HELP Is on the Way: County’s Sustainability Working Group Report
Supports Berliner Home Energy Loan Program (HELP)
ROCKVILLE, Md., January 15, 2009—Today, the Montgomery County sustainability Working Group (SWG) issued its first set of climate change recommendations in response to legislation sponsored by County Councilmember Roger Berliner. The SWG report recommends a comprehensive and diverse package of initiatives that will benefit residents and businesses and save them money in the long term by investing in clean energy, green buildings, energy efficiency and mass transportation choices.
"I want to commend the members of the Sustainability Working Group for their dedication and hard work, particularly the public members who generously gave their time and thoughtful ideas,” said Councilmember Berliner (District 1—Bethesda, Chevy Chase, Potomac). “This report lays a path for the next generation of Climate Change initiatives. I look forward to working with the Executive to see enactment of those ideas that will help our constituents, our economy and create a sustainable Montgomery County."
Councilmember Berliner is particularly gratified that that the Sustainability Working Group endorsed his initiative to create a Home Energy Loan Program (HELP). Councilmember Berliner proposed the establishment of HELP in an Energy and Environment White Paper he co-authored with Ken Brown, executive director of Climate Communities [NOTE: white paper is attached to this release.] The white paper was released in December. Since then, Congressman Chris Van Hollen, with the editorial support of The Washington Post, has embraced the proposal and has recommended it to President-elect Obama and Congress for inclusion in the stimulus package.
Under Councilmember Berliner and Congressman Van Hollen’s proposal, a property owner would receive a zero interest loan from the proposed Montgomery County Home Energy Loan Program (HELP) to pay for an energy audit and the recommended efficiency improvements. The property owner would repay the loan through a line item on their property tax bill. The advantage of this approach is that the property owners would only have to repay the loan while they owned the property. The new owner would continue to repay the loan through the property tax bill – and enjoy the lower energy costs – after they acquire the property.
“HELP is on the way,” said Councilmember Berliner. “This proposal, once enacted, will put money in our homeowner’s pockets, reduce greenhouse gas emissions by 20 percent and create green jobs in Montgomery County. This is a winning combination whose time has come.
“Local governments’ ability to tie home energy retrofit loans to the property is a game changer because a key barrier to investments in energy efficiency is the homeowners’ uncertainty about whether they will be in the house long enough to realize the benefits of their investment. Regardless of how long the homeowner stays in a property, the homeowner need only weigh the reduction in their utility bills against the monthly cost of the loan.”
Using this approach, a homeowner is likely to make a larger investment sooner, resulting in greater savings and a more marketable home to sell.
“Today, with current financing options, homeowners often opt for measures with a two to three year payback,” said Councilmember Berliner. “Under this model, measures with seven-year paybacks can be financed under terms that are attractive and more then pay for themselves.” Legislation will be introduced later this month.
The Sustainability Working Group (SWG) is comprised of 26 members representing a broad range of public and private sector interests. It is co-chaired by Montgomery County Department of Environmental Protection (DEP) Director Bob Hoyt and Jane Nishida. Nishida formerly served as the secretary of the Maryland Department of the Environment and currently is the senior environmental institutions specialist at the World Bank.
For more information about the Home Energy Loan Program, call 240-777-7828.
The following is the Energy and Environment White Paper by Montgomery County Councilmember Roger Berliner and Ken Brown, Executive Director of Climate Communities:
A Federal/Local Government Partnership
that Breaks the Home Energy Retrofit Conundrum
An Energy & Environment White Paper
The Honorable Roger Berliner and Ken Brown, Executive Director of Climate Communities
President-elect Obama has pledged to make the development of a green energy economy a hallmark of his Administration and the Democratic Congressional leadership has signaled its own commitment to a green future. Local governments are uniquely positioned to partner with the President-elect and Congress to transform this vision into reality.
Cities and counties across America are the first responders to the challenge of climate change – improving energy efficiency standards for buildings, promoting solar and geothermal projects, improving mass transit systems, and reducing vehicle miles traveled through local land use and smart growth policies.
Local governments can be particularly effective in reducing greenhouse gas (GHG) emissions caused by home energy consumption. This single source contributes almost one-third of our nation’s and 10% of the world’s GHG emissions. We all know that homes waste energy; last year GHG emissions from the residential sector increased more than any other source.
Every reputable study makes clear that retrofitting our homes with simple things like sealing and caulking, as well as energy-efficient lighting, windows, insulation, and heating and cooling systems, is the single most cost-effective way to reduce GHG emissions. Saving energy from homes is not only inexpensive; it can actually result in a positive cash flow for homeowners. The icing on the cake is that by investing in home energy efficiency we would produce thousands of local green jobs for contractors and builders that have been devastated as the housing market has tanked.
Bottom line: we could put money in people’s pockets, stimulate our economy, create new green jobs, reduce our dependence on foreign oil and help save the planet. So what stands in the way? The lack of an accessible and low-cost financing option that makes sense for homeowners. This remains the principle barrier to plucking the lowest of the low hanging fruit.
Fortunately, the broad parameters of a solution are coming into focus—a combination of energy audits that help owners identify cost-effective efficiency measures; low cost financing; and the unique ability of local governments to tie repayments of the loan to the property through the property tax bill.
Here is how it would work. Suzie and Harry Homeowner receive a $5,000 loan from the proposed Montgomery County Home Retrofit Revolving Fund to pay for an energy audit and the recommended efficiency improvements. The Homeowner family would repay the loan through a line item on their property tax bill. The advantage of this approach is that the Homeowners would only have to repay the loan while they owned the house. The new owner would continue to repay the loan through the property tax bill – and enjoy the lower energy costs – after they acquire the property.
Local governments’ ability to tie home energy retrofit loans to the property is a game changer because a key barrier to investments in energy efficiency is the homeowners’ uncertainty about whether they will be in the house long enough to realize the benefits of their investment. Regardless of how long the homeowner stays in a property, the homeowner need only weigh the reduction in her utility bills against the monthly cost of the loan.
Using this approach, a homeowner is likely to make a larger investment sooner, resulting in greater savings and a more marketable home to sell. Today, with current financing options, homeowners often opt for measures with a two to three year payback. Under this model, measures with seven year paybacks can be financed under terms that are attractive and more then pay for themselves.
The County estimates that a $5,000 package of home retrofit measures under this program will reduce the family’s energy consumption and carbon emissions by 20% a year and put a net $230 a year back into their stressed family budget.
This same model will encourage investment in solar technology. The front-end cost of solar and the timeframe to realize “payback” often acts as a deterrent to purchasing home solar systems. Low-cost financing, solar tax credits, and a repayment plan that is linked to the property make investment in solar energy much more affordable. The combination of robust energy efficiency measures and solar energy production could easily reduce GHG emissions from our residential building sector by half.
The role of local government is critical to breaking financial the barriers to home energy retrofits. We want a significant percentage of homeowners to invest $5,000 to improve the energy efficiency of their homes. In order to achieve these goals, we need a robust source of funds. Local governments in this economy are already at the breaking point. We need the assistance of the federal government to make this model work nationwide and to provide the zero interest financing that only the federal government is in a position to provide.
The economic recovery legislation that is being developed by President-elect Obama and Congress should include federal funding to capitalize Local Government Home Retrofit Revolving Funds across the country. Certainly if we can provide trillions for Wall Street with unknown results, we can provide billions for a secure revolving fund that will put people back to work in communities across the country, revitalize our economy, and preserve our planet.
Roger Berliner, an energy lawyer, is Vice President and Lead Member for Energy & Environment on the Montgomery County, Maryland County Council. Ken Brown is a partner at The Ferguson Group and the Executive Director of Climate Communities, a national coalition of cities and counties working to ensure that federal policies empower local climate action.