Innovative ideas for financing home energy efficiency
Wednesday, December 9th, 2009
Let’s face it, how many people have a spare $10k lying around for a new furnace? Not me, and I could use a new furnace.
Home weatherization and efficiency upgrades can make a big difference in U.S. carbon emissions. As we saw in a previous post, American households (including personal transportation) are responsible for
- 38% of the overall US carbon emissions
- 8% of global emissions
- more emissions of any single country except China
Unfortunately, there’s a big disconnect between things we can do to to save home energy and the ability for folks to pay for these improvements. New insulation, solar hot water, solar photovoltaics, high-efficiency furnaces: Take your pick….Each can cost $10k or more.
Fortunately, there are a lot of creative ideas coming to the rescue to help people defray these up-front costs:
- Municipalities can issue bonds that homeowners can borrow from to pay the up-front costs of improvements. The costs of these improvements are then payed back over an extended periods of time through raised property taxes. Homeowners effectively get a zero-interest loan from their cities.
- Banks can issue higher mortgages that include up-front costs for major energy efficiency improvements. These added costs are then spread out over the life of the mortgage, resulting in manageable monthly payments for homeowners.
- Or, the federal government can simply reimburse people for part of the costs of improvements. The so-called “Cash for Caulkers” program reported today by CNN is an example.
These kinds of programs make a lot of sense and have the potential to be game changers, along with helping Americans transition to electric vehicles as soon as possible.
Related post: Behavioral changes at home can have big impacts on U.S. emissions
Photo credit: http://www.flickr.com/photos/nicksee/ / CC BY-NC 2.0