Energy-efficiency doesn’t come cheap, but the Fenty administration wants to be the banker that makes it happen for D.C. property owners.
The District has applied for a U.S. Department of Energy grant of $35 million that it would lend to homeowners and commercial property owners for energy-efficiency improvements like new storm windows and doors, solar panels or light fixtures. The plan also involves the sale of up to $250 million in bonds, though the city wouldn’t be on the hook for the debt.
Loans may be available for
» Heating, ventilation and air-conditioning systems
» Automatic energy control systems
» Insulation, or weather stripping
» Weather stripping
Those upgrades are a hard sell, especially in tough economic times, said Sean Madigan, Mayor Adrian Fenty’s spokesman. Putting down $25,000 or more up front to capture $100 or $200 a month savings is a “difficult thing to do.” “All that stuff is expensive to do out of pocket,” Madigan said. “This incentivizes them to make that leap. The money you save in energy savings would be significantly more than what you’d pay for the upgrades.”
The administration, through legislation now before the D.C. Council, is proposing to establish a dedicated fund from which the loans would be distributed. Property owners who borrow from the fund would repay their loans through a special assessment tied to their real estate tax bill.
Fenty also hopes to sell up to $250 million in bonds to keep the energy loan fund going once the federal grant runs out, using the special assessment revenue as a dedicated stream to repay the debt.
“You have to spend money to make money,” Fenty told The Examiner. “It’s well-accepted now that there is a legitimate government purpose in promoting more energy-efficient ways of doing things.” Madigan said the District would not be on the hook for the bonds, nor would the bonds count against theDistrict’s debt cap — the amount owed by the city for debt service cannot, by law, total more than 12 percent of annual expenses. D.C. is on pace to hit 11.93 percent in fiscal 2011, Chief Financial Officer Natwar Gandhi has said.
The loan would be linked to the property, not the owner — a foreclosure or sale would not affect whether the city recouped its money. Ward 3 Councilwoman Mary Cheh, who has oversight of environmental issues, is backing the Fenty plan with a “Sense of the Council” resolution. Cheh could not be reached for comment Friday. “Mayor Fenty and the Council of the District of Columbia are united behind a common goal to reduce greenhouse gas emissions, enhance and expand energy efficiency, and facilitate economic stimulus throughout the District,” the resolution states.
