The state recently released a letter notifying NC cities and counties of an opportunity to access a relatively inexpensive source of money: Qualified Energy Conservation Bonds (QECBs). Through QECBs, the federal government will provide a cash subsidy for 70% of the taxable interest rate. This subsidy can in effect “buy down” a 5% interest rate to 1.5%.
The state’s large cities and counties (greater than 100,000 people) automatically receive an allocation of the bonding capacity based on their population. Smaller cities and counties, as well as private entities, must submit proposals to the state for access to the funds.
These bonds can be used to finance a wide capital expenditures incurred for purposes of:
1. Reducing energy consumption in publicly‐owned buildings by at least 20 percent,
2. Implementing green community programs,
3. Rural development involving the production of electricity from renewable energy resources, or
4. Any qualified facility……which include wind facilities, closed‐loop and open‐loop biomass facilities, geothermal or solar energy facilities, small irrigation power facilities, landfill gas facilities, trash to energy facilities, hydropower facilities and marine and hydrokinetic renewable energy facilities
5. Expenditures with respect to research facilities, and research grants, to support research in –
a. Development of cellulosic ethanol or other non‐fossil fuels,
b. Technologies for the capture and sequestration of carbon dioxide produced through the use of fossil fuels,
c. Increasing the efficiency of existing technologies for producing non‐fossil fuels,
d. Automobile battery technologies and other technologies to reduce fossil fuel consumption in transportation, or
e. Technologies to reduce energy use in buildings
6. Mass commuting facilities and related facilities that reduce the consumption of energy, including expenditures to reduce pollution from vehicles used for mass commuting.
7. Demonstration projects designed to promote the commercialization of –
a. Green building technology,
b. Conversion of agricultural waste for use in the production of fuel or otherwise,
c. Advanced battery manufacturing technologies,
d. Technologies to reduce peak use of electricity, or
e. Technologies for the capture and sequestration of carbon dioxide emitted from combusting fossil fuels in order to produce electricity.
8. Public education campaigns to promote energy efficiency.
More information on the QECB allocation process for large cities and counties, as well as small cities and counties and private entities, visit: http://www.nctreasurer.com/NR/rdonlyres/767B4001-1AA6-4F39-B3C9-A25006440AC5/0/QECBOverviewLetter.pdf
For more general information about QECBs, visit: http://www1.eere.energy.gov/wip/solutioncenter/webcasts/default.html (search for QECB)
Mary Tiger was formerly on staff with the UNC Environmental Finance Center.