I was in Olympia this week and will be again next week to talk about HB 2853—the Energy Efficiency Financing Act—a bill that tries to fix some of the nettlesome problems that prevent us from using public credit to finance energy efficiencies. (I wrote about these issues in “You Say You Want a Constitution.”) HB 2853 goes a long way toward addressing some of the problems that Washington has had with stoking efficiency demand in the residential sector.
Politics being what they are, the schedule of the hearing slipped, and by the time HB 2853 was in front of the committee those of us speaking to HB 2853 had to make it quick.
Here is what I said to the House Technology and Communications Committee on Thursday:
As a result, the comments I gave were necessarily abridged. So here are my thoughts as I would have liked to convey them to the committee.
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I have spent a lot of time looking at how energy efficiencies can lead to new green collar jobs. And the Sightline team thoroughly explored the topic in our Green Collar Jobs Primer. We found that comprehensive energy efficiency retrofits to existing buildings can create lots of new jobs in our region, reduce carbon emissions, and save people money].
How many jobs? A Washington State University analysis found that retrofitting 1 million homes in Washington would create 43,000 new jobs, which would reduce the unemployment rate by more than a percentage point (from 9.5 percent to 8.2 percent).
But a host of obstacles, especially difficulties in obtaining financing, have stood in the way of realizing the economic potential of energy-efficiency projects.
HB 2853 substantively addresses the underlying systemic issues which contribute to the frustration homeowners experience when they want to make energy-saving retrofits but can’t afford the upfront costs. The legislation creates a provision under article 10 of the state constitution allowing local governments to do what utilities already can: loan money for retrofits. Additionally, pay back of loans can be made easier by allowing payments to appear on regular energy or property tax bills.
Paying back a retrofit loan on an energy bill (On Bill Financing) or on a property tax bill (Property Assessed Clean Energy financing) is an important incentive that enables homeowners to borrow money for retrofits. And both of these models have been tried successfully in other states. In Oregon, for example, the City of Portland has used federal stimulus dollars to create a loan loss reserve to support low-interest loans for homeowners who want to make energy-efficiency improvements to their homes. These loans can be paid back “on-bill.”
Creating similar programs in our state, which take advantage of stimulus funding, would be much easier if local governments could develop these low-interest loan programs. It is time for Washington State to catch up with Oregon’s innovation in financing residential retrofits for energy efficiency. This legislation will likely evolve, but its current form would be a major step in the right direction