Guest editorial: Energy-efficiency plans need close examination
June 5, 2015
A public hearing will be held on July 1, at the Summit County Courthouse in Coalville to consider the Be Wise, Energize CDA Plan (the "Plan"). Pursuant to the Plan a $4.3 million qualified energy conservation bond will be allocated for a community development project area plan that will provide low interest loans to qualified residents throughout Summit County for work on their homes to reduce residential energy use. Two positions will be established to implement this plan: a Program Administrator and a Loan Service Provider.
According to the Staff Report dated May 27, "specific program policies and procedures will be implemented and overseen by the Program Administrator " The Staff Report projects certain benefits from the Plan, including the creation of 66 jobs, utility cost savings, energy efficiency and increased property values of 6 to 9 percent for energy efficient homes.
Although I agree with the goal of increasing residential energy efficiency, because of the lack of important information about the Plan, such as its policies and procedures, and the questionably optimistic economic assumptions on which it is partially based, I think that it would be a mistake to approve this "pig in a poke" at the upcoming July 1st hearing. There are too many questions that need to be answered.
We don’t know how the low-interest loans will be administered or what the interest rate, term or maximum loan amount will be. We don’t know who will qualify for these loans or how many loans are expected to be made. Since interest rates for home loans currently are at historically low levels, it isn’t clear that a slightly lower rate will provide much of an incentive for homeowners to spend on energy efficiency projects. Has a market study been done to determine how important lower interest rates are to a homeowner’s decision on a project of this nature and how much of a rate subsidy is needed to make the Plan succeed? If no study has been done, it should be done now. The Plan should not proceed based on uninformed speculation.
As a practical matter, a homeowner will have to be convinced that there will be an adequate savings from a home energy efficiency project to justify its cost and inconvenience. A minor savings in the financing of such a project will not be a determining factor if adequate savings from the project are not assured. Homeowners often are skeptical of the claims that are made about possible savings from projects. Can they really trust the predictions of savings by a home energy auditor who also wants to sell them new windows or more insulation, or maybe steer them to a contractor? These practical issues should be considered by Council members as they examine the Plan.
A better way to promote energy efficiency would be to promote low-cost independent energy audits for County residents through a bulk purchase plan and to develop useful standard plans and projections of likely savings for common energy efficiency problems. That would help County residents identify problems and better understand what their options are when creating practical plans for saving energy. I would couple this approach with a comprehensive after- project audit program so residents could determine if the various types of fixes really worked to save energy costs as projected. Such a program would be less expensive than the proposed Plan and would probably be equally effective.
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It is also important that the costs and benefits of any government program of this type be independently assessed. If it doesn’t work as expected, changes will need to be made. The purpose of this Plan should be to save energy in an efficient way, not to make us feel good that we are "doing something" about the environment. Good intentions are not an acceptable substitute for real results.