Energy Loan Program

If I told you I had an idea that would reduce our dependence on fossil fuels, would create good paying jobs, would help spur innovation, would reduce individual families energy bills, and wouldn’t cost the tax payers anything would you want to know more about it?

Well the White House apparently didn’t. I shared the following idea with them more than three weeks ago and told them I’d give them two weeks to think about it before I started to promote the idea myself. I’ve been rather sick with the flu and an upper respiratory bug so it took me an extra week but still the Obama Administration has not responded so I leave it up to us – my fellow citizens – to push for this plan.

The Renewable Energy Loan Program

I said it wouldn’t cost anything and here I go putting the word loan in the title but hear me out on this. We’ve got some amazing technology out there in renewable energy – solar PV systems, small-scale wind turbines, and so on but most home-owners can’t overcome the initial instillation costs to take advantage of these things. This is where the loans come in but how do we convince already cash-strapped Americans to take on more debt? Here is how:

The government loans you the money for the cost of installation but the loan is paid back at a rate that matches the cost savings of the system that was installed. 

Let’s look at a simple example. Your electric bill is $200 a month. A solar PV system costs $10,000 and saves you $100 a month on your electric bill. The government lends you $10,000 and you get a solar PV system installed. Now your electric bill should be $100 a month but you’re still going to pay $200 plus the 7% yearly energy cost increase (7% on average) until the system is paid for. Our example would take just over 8 years. After the loan is paid off the consumer begins to see the energy savings. While 8 years may seem like a long time to wait before seeing any benefit those figures are using today’s prices.

The costs for solar and wind is dropping quickly and by the time a loan program could be established we could see costs down by 25% and performance rates nearly double. With twice the performance the loan recipient could see savings of $200 or nearly the total cost of their electricity and by paying the same rate ($200) every month for a system that now costs only $7,500 the loan can be paid off in around 3 years. Even if this was not a no-interest loan the loan could be paid off in less than 4 years.

There are currently installation based financing plans but they are not accessible to everyone. The strength of a government based loan plan is in it being offered to everyone. Why should only wealthy and upper-middle class home-owners with great credit qualify for energy independence? Why shouldn’t low-income communities and families benefit from solar and wind technology and why shouldn’t they be given the chance to reduce their energy bills?

Plan Benefits

Environmental Benefit By creating and promoting such a plan the government can reduce our use of polluting and non-renewable forms of energy. We won’t need to debate things like “Fracking” or mountain-top removal mining because the cost vs. return will make these dirty and dangerous methods of energy extraction less appealing. There is a clear environmental benefit to the loan program.

Government Benefit The US government is a government for and by the people but in the past several decades it’s become increasing controlled by special interests, banks, the healthcare industry, and the energy industry. This loan program reduce the power of all three (if done correctly). These should be direct loans by the government, there should not be third-party-middle-men. Healthier energy means less particulates in the air from coal power plants. This means less kids with asthma. It won’t break the backs of the healthcare industry but it can reduce their ability to make money off of the middle and lower class. Lastly the energy industry, or more specifically, the fossil fuel and nuclear arms of it will have less power because their products will no longer be as desirable. While they won’t go away totally their reduced profits will reduce their influence.

Local Benefits Local communities will see increased jobs for installation and maintenance workers. These are skilled jobs that pay a fair wage. States and communities will also be more empowered when it comes to their local utility monopolies. Being able to produce much of one’s own power creates greater leverage for the consumer. These systems will need to be manufactured somewhere and while China is trying to get out in front of the US a program like this could help infuse the industry will cash and result in more US manufacturing jobs if implemented soon enough.

Individual Benefits The benefits to individual families and property owners is huge. Energy independence or reduced dependence for people of all socioeconomic positions is critical to creating strong families and communities. Reducing the stress that comes from bills that are always going up can free capital that can be saved or spent more effectively.

How do we do it?

We need more than one man with one blog post to get this done. If you’re interested in the idea spread it. Tell your friends and family to ask the government why they don’t have such a program already and let’s work together to push them to establish one. We’ve got to send lots of emails and make lots of calls if we want this to happen so let’s do it!

I’m open to ideas about different ways we can change the plan too – should we include energy reducing things like adding insulation? Maybe. What do you think?