The biggest challenge for many Hawai'i residents who want to install solar water heaters or rooftop systems is the up front cost—which is why state lawmakers and industry experts are working on a way for more people to benefit from clean energy and it's savings by getting it with no money down.
"What we want to do is make sure that over that there's going to the financing available to make sure that folks have the ability to afford solar, afford wind, afford the renewable energy technologies of tomorrow that are going to make their electric bills drop down to next to nothing," said Representative Chris Lee, Chairman of the House Energy and Environmental Protection Committee.
The goal is to expand renewable energy to low income residents, renters and non-profits.
"There's been some criticism in the past that only rich people can afford PV [photovoltaic solar] etc.— and even with the tax credits – but what this really does is opens it up to everyone," said Senator Mike Gabbard, Chairman of the Senate Energy & Environment Committee. "We're spending 4 to 6 billion dollars every year importing over 40 million barrels of oil and the reason— it just doesn't make sense when we live here in paradise— where we've got world class wind, world class sun, geo-thermal, ocean-thermal wave energy all built in here – so this is huge."
Two bills moving through both the Senate (SB 1087) and House (HB 856) would allow the state to issue bond-financed loans for renewable energy systems. Under the green infrastructure financing – consumers would repay the loans from the energy savings on their electric bills without the up front costs.
"A homeowner or a renter who's getting solar on their home would do it the same way they do it now, they'd use a contractor, the system would be installed but instead of having to write a giant check they would pay it off overtime as part of their utility bill," said Cisco DeVries, President of Renewable Funding – a California-based firm that specializes in financing solutions for renewable energy. "It should be very simple and it should really make it easier for a lot of people who could save money now to start saving money."
Residents with photovoltaic solar panels or solar heaters cut an estimated 15-20% from their energy bill each month-- a sizable savings considering Hawai'i residents pay more than three times the national average electricity rate.
"The one thing that's really hurting our economy is the fact that energy prices keep going up and up and up and this is one way to allow people to get away from that – to stabilize their electric bills and reduce them overtime and that's going to be to the biggest thing we can do to help our working families," said Rep. Lee.
The revenue bonds would be backed by the public benefits fee residents are already charged on their electric bill. The on-bill financing model has proven successful in other industries, but experts say it would be a first for clean energy. It's being heralded as a game changer—a way to make renewable energy affordable and available to the masses.
"I think this is history in the making I think Hawaii is on to something that will not only be a benefit here to folks that live in the state but also a model that we can use all across the country," said DeVries. "I think for Hawaii what this means is a lot more people are going to be able to save a lot more money on their utility bills and we're going to go to a long way to helping the state meet its energy reduction and clean energy goals."
It will be sometime before green infrastructure financing will be available to the public. First the state legislature must pass the bills that will provide the framework for securitization. Then the Public Utilities Commission would need to issue an order outlining the program, which includes lending criteria and repayment terms. Officials say they hope to expedite the process so that green infrastructure financing is available by 2015.