By Bart King
I live in one of the many brick, ranch-style houses built across the United States in the 1960s. Along with split-levels from the same period, these homes seem to be rock-solid and have weathered well over the years. But energy efficiency is a different story. My house is certainly “tighter” than the turn-of-the-century homes in more desirable in-town neighborhoods, but this time of year my furnace only takes brief pauses to catch its breath.
I’ve done what I can—insulating hot water pipes, caulking windows and adding weather stripping. But I’ve had to prioritize the big jobs—weighing my desire for new windows, metal roofing, and more insulation against my willingness (or ability) to take on home-equity debt. That’s one reason why I’ve got my eye on the National Clean Energy Lending Authority, as proposed by U.S. Representatives Chris Van Hollen (D-Md.) and Zach Wamp (R-Tenn.).
Like hundreds of other lawmakers, lobbyists and scientists with an idea for saving the country, these two have written to president-elect Obama, asking for the creation of a $10 billion “green bank” to finance the transformation of the energy sector. In addition to funding alternative energy projects for which private financing has become scarce, the bank also would manage a $20 million Home Energy Savings Revolving Fund.
The fund would give zero-interest loans to local governments to help their residents retrofit homes with energy efficient lighting, windows, insulation, heating and cooling systems, and other energy-saving equipment. The legislators gave no suggestions as to how the local governments should distribute the money, but a new financing model originated in Berkeley, California would be a perfect fit and is already spreading to municipalities around the country.
Created to finance energy efficiency upgrades and residential solar systems, the financing scheme reduces up-front costs for homeowners by allowing them to pay for home improvements through long-term assessments on their property taxes. An added bonus is that the financing model ties the debt to the house, so that homeowners who think they might eventually sell their house don’t have to worry about failing to recoup their investments. The new homeowners would be responsible for the payments in exchange for reduced utility bills (as well as a smaller carbon footprint and/or reduced dependence on foreign fuels—whichever floats their boat).
Voters in Boulder County, Colorado approved a similar plan in November, and numerous other California cities are adopting the model, as well as towns in Pennsylvania, New Jersey and Maryland. But financing remains an obstacle. With financial markets locked down, even municipal bonds aren’t a sure way to raise money for such programs. Berkeley found private financing last year, but the federal green bank could streamline the system.
Admittedly though, $20 million doesn’t sound like much. Just in my neighborhood alone there must be several hundred thousand dollars worth of energy retrofits waiting to be contracted. But as we all know there are plenty of contractors and laborers ready to do the work since the housing market ground to a halt. And if the program leads to “shovel ready” work, it could undoubtedly be funded at higher levels.
The doubt that remains in my mind is whether enough homeowners would participate to actually stimulate the residential construction industry. Unless a carbon tax or cap-and-trade system drives up the cost of electricity, natural gas and heating oil, I think only the most eco-minded homeowner is going to go out of his or her way to lower utility bills by increasing escrow payments—especially under a cloud of financial insecurity. But I hope I’m wrong.
Nonetheless, an incentive system needs to be in place, because the nation’s older housing stock is wasting quadrillions of BTUs per year. (Oregon is considering passing a law that requires every home to receive an efficiency rating before being sold.) Whether by legislative act or decreasing resources, the price of energy will eventually go up, and homeowner relief will be needed—especially for those who can least afford efficiency improvements.
In the meantime, those who choose to could get a head start on sealing the cracks. I would be first in line with an application to replace every single-pane and ill-fitting storm window in my house. When I reinsulated my attic a year and a half ago (at a surprisingly low cost of $450), I cut my summer electric bill in half. With Energy Star windows I suspect I could do at least as well and give my furnace a needed break on days like today.
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Bart King is News Editor of SustainableBusiness.com. This column is available for syndication.
Contact bart@sustainablebusiness.com
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