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Financing for renewable energy to save US$22m/a

The state of Massachusetts has launched a new financing plan that will support renewable energy and energy efficiency projects at state buildings, saving millions of dollars in energy costs each year while creating jobs and supporting the administration's clean energy goals.

The Commonwealth Clean Energy Investment Program will streamline financing for 32 projects that will yield US$22 million a year in energy cost savings. It is part of the administration's Commonwealth Energy Solutions initiative.

"With this new financing plan, we can move quickly to put workers on job sites across the state," says Governor Deval Patrick. "And the added benefit is that these projects will pay for themselves."

The announcement was made at North Shore Community College in Danvers, where a comprehensive energy efficiency project will be the programme's first beneficiary due to the use of state-backed general obligation bonds to finance projects that pay off the debt through energy savings.

Last year, NSCC announced construction of the first zero net energy facility in the state's building portfolio. The latest upgrade will use US$3.6m to cut energy use by 32% and reduce annual energy costs by US$400,000.

Other projects that will start within the next few months include the installation of 1.65 MW wind turbines at a state Corrections facility and at a community college, as well as energy efficiency projects at another college, University of Massachusetts, 17 court buildings and the training academy of the State Police.

Financing to have 'positive and effective' impact

"The Clean Energy Investment Program's new financing plan will have a very positive and effective impact," explains Lieutenant Governor Timothy Murray. "As we continue to focus on creating jobs across the Commonwealth, this new plan will put people to work while also creating another cost-saving solution that will benefit our taxpayers and support future investment for energy efficiency."

“This innovative financing mechanism will help accelerate dozens of projects in the pipeline and make Massachusetts a leader in clean and renewable energy investment,” adds finance secretary Jay Gonzalez.

“In addition to increasing our use of renewable energies, this program will also save the State and our taxpayers through improved efficiency,” says local congressman Barry Finegold.

State invests US$213m in energy projects

During the past 25 years, the state of Massachusetts has invested US$213m in 56 projects at state facilities, with annual energy savings of US$26m. The projects have been funded through the state's Tax Exempt Lease Program or through contracts with energy service companies, and Commonwealth Clean Energy Investment Program will use low-cost general obligation bond financing outside of state government's annual capital spending limit for energy projects that save enough money to pay the debt service on bonds that finance them.

"This new low-cost financing mechanism will allow the Commonwealth to invest more in energy efficiency at its own facilities over the next four years than it has in the past two decades," explains Energy & Environmental Affairs Secretary Ian Bowles. "These investments will pay for themselves as they cut energy waste, reduce operating costs, cut GHG emissions, and strengthen Massachusetts's clean energy economy."

Because the changes will be self-supporting and bond-financed projects will pay for themselves in energy savings, treating these financings outside the state's bond cap is consistent with the Administration's debt affordability policy. General obligation bonds are the least expensive source of funds for the state, in part due to its AA bond rating, but the financial integrity of new programmes will be reviewed to verify that savings will support repayment of the bonds.

Many projects may be eligible for renewable energy

The state has dozens of renewable energy and energy efficiency projects at state facilities that could be eligible for the new financing programme. Once reviewed and confirmed that they are eligible, some projects could begin within months, and all within two years. If all are approved and completed, the projects will save US$22m a year in energy costs, while generating jobs for construction workers, project administrators, analysts and engineers.

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Energy efficiency  •  Green building  •  Policy, investment and markets  •  Solar electricity  •  Wind power

 

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