Federal Loan Guarantees for Energy Efficiency Building Retrofits Will Create Jobs, Lower Energy Bills, Says Alliance
Washington, D.C., December 16, 2009 – The Alliance to Save Energy today praised the House of Representatives for allowing federal loan guarantees to be applied to energy efficiency projects funded through Property Assessed Clean Energy (PACE) bonds.
The PACE bonds provision – advocated by Rep. Steve Israel (D-N.Y.), an honorary vice-chair on the Alliance’s Board of Directors – is part of the House-passed $75 billion Jobs for Main Street Act.
Alliance President Kateri Callahan observed, “We are delighted that the House-passed jobs bill includes Department of Energy (DOE) loan guarantees for energy efficiency projects, including retrofits of residential, commercial and industrial buildings, facilities and equipment. At a time when access to credit is severely limited, this authority will enable many energy efficiency retrofit projects to move forward, create new jobs and reduce U.S. homeowners’ energy bills.
“The Alliance is especially pleased that the new loan guarantee authority will encompass projects funded through PACE bonds, thereby facilitating immediate, federally guaranteed municipal financing for important energy efficiency projects,” Callahan said.
“However,” she added, “we are disappointed that bill does not contain the major residential ‘Home Star’ retrofit initiative; but we fully expect both the House and the Senate to take up that initiative in January.”
PACE bonds allow property owners to finance energy efficiency retrofits through a loan voluntarily attached to the borrower’s property tax bill. These long-term loans could be transferred along with the sale of the property in order to accelerate investment in energy efficiency retrofits. Fifteen states have enacted bills that would allow this type of municipal financing, while several more are considering such bills or running pilot projects.
The loan guarantee authority contained in the jobs bill is based on an amendment to the Energy Policy Act of 2005 that was included in the February 2009 stimulus law; and it is subject to the stimulus law’s sunset date of September 30, 2011. The Alliance plans to work with Rep. Israel and other members of Congress to extend the guarantee authority beyond that date.
“Energy efficiency is a proven job creator, and expanding efficiency projects with innovative financing mechanisms like PACE bonds and loan guarantees will help property owners get efficient, reduce emissions and create new jobs and new opportunities for our clean energy businesses. I’m pleased that the House approved expanding the Department of Energy loan guarantee authority to include energy efficiency projects, and I look forward to expanding PACE bond programs across the country,” said Rep. Israel.
Other key energy efficiency provisions in the bill include:
Innovative Technology Loan Guarantee Program
This provision funds an additional $2 billion to DOE for the Innovative Technology Loan Guarantee Program; the provision amends the American Recovery and Reinvestment Act (stimulus law) to allow DOE to make loan guarantees for the rapid deployment of energy efficiency projects that commence construction prior to September 30, 2011.
Training and Employment Services
Provides $1.25 billion for training and employment services under the Workforce Investment Act, of which $750 million is to be used for a program of competitive grants for worker training and placement in high growth and emerging industry sectors, with $275 million to be used for job training projects that prepare workers for careers in energy efficiency and renewable energy.
Federal Transit Administration
Provides $6.15 billion for transit capital assistance grants, distributed by formula to urban and non urbanized areas. $100 million is to be distributed as discretionary grants to public transit agencies for capital investments that will help reduce the energy consumption and greenhouse gas emissions of their public transportation system; priority is to be given to projects based on total energy savings projected from the investment.
Fixed Guideway Infrastructure Investment
Provides $1.75 billion in state and local government grants for “fixed guideway” systems, including heavy rail, commuter rail, light rail, monorail, trolleybus, aerial tramway, inclined plane, cable car, automated guideway transit, ferryboats, that portion of motor bus service operated on exclusive or controlled rights-of-way and high-occupancy-vehicle (HOV) lanes.
“These important provisions will help to immediately create clean energy jobs, and we anticipate a further jobs bill in January that we hope will include a residential retrofit initiative such as President Obama has endorsed,” Callahan said.
“An initiative to lower the cost of installing energy-efficient products and systems would not only create home-grown jobs for product manufacturers, retailers and installers, it also would benefit homeowners’ pocketbooks, national security and the effort to curb global climate change,” she said.