LOS ANGELES, CA, Jun 04 (MARKET WIRE) —
Our homes produce 20 percent of all U.S. greenhouse gas emissions, and
study after study finds that efficiency measures are the cheapest way to
save energy. Residential upgrades would pay for themselves by reducing
home energy usage by 40 percent and creating green jobs. Unfortunately,
no one has figured out how to cover the costs of a nationwide retrofit.
A new report from the Milken Institute, “Financing the Residential
Retrofit Revolution,” finds that various government programs and
private-sector financing options, if properly integrated, can jumpstart
the transition to a cleaner, more efficient use of energy in houses.
“The federal stimulus package included a record level of public funding
for energy efficiency, but it’s still not enough to do the job. No public
agency can bring retrofitting to an effective scale on its own,” said
Martha Amram, Senior Fellow at the Milken Institute. “Overcoming the
obstacles, such as consumer reluctance to the up-front costs, requires
coordination between the public and private sectors at the national level
to create scalable financial resources. This will have a real impact and
change the way our homes consume energy.”
“Financing the Residential Retrofit Revolution” reviews the patchwork
quilt of state-level financing options and existing programs, as well as
solutions that can help build a sustainable national market for energy
efficiency. The report also lays out a role for the federal government in
scaling up the retrofit market.
The suggested financing solutions include:
– Energy efficient mortgages
– Unsecured home improvement loans
– Property tax-based financing: Property Assessed Clean Energy (PACE)
– On-bill payment through utilities
Some of the suggested program solutions are:
– Creating uniform national program standards to create homogeneous loan
pools
– Engaging consumers
– Tipping replacement decisions toward energy efficiency
The current economic climate poses significant challenges to making
progress on this issue. Homeowners are intent on reducing their debt
load; state and local governments are facing budget crises; and the
mortgage meltdown has all but crushed the securitization market. However,
the report states that a combination of public programs and private
financing can overcome these hurdles by building on existing successes,
looking for best practices and carefully identifying mission-oriented
investors who will be willing to act as first movers in the private
sector.
The report is the result of a Financial Innovations Lab(TM) led by the
Milken Institute in conjunction with the Energy Programs Consortium and
with the support of the Ford Foundation. This first-of-its kind gathering
of investors, lenders, federal and state energy officials, energy
efficiency experts, and leaders from utilities, clean tech companies,
foundations and community organizations was held in November 2009.
Financial Innovations Labs(TM) are part of the Milken Institute’s
continuing leadership in promoting financial innovations to help solve
ongoing social, economic and environmental challenges. The full report is
available at www.milkeninstitute.org.
About the Milken Institute: The Milken Institute is a nonprofit,
independent economic think tank whose mission is to improve the lives and
economic conditions of diverse populations around the world by helping
business and public policy leaders identify and implement innovative
ideas for creating broad-based prosperity. It is based in Santa Monica,
CA. (www.milkeninstitute.org)
Contact
Jennifer Manfre
Associate Director of Communications
(310) 570-4623
jmanfre@milkeninstitute.org
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