Swapping out incandescent lightbulbs with the best compact fluorescent lightbulbs and replacing an old showerhead with a low-flow showerhead are easy, low-cost ways to lower your monthly utility bills. However, the up-front costs for some energy-efficiency-boosting projects can be substantial, such as installing new heating and cooling equipment and windows.
In an effort to spur homeowners to make energy-efficient improvements, municipalities nationwide are turning to Property Assessed Clean Energy, or PACE, bonds. A town issues a PACE bond and uses that money to lend homeowners the money to undertake energy-saving upgrades; the homeowners pay back the loans via a surcharge on their property taxes. Read more about PACE bonds in "10 Questions for . . . Jack Hidary, Chairman of SmartTransportation.org."
The Town of Babylon, on Long Island, New York, has implemented a PACE program, providing up to $12,000 per home for energy-saving improvements that are made based on an energy audit. It's one of eight municipalities participating in the Long Island Green Homes & Buildings Consortium.
"The town was looking to reduce energy consumption," says Sammy Chu, program director for the Town of Babylon. "We decided to create a financial tool to address the up-front costs of making homes more energy efficient."
In the Town of Babylon, homeowners arrange for a payback plan that calls for monthly payments less than the annual energy savings estimated by the energy audit. So a household with annual energy savings of $1,000 would make monthly payments of about $83, with an additional 3 percent administrative fee, until the loan is paid off. If a home is sold before the loan is paid off, the new owners assume the loan.
So far, 450 of 60,000 households in the Town of Babylon have signed up for the program, and about half of those have completed their project.
—Kimberly Janeway
Essential information: Check out these simple ways to lower your energy costs. And learn more about other energy-saving incentive programs, including cash for appliances and cash for caulkers, or Homestar.
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