A creative way to pay for that solar heater
Why aren't we greener?
Oil prices are on the rise again, as predicted. Massive projects to tap renewable energy, like a billion-dollar undersea cable connected to windmills on Lāna'i, are years away. Most Hawai'i homes and businesses are lagging in adopting green-energy solutions, even with tax incentives and rebates; it's been estimated that about 70 percent of homes don't have solar water heaters. We're still 90-percent dependent on fossil fuels.
These are reasons to support House Bill 2643, which tackles the biggest challenge faced by consumers who want to get into renewable energy: the upfront cost. Times are tough as it is; who's got extra cash to buy a $6,000 solar hot water heater, even it it pays for itself in the long run and makes your home more valuable?
The bill addresses this problem by creating a loan program, financed by state-issued bonds, that would allow property owners to install clean energy systems and energy-efficient improvements immediately. Homeowners would pay off the loan over time, through an increase in their property tax assessment.
This scheme has several advantages. First, the owner would reap the energy savings immediately — no long wait to recoup the investment. Second, liability for the loan is attached to the property; if the property is sold, the original borrower is off the hook. Third, it could greatly expand the market for green technology, creating much-needed jobs. Fourth, it's pretty simple. Fifth, it's strictly voluntary.
The key sticking point is that it requires Hawai'i's counties to cooperate with the state to set up a loan repayment system linked to the property taxes the counties collect. Cooperation may not come easily; Honolulu's budget director, Rix Maurer, testified against HB 2643. Among his concerns: how the loan would be paid off if the property goes into foreclosure.
Certainly there are default risks, as with any loan program. But those can be mitigated through sensible lending practices and proper screening of applicants.
HB 2643, to be voted on by the Senate Ways and Means Committee today, is the local version of a program known nationally as Property Assessed Clean Energy, a concept endorsed by more than a dozen states so far.
It's a fairly new idea, but a natural one for Hawai'i, with its abundance of under-exploited clean energy sources. A prudently managed PACE program can provide a much-needed jump start to advance Hawai'i's ambitions to wean itself from fossil fuel, and get greener.