Property Assessed Clean Energy (PACE): Overview & Tax Assessments CALSACA – Property Tax Managers’ Subcommittee Property Assessed Clean Energy (PACE): Overview & Tax Assessments Crystal Crawford, Ygrene Energy Fund Sacramento, CA 10/4/16

Presentation Overview PACE – How does it work? Consumer Protections PACE Funding Process, Payment and Repayment, Coordination with County Auditor-Controllers and Property Tax Managers Questions?

Comprehensive Program RESIDENTIAL MULTI-FAMILY & COMMERCIAL Use Financing to Pay for Upgrades Consumer Protections Certified Contractors, Local Permits and Customer Approval are Required JPA Forms PACE Program LOCAL GOVERNMENTS Authorize Program CERTIFIED CONTRACTORS Utilize Financing to Market Building Upgrades

ADVANTAGES FOR PROPERTY OWNERS 100% financing – no out-of- pocket costs Low Rates & long terms Eligibility based on mortgage and tax pay history, not credit score Designed to stay with property upon sale Off balance sheet treatment Non-recourse financing Low rates & long terms 100% financing – blended debt + equity NNN pass-through to tenants addresses the ‘split incentive’ challenge Ygrene Confidential

OPERATIONAL SIMPLICITY Approval and finance documents issued in 15 minutes or less Monthly Call Center Metrics 10,000-15,000 new applications this year Ygrene Confidential

CONSUMER PROTECTION GSFA & Ygrene have adopted an enhanced Contractor Quality Assurance CSLB, bond, insurance screening Training and certification Watch lists, annual audits, ongoing skills assessment and monitoring Program Quality Assurance Monthly audit of PACE assets to validate accuracy and integrity of system, contract, underwriting, financing, processes and data Lending Practices Eligible measures & pricing review Underwriting Key disclosures Identify verification Right to cancel Settlement statement Approvals & Payment Protection Payment protection via property owner and contractor authorizations Permit verification & third-party inspections Privacy & Data Security Protection and controls safe-guard sensitive consumer information Cyber-security standards protect points of vulnerability Dispute Resolution Staff trained to receive, manage, track, report and resolve complaints quickly Protected Classes Verification by phone with elder customers (age 64+) Spanish/bilingual CSRs on staff GSFA & Ygrene have adopted an enhanced PACE Nation Consumer Protection Policy

Fee Schedule, Terms & Rates

PROJECT FUNDING FLOW

Payment & Repayment Processes COUNTY TREASURER-TAX COLLECTOR Auditor-Controller adds per parcel and/or per district fee Treasurer-Tax Collector adds per parcel and/or per district fee COUNTY AUDITOR-CONTROLLER Willdan prepares tax roll in County-specific format WILLDAN TAX ADMINISTRATION WILLDAN, INSURANCE, SERVICES PMT/FEE Property Owner pays PACE tax payment District assigns PACE assessment on property Fees PROPERTY OWNER Cash for cost of EE/RE Improvement Payment to Ygrene for Ygrene position TRUSTEE Cash payment to Ygrene to fund project Assignment of right to banks to receive tax revenue stream Tax revenue stream to bank partners Transfer of right to receive tax revenue SECURITIZED POOL FINANCIAL PARTNERS $150M credit facility $20M revolving facility Additional Financial Partners, Etc. Cash to purchase instruments Cash purchase of interest Yearly payments fully amortized for 10-20 yrs INVESTORS

Tax Administration Process - California Willdan Submits Information for Each County’s Tax Roll

District Development & Government Affairs Questions? Crystal Crawford Senior Director District Development & Government Affairs 858-353-6658 Direct Crystal.Crawford@Ygrene.us www.ygreneworks.com