A way to finance greener homes

There's nothing like the certainty of repayment to get lenders to open up their vaults. And a bill in Albany aims to use that lure to attract private lenders to a program for making homes and businesses more energy-efficient. It's a little bit of loose-ends-tying that could save energy and create jobs.

In 2009, this page backed and Gov. David A. Paterson signed a bill called Green Jobs/Green New York. The fuel for the program was the money that utilities had spent to buy emissions allowances auctioned by the Regional Greenhouse Gas Initiative, a multistate effort to reduce greenhouse gases. The jobs bill allocated $112 million of that to the New York State Energy Research and Development Authority, to spend on energy efficiency.

The authority has been making loans, but one more step is needed to attract private lending: on-bill financing. Utility customers opt to make buildings more energy-efficient. Private lenders front the money. Utilities collect the loan payments on the bill, scientifically projecting the repayment to be the same as the reduced energy cost. So the bottom line on bills stays the same, until the loans are paid off. Then it drops.

The utilities collect for the lenders. So it's a safe loan. And the state energy agency will pay utilities to administer the payment collection.

Some utilities and state senators are wary. But this is a double-green bill, saving money and growing jobs in the energy-efficiency industry. It works in Massachusetts and can work here too.