B1.7 Energy efficiency financing
Offer loans for residential energy efficiency improvements. (See also G.3 Financing Tools)
Local banks
Generations Credit Union offers loans for solar and energy efficiency, and Olympia Federal Savings has Green Choice Lending Programs. (Background article.) Fannie Mae’s HomeStyle Energy mortgage lets buyers add upgrades recommended in a Home Energy Report into their loan.
Loan loss reserves
King County’s 2015 strategic climate action plan includes an item (p. 32) for stimulating an additional $5 million in annual consumer spending on cost- effective energy efficiency retrofits by providing a loan loss reserve to local banks and credit unions.
Local offsets
King County has created a certified forest carbon credit program that offers local companies a way to offset a portion of their carbon emissions by contributing to a fund to acquire and preserve forests in the county. The Finger Lakes Climate Fund, a non-profit in Ithaca, NY, lets people calculate their emissions and then offset them by contributing to a fund to support local projects that reduce emissions and “would not otherwise be possible.” They have raised $86,000 and funded energy efficiency projects in low and moderate income residents’ homes, and in one organic farm’s storage barn. (The Winneshiek Energy District, a non-profit in northeast Iowa, runs a similar program.) San Francisco’s city and county government Carbon Fund uses local offsets to fund a variety of projects, and markets the opportunity to event organizers. ” “The Cambridge Carbon Fund: Program Design Recommendations”, discusses the policy issues and includes references to a number of other local offset programs.
City Climate Funds
The Rocky Mountain Institute’s post, “5 Ways that City-focused Climate Funds Drive Building Energy Efficiency,” discusses several examples.
Green Banks
These leverage taxpayer or ratepayer funds to increase private investments in clean energy. Montgomery County, Maryland has a green bank. (The Coalition for Green Capital did a market assessment for the proposal.) Washington DC has a municipal green bank. The Coalition maintains a resource page covering state and local green banks and the legislation introduced last spring to create a national one. (It also includes provisions for supporting state and local green banks).
In 2014, the Economic Development Council of Seattle and King County sponsored a study about creating a green bank in the state and concluded it would probably be constitutional, but instead recommended expanding several existing State financing programs, including the Clean Energy Fund’s revolving loan program and the various loan programs from the Washington State Housing Finance Commission’s Sustainable Energy Trust.
The Yale Center for Business and the Environment has also put together a number of case studies on green banking projects.
On bill financing
On bill (or pay as you save) financing facilitates the repayment of a loan for an energy conservation project by adding the payments to the utility bills, so they continue to be paid by later residents if the original customer moves. In some states, utilities can make these investments directly. Representative Doglio’s HB 1642, which passed out of committee last session but didn’t reach the floor before cutoff, would authorize utilities to provide this repayment mechanism for loans by third parties to finance renewable energy or efficiency projects. ILSR did an extensive report on the idea, and maintains a web page with links to resources and research about this and other forms of inclusive financing.