Financing Energy Options

PSC conceives of and manages a custom energy financing solution for the state’s residents and businesses.

The Challenge

On the heels of landmark energy legislation (Public Act 295) becoming law, Michigan’s state agencies immediately went to work making sure residents could take advantage of badly needed resources to improve the efficiency of their homes and buildings. The Michigan Public Service Commission (MPSC), Michigan’s chief utility regulator, knew the state’s residential and commercial buildings were older, less efficient, and costlier to heat and cool than most in the nation. Combine that with slumping housing prices, decreased economic activity due to a prolonged recession and a mortgage crisis, and it’s easy to see why the MPSC was so motivated to find a just-right solution to help Michiganders lower their monthly energy costs while investing in their long-term viability.

Big problem. Too few resources. That’s where we—Public Sector Consultants—came in. The MPSC asked: “How can you help stretch $8 million to improve the energy efficiency of Michigan’s homes and businesses?” We answered that question with exhaustive research and a commitment to turning what we learned into reality.

A man holding an infrared heat viewfinder.
A man holding an exposed wall outlet.
Two men standing in the stock room of a shoe store discussing the energy efficiency of their HVAC system.

The Plan

PSC’s plan started with developing cutting-edge solutions for removing the two biggest barriers to making retail energy improvements in Michigan: a lack of financing and a lack of public awareness. To accomplish that goal, we had to pull out all the stops. While many of our projects require one or maybe two of our firm-wide skill sets—this one needed all four:

01

Research a sustainable solution utilizing financial instruments like a revolving loan fund, loan loss reserve, or lease agreement

02

Facilitate statewide and national conversations with stakeholders and subject-matter experts on energy efficiency and financing

03

Implement and manage Michigan Saves—a new, fully independent nonprofit organization dedicated to making energy improvements easy and affordable—and equip
it with a:

  • Governance structure following national best practices
  • Statewide network of residential and commercial contractors that meet quality
    standards
  • Statewide network of lenders that provide credit based on specified terms
  • Thorough set of program guidelines that detail the operation’s legal, financial, data, and reporting systems
  • Well-conceived brand capable of marketing to the public at large and industry leaders in energy, banking, construction, and building improvement
  • Fund development effort capable of procuring and managing grants and gifts of all sizes and complexity

04

Evaluate the effectiveness of the organization’s efforts to break down the barriers that prevent Michigan residents from making energy improvements in their homes and
businesses

Our Qualifications

PSC was uniquely qualified to research, facilitate, implement, and evaluate Michigan Saves because we have:

  • Extensive knowledge of energy sources, markets, and policy
  • The marketing and communications expertise necessary to drive demand in a new market
  • Specific knowledge of credit tools used to finance public and private projects
  • Experience with large-scale facilitation projects
  • Experience developing sophisticated information technology, financial, and governance systems
  • Experience managing federal regulations
13,000

Families & Organizatons Helped

300

Million in Invesments

The Result

Staffed by PSC talent, Michigan Saves has helped over 13,000 families and hundreds of organizations from every sector of the economy take control of their energy costs. Michigan Saves has also secured tens of millions of dollars in grants from numerous sources, provided multiple cash and reduced interest rate incentives, and helped catalyze a new, sustainable marketplace for renewable and energy-efficiency financing where none existed before. Since 2009, when the organization was seeded with the MPSC’s original $8 million, those funds were leveraged with grants to over $300 million—all of which has been invested in buildings across the state. Today, Michigan Saves continues to help people understand the power of energy investment through thoughtful marketing and outreach, while giving them the tools necessary to act.

Husband and wife posing for a photo in their kitchen.

Why It Matters

Make no mistake, PSC is a place for ideas. Our research, facilitation, and evaluation efforts have produced some of the best thinking on public policy solutions for nearly 40 years. We usually work in a supporting role to help our clients and partners turn that thinking into action. But something special happens when we’re in the driver’s seat and get to implement. It creates a dynamic, reciprocal relationship of information and experience that enriches and influences our offerings in research, facilitation, and evaluation. Taken together, PSC’s work is making the lives of Michigan residents better.

In the case of Michigan Saves, we make lives better by enabling businesses to reinvest their savings from lower utility bills, schools to reduce maintenance costs because of upgrades to their boilers, and families to be safer and more comfortable in their homes because the cracks are sealed, the equipment is updated, and the insulation protects them from drafts.