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Seth Magaziner
U.S. Congressman | RI-02

Efficient Buildings Fund

Idea Category: Climate Change

Problem

Rhode Island’s energy costs are among the highest nationally because the state is a net energy importer and not a significant producer of fossil fuels or hydropower. Rhode Island’s publicly owned building stock also tends to be old and energy inefficient. Addressing this situation also provides an opportunity to respond to the fact that the state has recovered slowly from the recession, with particularly high unemployment in the building and construction trades.

While utilities and other private sector actors often offer financing for partial energy retrofits, these programs often require short payback periods which make only small improvements (new lightbulbs, etc) economically viable. For bigger projects, like envelope-level upgrades to large buildings, municipalities usually have to rely on traditional bonding, which can be expensive and cumbersome, particularly for financially distressed communities with low credit ratings.

Solution

The Efficient Buildings Fund (EBF) is a revolving loan fund that provides low cost financing for municipally-owned alternative energy instillations and energy retrofits of municipal buildings. EBF addresses a financing gap that municipalities face when investing in major energy efficiency and renewable energy projects, putting tradesmen and women to work on projects that help municipalities save money on energy costs while also reducing their carbon footprints. The EBF provides flexible, long-term financing that allows large retrofit projects to be cash-flow positive to municipalities so they can start saving money right away. Capitalized in part from federal stimulus funds and proceeds from the Regional Greenhouse Gas Initiative, the EBF provides long-term loans to municipalities at a discounted rate to what they could receive from the bond market.