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Innovative ideas for financing home energy efficiency

Wednesday, December 9th, 2009

3189763520_b63667bc3dLet’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: / CC BY-NC 2.0

One Response to “Innovative ideas for financing home energy efficiency”

  1. Gary Rasp says:

    Nice post, with many good points. Energy efficiency has long been recognized (at least in the field) as the quickest and easist way to reduce CO2 emissions while also lowering overall demand, thus avoiding new and costly power plants.

    One of the few companies doing large-scale energy efficiency programs is EnerPath
    Services ( EnerPath runs an ongoing program for the Los
    Angeles Department of Water & Power’s that provides energy-saving lighting retrofits to lower businesses’ utility bills. So far, EnerPath has enrolled 27,000 small businesses
    in the L.A. area since the inception of the Small Business Direct Install program\
    (SBDI) last year.

    At its peak, EnerPath employed more than 250 program representatives and
    contractors to provide free lighting assessments, free upgrades, and up to $2,500
    in free installations.

    Using handheld PDAs, EnerPath representatives are able to calculate the potential
    energy savings from recommended retrofits on the spot in real-time. The system
    also allows them to print customer reports in up to six languages.

    Business owners can authorize the retrofits all in the same visit, which typically
    takes less than an hour. The EnerPath system immediately notifies pre-qualified,
    local subcontractors who perform the installations.

    Many of the lighting retrofits come in under the program’s $2,500 cap; when
    business owners authorize retrofits that exceed the limit, EnerPath coordinates
    claims through LADWP’s Commercial Lighting Efficiency Offer, a co-pay program, to
    help cover the balance.

    All told, the program has reduced LADWP’s overall energy consumption by 18.6
    MW – roughly enough energy to power 9,500 homes a year for the life of the measures.

    Cash for Caukers sounds like a good idea, but the plan has serious flaws. I’ll
    weigh in with more on that topic some other time.
    more on that topic another time.
    that later.


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