Financing Renewable Energy and Energy Efficiency

The high initial costs of installing renewable energy equipment or improving energy efficiency can deter businesses and homeowners from making such changes.  With long-term financing, however, these projects often save enough money to pay finance costs, leaving the homeowner or business with a profit.  Lowering costs through affordable, easy-to-get financing is increasingly seen as an important step in giving homes and businesses the opportunity to generate energy and access untapped energy-saving opportunities.  States are helping property owners take advantage of these energy resources by enabling local governments to operate and finance renewable energy and energy efficiency loan programs. 

Applying the concept of special improvement districts to renewable energy and energy efficiency projects allows cities and municipalities to help residents finance energy projects.  Local governments in many states have used special improvement districts to raise money for projects such as paving streets, installing streetlights and redeveloping blighted areas.  When applied to energy projects, the mechanism allows local governments to create districts—sometimes called renewable energy districts—and issue bonds to fund renewable and energy efficiency loan programs.