This week a new type of utility-financed energy efficiency subsidy was introduced by Senator Merkley of Oregon to some surprisingly bipartisan support, gaining two Republican co-sponsors, in an indication of where a few Republican votes might be found in energy and climate legislation.
The Rural Energy Savings Program would provide Federal funding to rural electric co-ops so they could offer “on-bill” financing to their customers, allowing families and businesses to repay an energy efficiency retrofit loan off slowly over time through the savings on their monthly energy bill that the energy retrofit creates.
Like Property Assessed Clean Energy (PACE) funding it allows an entity to float bonds to provide the upfront cash, like Berkeley First and the subsequent municipal financing programs for putting in residential renewable energy.
The difference is, instead of a city or county, a rural electric coop would be fronting the money.
Current PACE programs have used municipalities and cities, like Berkeley, or counties like Sonoma to float a bond and provide the funding and to be paid back over time through a corresponding increase in the homeowner’s property tax bill.
Since the homeowner was no longer paying for electricity the tax assessment amounted to a substitute “utility bill”, making the solar installation free in the sense that it is no more expensive than what homeowners were already paying. The lack of upfront expense is the draw.
Whether the money is fronted by a city or by a electric coop; the repayments should work just as effectively. Both cities and utilities are already in payment plans with the homeowner, a utility for electricity, a city for property taxes. Adding to that payment – while reducing the electricity payment correspondingly - is thus relatively straightforward.
And whether the money goes to produce energy – as in Berkeley and Sonoma County, funding solar panels - or to reduce energy use; as in this one for energy efficiency, should make little difference.
With enough efficiency measures like heat recovery, ground heat exchange, radiant cooling and heating, much better insulation, much higher R-value windows and walls – energy use can be reduced by efficiency up to 85% or so.
The National Rural Electric Cooperative Association supports the legislation. The USDA would administer it.
Republicans Lindsay Graham of new wind powerhouse South Carolina and Richard Lugar (of 90% coal powered Indiana) were the surprise cosponsors.
When the Senate finally takes up climate legislation, and with a few Republicans actually cosponsoring ideas like this one; it just might – I’m betting that this new electric utility version of municipal funding will be part of it.
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Susan Kraemer writes at CleanTechnica, CSP-Today, PV-Insider , SmartGridUpdate and GreenProphet and has been published at Ecoseed, NRDC OnEarth, MatterNetwork, Celsius, EnergyNow and Scientific American. As a former serial entrepreneur in product design she brings an innovator's perspective on inventing a carbon-constrained civilization: If necessity is the mother of invention: solving climate change is the mother of all necessities! As a lover of history and sci fi, she enjoys chronicling the strange future we are creating in these interesting times. Follow Susan @dotcommodity on twitter.