovery Zone Economic Development Bonds. The City lowered its purchase price of renewable facilities by combining the utility rebates with the federal tax credit that the private company receives.

Innovation – The City’s Energy Efficiency and Renewable Energy measures on City properties were financed through a combination of grants, low-interest bonds, and utility rebates. The energy savings are being used to pay off the bonds, with no impact on the city’s general fund.

Success factors – (1) Proper opportunity screening: the City contracted an ESCO in August of 2008 to conduct a yearlong energy and resource audit that included electricity, natural gas, and water use at all city facilities. (2) Supportive policies and support in the form of a federal government grant, low-interest bonds, and utility rebates. (3) Innovative funding solution and engagement of local businesses.

Significant outcomes

• The estimated annual savings from all the projects under the Initiative were about 6.3 million kWh of electricity and 641,435 m³ of natural gas while lowering its yearly carbon footprint by roughly 7711 tCO₂ each year.
• Energy efficiency measures will provide over 80 per cent of the total electricity savings; renewable energy generation will provide about 18 per cent.
• The projects reduced the City’s energy use by over 20 per cent, and renewable energy provides 15 per cent of the remaining power load of the City.

Synergies with local policies:

• Through its Sustainability and Climate Action Plan, the City of Reno has set an ambitious goal: By 2025, the city will reduce its greenhouse gas emission by 28 per cent from 2008 levels, a goal that the city is on track to meet.
• The city has set a target of 40% GHG emission reduction from 2008 level by 2030 [source].

Political alignment:

• Reno has a sustainability and climate program, and its leaders are committed to creating a more sustainable and resilient community.
• The City’s energy efficiency and renewable actions align with state and federal policies on climate change mitigation and clean energy transition.

Marketability: N/A