Michigan must keep PACE on home energy efficiency
What was your home heating bill last month? Was it $300, $400, maybe even $500?
All around us, there is much buzz about the green economy. From clean energy projects to advanced batteries, Michigan is properly branding itself as a world capitol of innovation and green technology. Catching the clean energy wave is just the kind of sensible “big idea” that Michigan needs to reboot our economy and leverage our industrial and intellectual assets. However, all of the branding in the world won’t help if we don’t take concrete action to green our economy.
Talk is cheap; but, thankfully it turns out that action is even cheaper. Allow us to explain:
The simplest, cleanest and most cost effective clean energy program possible is energy conservation. That’s right; the greenest energy is the energy that we never use. Often lost in the buzz around wind and solar, energy conservation is by far the most sensible and easy means to: save money for Michigan families, reduce pollution, and put thousands of people back to work immediately. Installing new insulation, energy efficient windows and more efficient lighting are all tactics that we can employ right now to jumpstart our economy and save money today. So, why haven’t we picked this “low hanging fruit” already?
Easy and affordable energy efficiency projects are usually not implemented because the up-front costs of making the improvements are onerous, especially during uncertain economic times. Even families that are doing well are hesitant to spend their savings in a tough economy. Also, borrowing is especially difficult in this environment with some second mortgages pushing 8 percent in interest. However, most energy efficiency investments pay themselves off in energy savings in less than 10 years. In short, financing remains the one challenge that stands between many Michigan homeowners and lower energy bills.
Fortunately, together with Ann Arbor Mayor John Hieftje and a coalition of clean energy and green economy advocates, we are on the path to overcome this final stumbling block with the introduction of Property Assessed Clean Energy (PACE) enabling legislation. Sponsored by Rep. Rebekah Warren, House Bill 5640 will authorize local governments and citizens to engage in a voluntary program to finance energy efficiency improvements through future taxes and the use of special assessments.
Here’s how this program would work: (1) a property owner would contact the city or county; (2) an energy audit will identify the highest value energy efficiency improvements; (3) a financing plan will be agreed to between the government and the property owner stipulating the cost of the improvements and the appropriate rate of the special assessment needed to refund the community over time; and (4) the improvements will be made, saving money and reducing pollution immediately.
The program can be flexible to meet community needs, but most energy audits show that residents can save more money every year in their energy bills than they will pay annually for the improvements - making this a genuine win-win proposition. When the costs are paid off, the homeowner will stop paying the special assessment, but continue to enjoy the benefits of an improved and more efficient home. At the same time, property taxes will remain unchanged for those who choose not to participate in the program.
Sixteen states from every region and of all political persuasions now have this enabling legislation in place: California, Colorado, Illinois, Louisiana, Maryland, Nevada, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Texas, Vermont, Virginia, Wisconsin. These states are united on this issue because they realize, like us, that this is an opportunity to not only preserve our environment, but also provide you the tools to save your hard-earned money.
So when you open your home heating bill this month, don’t just put on a sweater and turn down the thermostat - call your legislators and let them know that you support HB 5640.
Jeff Irwin, D-Ann Arbor, is a Washtenaw County commissioner, and Rep. Rebekah Warren, D-Ann Arbor, represents the 53rd District in the Michigan State House of Representatives.