I am delighted today to join with Mayor Weinberger, BED Director Barbara Grimes and the folks at Waggy’s to celebrate a milestone in terms of moving Vermont forward in meeting important energy and environmental goals. This is also an important step forward for our nation, because what we are announcing here today can and should be a model for the nation and, as a member of the Energy Committee, I will be working to make that happen.
Vermont has long been a leader in renewable energy and energy efficiency. However, access to “out-of-pocket” capital remains an obstacle for many homeowners and businesses to do efficiency work, even though the payback in energy savings can be swift.
“On-bill financing” is one way to remove that barrier. Here’s how it works: A utility offers a customer a loan to pay for the upfront costs of efficiency improvements, and then the customer repays the loan from the money they save on energy costs. Importantly, the payments are automatically made on a line item right on the customer’s utility bills.
While simple in concept, many utilities are reluctant or unable to capitalize and operate an energy efficiency revolving loan fund. That is why in 2011, I authored an amendment directing the Commerce Department’s Economic Development Administration (EDA) to create a $1 million on-bill financing pilot program. I am pleased that after careful consideration, the EDA decided to create that pilot program right here in Burlington.
Why fund this kind of program through the EDA? Because energy efficiency makes sense for businesses, just as much as it does for homeowners. Efficiency improvements save money and make businesses more competitive. And, these investments create jobs in the local economy.
And, why do this in Burlington? Because for more than two decades, Burlington Electric has focused on energy efficiency and conservation. I’d like to thank Barb Grimes and her staff, not just for implementing this innovative project, but for having a mission that recognizes that saving energy is in the public interest.
BED has matched the $1 million federal grant with another $1 million – to provide further incentives to lower the cost of efficiency projects.
Each loan under the program will be structured so that the customer sees monthly energy savings greater than the monthly loan repayment.
The loan fund is expected to serve up to 150 businesses within its first three years. What this means is if you are a small business owner, at no upfront cost, you’ll be able to work with Burlington Electric to make energy upgrades that will save up to 35 percent on your energy consumption.
The first project is right here at Waggy’s Market – an Old North End institution. Improvements will include efficiency upgrades to the refrigeration and LED lighting.
With the projected energy savings, the project will be paid for in 38 months AND will produce monthly positive cash-flow for the owner. After the loan is paid in full, the owner will continue to see about $2,500 annually in electric savings.
Let me end by saying this: Currently, only 40 percent of Burlington businesses that undertake an energy audit actually move forward with energy efficiency investments. The simplicity of this innovative financing program will help more businesses actually follow-through.
And, as businesses pay back their loans, even more businesses will be able to participate. Over time, we hope to expand this opportunity and make this program available for homeowners and schools as well. This program may well become a national model for how we overcome hurdles to energy efficiency investments.
It will help us reduce energy costs to make our businesses more competitive, support jobs as we retrofit our buildings, and reduce greenhouse gas emissions. This is a true win-win-win.