Incentives are an increasingly popular tool in the effort to increase energy efficiency and decarbonization across California. With subsidies, local governments can provide a financial incentive to switch over to more efficient or electrification-based technologies. One way jurisdictions can leverage subsidies is by providing them for non cost-effective measures that they want to require in a reach code. For example, heat pump water heaters may not be cost-effective for your climate zone; your jurisdiction could offer a subsidy that offsets the cost of a heat pump water heater so that it is cost-effective, and can be required. This is one of several ways to require non cost-effective measures.

To view subsidy information on the Explorer, you can start from the Results page, or any other page that displays measure results (like your policy’s impacts page, or your policy’s requirements page). Subsidy information is only provided for existing buildings, so make sure to toggle to Existing Building Results. From there, click on the vintage you are interested in, and the “Add/Hide Columns” button should appear in the upper right hand corner of the section for that vintage. Click on it, and scroll down to see the available subsidy columns. Select the columns you are interested in, and then they will appear in the table of results. You can rearrange the order of columns and sections of columns from “Add/Hide Columns” by clicking and dragging them, and can also toggle other columns on and off.

While exploring subsidies, you may notice that certain measures still cannot be selected. This is because local governments may not require that appliances surpass federal appliance efficiency standards.

The Explorer currently calculates four different subsidies. The first is an “On-Bill Cost-Effective” subsidy. This subsidy looks at non cost-effective measures, and calculates how much of a subsidy is required to make it cost-effective.

The second subsidy is a “Payback in 5 Years” subsidy. This subsidy is focused on increasing how quickly the initial investment of a measure pays back for the homeowner, providing a subsidy that ensures the measure pays back within 5 years. For some measures, this subsidy will be higher than the initial cost of the measure, because the measure results in annual bill increases, and as such needs a higher incentive to make it pay back.

The third and fourth subsidies are variations of the first two, but modeled under the California Alternate Rates for Energy (CARE) program, which provides a discount on utility bills to qualifying low income households. We simulated CARE program costs by assuming a 75% reduction in annual utility bills as compared to a standard utility customer.

The Explorer currently provides subsidies on a per home and jurisdiction wide basis.

Per home subsidies are a great way to take a quick look at what a subsidy might look like, what measures would require a subsidy, and to get an initial understanding of the landscape.

When you're ready to take a look at the bigger picture, take a look at the jurisdiction wide subsidies. Jurisdiction wide subsidies are based on the estimated city-wide affected units, and the assumed percentage that fall under the California Alternate Rates for Energy (CARE) program.

You can evaluate the jurisdiction wide subsidy for a given measure or combination of measures, which indicates the total funding amount needed for such a subsidy program, and the associated impacts.

Alternatively, if you know the total funding amount you will have available, you can divide that total amount by the per home subsidy amount to see how many households you could affect, and then adjust your building assumptions to reflect the number of units that will access your subsidy program. For example, if you will only have the funds to provide 100 units with a HPWH subsidy, and the total number of affected units in your policy is 400, you will need to adjust that down to accurately capture the amount of emissions reductions.

There are many things to keep in mind while reviewing your subsidy options. If you are interested in maximizing the effects of your subsidy, you may want to look at the emissions reductions relative to the amount of subsidy required for given measures. You can simply divide the emissions reductions for that measure by the subsidy amount required, and compare the measures you are interested in.

Alternatively, you may want to consider your jurisdiction’s CAP goals, and look at how a subsidy could help you meet goals such as decarbonizing existing buildings, or meeting specific emissions reduction targets.

You may also want to investigate what subsidies your local utility or CCA may already have in place. If your utility already provides a subsidy for one measure, you may want to augment that subsidy, or choose an alternate measure to subsidize. There are several examples of subsidies offered by some California utilities and cities below.