More than half the houses in the U.S. were built before 1970. (Photo courtesy of the National Renewable Energy Laborator)
Reducing your carbon footprint
by using less energy can cost
money. Efficient cars, energy
efficient homes, and energy-saving
appliances all take money. That’s
why some states are testing whether
homeowners would be willing
to borrow money to upgrade their
homes and, in turn, save a few
bucks in energy costs. In one
state, the plan is to get private
banks and credit unions to finance
energy efficiency. Peter Payette reports:
Transcript
Reducing your carbon footprint
by using less energy can cost
money. Efficient cars, energy
efficient homes, and energy-saving
appliances all take money. That’s
why some states are testing whether
homeowners would be willing
to borrow money to upgrade their
homes and, in turn, save a few
bucks in energy costs. In one
state, the plan is to get private
banks and credit unions to finance
energy efficiency. Peter Payette reports:
When you hear green building, you might think of a fancy new house with solar panels. But most homes are not new, so reducing the amount of energy communities use means doing something about old houses.
Max Strickland owns a business in Michigan that certifies green homes and buildings. He says more than half the houses in the U.S. were built before 1970.
“We had very little energy code requirements previous to that.”
But upgrades cost money that many homes owners don’t always have. And a lot of people saw whatever equity they had in their house disappear during the past couple of years.
Now, the State of Michigan is trying to help people find the money to make their homes more energy efficient. The program is called Michigan Saves. The state launched the pilot project in a rural area of the state. The pilot is a collaboration of a local credit union, an electric cooperative and a building supply company.
Borrowers will have their new payment tacked onto their monthly utility bill.
Trevor Williams is with Brown Lumber, the building supply company involved in the pilot. Williams says it’s likely most of the improvements will be in heating costs. He says to begin with, home owners will be encouraged to have an energy audit.
“The audit it would say things that need to be done, the top three things that are recommended. Furnace replacement, ceiling ducts and weatherizing the house those going to be the three most common items.”
But homeowners can also borrow money for new energy efficient appliances like refrigerators and hot water heaters. Sometimes loans like this are promoted as immediately paying for themselves. That is, it’s suggested the money you save on your utility bills will fully cover your new payment. That’s not necessarily the case.
Marc McKeller is with Members Credit Union which is financing the project. He says after a few years, people will be able to break even on the costs. Government tax incentives and other rebates will help that happen. But McKellar says people shouldn’t expect to take out a loan, retrofit their house and not have more to pay each month.
“The only way it could be was if a government was to give zero percent loans out and that they received tremendous rebates from the utilities and that they received a tremendous government credit.”
But, McKellar says it’s still a good deal. The interest rate for project’s loans will be a little bit better because the state is backing the loans.
And tight credit means not many banks are loaning people money to make their house energy efficient and not many people are putting money into a home that’s lost value because of the housing market bust. That’s one of the reasons they need to run a pilot project.
“They’re trying to determine through this study, how do you get a consumer to actually do this and what are the benefits?”
The directors of Michigan Saves hope to roll out a statewide program later this year. So far no banks have agreed to participate but there are other credit unions interested in the concept.
For The Environment Report, I’m Peter Payette.
