I found a great idea inside this report about using green building retrofits as a means of economic recovery. This could be just what the doctor ordered in a world of 12.5 unemployment and nightmarish property values.
This report is encouraging for several reasons (and it makes me feel better about voting for Obama) but what particularly excites me is where it discusses PACE (property assessed clean energy) financing for green retrofits.
We’re talking about solar water heaters, photovoltaic generators, high-efficiency cooling systems and so on and so forth. These things aren’t cheap but the money they save by reducing energy consumption adds up to a whole lot more. In fact, according to this study, the savings can total between 10 and 50 percent, and sometimes more.
We installed a solar domestic water heater at our house about a year ago. The $1,500 federal tax credit, along with $450 from Progress Energy, tipped us in favor of the idea. That utility had just socked us with a massive rate increase and we decided we would rather avoid that cost over the long run and temporarily pay it in the form of monthly payments on the credit card to which we charged the cost of the solar unit. We also expect the unit to help us avoid the impact of future electric rate hikes. We all know they’re inevitable.
The problem these days is credit-card and home-equity lines aren’t as common or as ample as they used to be. So, as a practical matter, the cost of many green retrofits is just downright prohibitive for a sizeable chunk of the prospective market. And that’s doubly true, if you’re likely to move before you recover your investment.
PACE programs are designed to literally change the equation by providing low-cost capital to homeowners, who then repay it as part of their city or county property tax assessment. Among other things, this ties the investment to the property, not the individual owner. That makes a hell of a lot of sense because the benefit of the investment accrues over time. If more than one owner is going to reap the rewards of lower energy costs, it makes perfect sense to allocate the initial investment on that basis. That’s what PACE does, among other things.
The U.S. Department of Energy has $3.1 billion in economic-recovery funds available to fund city, county and tribal PACE-style programs. As of October, the department had received just $81 million worth of applications. That means there’s still plenty left for greater Tampa Bay.
It seems to me that some forward thinking local-government types could do a whole lot of good by grabbing as much of that money as possible, and encouraging local property owners to take advantage. In fact, if they got real creative, these local heroes might even succeed in leveraging private capital to expand the pool of available funds for green retrofits.
The result would be more work for local contractors and their employees. That has to be a good thing in this stinking, rotten economy with 12.5 percent unemployment. What’s more, the value of property improved is bound to stabilize or even increase over time.
Think about it. What buyer with an iota of common sense wouldn’t pay more for a property that costs 50 percent less to operate?
