Overcoming Hurdles for Local Government Clean Energy Programming

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As local governments begin to assume a larger role in reducing their community’s carbon footprint, more and more are finding a new reason for community engagement: promoting energy efficiency and renewable energy projects on residential and commercial properties.  Local climate action plans and American Recovery and Reinvestment Act (ARRA) funding have prompted much of this community engagement.

Local governments across the country are conducting assessments of their community’s greenhouse gas emissions and finding, not surprisingly, that much of the emissions fall outside of their direct control (i.e. beyond the fleet and building).  For example, Durham County’s Greenhouse Gas Inventory revealed that community emissions, those from residents in their homes and by local business and agencies as they carried out their operations, accounted for nearly 98% of the county’s overall emissions in 2005.  Many local governments feel that if they are to take responsibility for the carbon footprint of their jurisdiction, they must promote community energy efficiency and renewable energy projects to make any meaningful change.

Additionally, through ARRA dollars, the federal government is incentivizing community-level energy engagement through Energy Efficiency and Conservation Block Grants, Retro-fit Ramp Up Grants and other federal financing.  Given that one of the most significant hurdles to the adoption of energy efficiency and renewable energy projects are the large up-front costs required, a significant portion of the federal financing encourages local governments to engage with their community in a way that breaks down the financial barrier for energy project investment in the community.

Much focus lately has on fallen using federal funding to seed local energy finance programs like revolving loan funds or local government energy assessment program (commonly known as PACE programs) as methods to help community members clear this financial hurdle. These types of programs are being offered and proposed by other local governments across the county, but the forms they take within the laws of North Carolina have yet to be decided.  The NC General Assembly passed two bills last year (S.L. 2003-416 and S.L. 2009-522) that attempt to give the authority to NC local governments to provide financing assistance for energy projects to residents and businesses, but that authority is still not quite clear.

Recently, representatives from NC local governments, the financial industry, the State Treasurer (LGC) and energy product suppliers/manufacturers convened at the School of Government to help navigate a path toward such program implementation.  The group identified that local governments must clear a few hurdles themselves before moving forward with local energy finance programs.  Many of these hurdles are identified in a recent SOG Local Finance Bulletin by Kara Millonzi, “Addressing Climate Change Locally: North Carolina Local Government Financing Programs for Private Energy Efficiency Project.”

Over the summer, stakeholders will be looking to clarifying legislation (like recently proposed HB 1771, HB 1887 and HB 1888), program experts and examples in other sectors (i.e. community development and affordable housing) to lay a clear path toward local energy finance programs.  I am interested in your thoughts on what community-level energy finance programs can glean from local government community development and affordable housing programs.

Mary Tiger was formerly on staff with the UNC Environmental Finance Center.

One Response to “Overcoming Hurdles for Local Government Clean Energy Programming”

  1. Forbes reports on Connecticut’s statewide energy efficiency loan (PACE) program here. Forbes describes the program this way: “PACE financing enables property owners to take out a loan, usually via city- or state-organized bonds, to pay for energy efficiency upgrades or onsite renewable energy. Loans are repaid, typically over 20 years, through an annual supplemental property tax assessment.”

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