Efficiency Proponents Promote New Funding Model
04/15/10 12:45PM By Nina Keck
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(Host) Most property owners would like to make their home or business more energy efficient. But many can't afford the upfront costs.
And with the average American moving every five to seven years, many people don't own their homes long enough to realize the benefits of the investment.
Community activists and energy efficiency proponents hope a new funding model may provide a long term way around those obstacles.
And, as VPR's Nina Keck reports, save energy and create local jobs in the process.(Keck) Paul Zabriskie parks his Prius on a residential street in Randolph.
(Zabriskie) "We're real energy wasters - and we're no worse than anyone else in the country."
(Keck) Zabriskie should know - he's General Manager of Energy Smart of Vermont and the weatherization director at Central Vermont community Action - two organizations that retrofit buildings to make them more energy efficient.
(Zabriskie) "We have old housing stock. As we sit here, we're looking at a double-wide structure, we're looking at a balloon-framed, a converted Victorian, and an old farm house. I'm sure there are buildings on this street that have no insulation at all. I thought when I came to this industry that oh, didn't we solve that back in the 70s? Well no, we didn't solve that in the 70s; there's lots of Vermont buildings that have walls that are completely missing insulation."
(Keck) Rebecca Brink's home has insulation - there's just not enough of it and over the years it's begun to fail.
(Zabriskie) "Hey guys Nina's coming up the ladder."
(Keck) One of Zabriskie's weatherization crews inches their way through Brink's attic spraying foam sealant. Once the attic and basement are sealed, they'll spray in high grade insulation. The crew will also tighten gaps around the front door and repair missing sheet rock. Zabriskie says Brink, who's a single mom with three kids, should notice a big drop in future heating bills.
(Zabriskie) "Pretty much any family can save 25 to 30 percent of their energy consumption relatively easy with under 10-thousand dollars investment."
(Keck) Repairs on the Brink home will cost less than $5,000 - paid for with federal stimulus money.
But Paul Zabriskie says those stimulus funds will run out in a year or two, which is why new, long term financing models are needed.
One idea that's getting a lot of attention is called PACE - which stands for property assessed clean energy. The concept is fairly simple - a city, town or group of towns creates a clean energy district so they can jointly borrow money. Local residents can then apply to the district for a PACE loan to make their homes or businesses more energy efficient.
Unlike a home loan from a bank, which often requires repayment in three to five years, a PACE loan can be paid back at a fixed low rate over ten or even twenty years. And the repayment is tacked on to the homeowner's property tax bill.
(Hamilton) "The breakthrough idea is that instead of thinking about it as an investment you're making that you need to get back - it's an investment to the property."(Keck) Blaire Hamilton is executive director of the Vermont Energy Investment Corporation.
(Hamilton) "So in a sense if you move in a few years, the next person who's there will see an additional charge on the tax bill that's paying off this improvement to the property."
(Zabriskie) "So that may motivate people who are looking and saying why would I invest in this building? I don't plan to be here that long."
(Keck) Paul Zabriskie says if the plan works likes it's supposed to, the person's fuel bill savings will be higher than his or her annual loan repayment. PACE proponents say it's an affordable way to save energy and improve Vermont's aging housing stock.
Peter Adamczyck, energy finance and development manager at Vermont Energy Investment Corporation, says the program also has the potential to create jobs.
(Adamczyck) "You've got people doing energy audits, doing air sealing, installing installation, putting in windows, installing high efficiency appliances like furnaces and hot water heaters. The wholesalers and the manufacturers and the whole distribution network all get the pump from this money being spent."
(Keck) Although relatively new - 16 states, including Vermont, have passed laws to enable local municipalities to adopt the program. Berkeley, California, launched the concept in 2008, with Boulder County, Colorado, following soon after.
What's unclear to Vermont officials is how the program might work in small towns. Many town officials who have expressed interest in the PACE concept are wary of the potential costs and work involved in setting up the program. Peter Adamczyck says to work in Vermont, towns will likely have to join together to share overhead costs and secure better financing. Middlesex, where Paul Zabriskie lives, is one of four Vermont towns that have received grant money to develop a pilot PACE program.
(Zabriskie) "Folks in Middlesex think this is a really exciting possibility, but it's not ready for prime time. So we sought support through these energy efficiency block grants to partner with other towns to really explore what the possibilities are and take some of these 'what ifs' and do the professional work to sort out how they actually play out at the town level."
(Keck) Lots of details still need to be worked out: like how to make sure contractors are paid on time; and how to standardize regulations from one town to another. There's also concern about what happens if the homeowner defaults on their mortgage or can't make a payment. And if that happens who gets paid first - the mortgage holder or the town that provided the PACE loan? Despite those questions, Peter Adamczyck says Vermont is on its way. He says the state has received $100,000 in federal funding for PACE implementation which will help pay for consulting services and other start-up costs.
(Adamczyck) "So This may allow the towns that want to get started to start at a very affordable level - rather than suffer any kind of premium costs for being early adopters."
(Keck) Back in Randolph, Paul Zabriskie talks about the state's high unemployment rate as he eyes a row of rundown houses. If towns can figure out a way to make the PACE program work, he says - cautiously optimistic - it could do a lot of good.
For VPR News, I'm Nina Keck