Buildings account for 48% of energy use in the United States (Architecture2030). Energy efficiency retrofits, such as duct sealing, replacing windows and doors, or improving insulation, can drastically reduce energy needs required for heating, cooling, or lighting a building. However, upfront costs and uncertainty about energy improvement options by homeowners are major barriers to completing projects. Unlike installing solar panels, which are a visible method to reduce traditional energy usage, energy savings through retrofits are hidden in insulation, duct leaks, or poorly sized heating and cooling equipment, for example. Solar panels will not improve a building’s efficiency, as air sealing might, therefore the State identifies retrofits as a cost-effective manner to reduce energy use.

California has enacted innovative financing legislation to help property owners complete energy efficiency projects and to ameliorate upfront costs and longer return-on-investment periods. Assembly Bill (AB) 811 allows homeowners and businesses to voluntarily receive low-interest financing from local governments to pay for retrofit and/or renewable (solar) projects that are paid back through property tax liens over time. If a property owner moves, the property tax is transferred to the new property owner, eliminating risk of lost investment for the current home or business owner.

Several jurisdictions throughout the State have been developing programs, including Sonoma County and the City of Palm Desert. These programs have been wildly popular with both property owners (through potential energy savings and available financing) and contractors (added work load).  Additionally, California municipalities can use the benefits of a municipal energy finance program to help the meet State greenhouse gas emission reduction goals as outlined by AB 32 (the landmark, 2006 Global Warming Solutions Act) goals, as well as to develop a strong “green” economic sector.

A green economy fosters the development of such industries as renewable energy, efficiency technologies, and green building, while improving long-term economic prospects (sustainable industries and job creation) and reducing negative impacts associated with business-as-usual energy use. In fact, between 2007 and 2009, green jobs increased by 5% while overall jobs dropped by 1% (Next 10, 2009).

Santa Barbara County, the first coastal community in California to develop an AB 811-type program, expects to launch its “Central Coast Energy Independence Program” on Earth Day of this year. The Program, will provide financing through “contractual assessments” to cover upfront costs of completing energy efficiency, water conservation, and renewable energy projects.  County officials expect the program to provide 400 contractual assessments in the beginning years, which will translate into significant energy and water savings, greenhouse gas emission reductions, and improvements in quality of life, while also inducing a large demand for work from regional contractors struggling through the recent economic downturn.

About the Author
Andrea Lamartin
(UCSB Bren School 2010 Master's of Environmental Science & Management Candidate)