Energy Efficiency Financing Made Easy

Energy efficiency is regularly called our cheapest, cleanest, and fastest energy source.  It’s good for home comfort and safety, good for our pocketbooks, and good for the Earth – so it’s easy to agree that efficiency is a good idea.  Financing that efficiency, on the other hand, has been the elephant in the middle of many a home energy audit.

As an investment, energy efficiency differs from other home improvements because it increases the value and comfort of your home and reduces your operating expenses.  (Compare that to granite countertops, which impress neighbors and appraisers without cutting your cooking costs.)

Homeowners who work with Rockland-based Evergreen Home Performance on a comprehensive energy efficiency project regularly cut their energy use by 25-50% and earn a 10% annual return on their investments – which is far better than most investment opportunities these days.

Investing in energy efficiency is a good financial plan, even without the long-term rewards of improved comfort, increased home value, more sustainable energy consumption, and dramatically reduced energy bills.  Of course, homeowners still have to come up with the initial investment, and many homeowners talk themselves out audits – or even free consults like the ones Evergreen offers – because they’re worried about financing.

There’s no need to worry, though.  Homeowners pursuing efficiency projects have more financing options than ever, including long-term loans that complement the traditional arsenal of cash, credit, and home equity lines.  Last month, Efficiency Maine launched the PowerSaver loan program to put energy efficiency within reach for all homeowners and make weatherization and comfort improvements easy and affordable statewide.   Developed by the U.S. Department of Housing and Urban Development and administered by AFC First, the program complements Efficiency Maine’s year-old PACE program.

The loans offer 4.99% APR and similar conditions, but have a few key differences.  Here’s a primer:

  • If you live in a town that has opted in to PACE: You can borrow $6500-$15,000 for up to 15 years.  You’ll need an energy audit to identify the most cost-effective improvements and confirm energy savings of at least 20%, so look for a contractor that includes this analysis.
  • If your town hasn’t authorized PACE: PowerSaver is the loan for you.  Concerned that nearly half of all Maine residents lacked access to PACE funding, Efficiency Maine launched PowerSaver.  The FHA loan is available statewide, with no municipal requirements.
  • If you need a smaller, unsecured loan:  Homeowners who pursue incremental upgrades can borrow up to $7500, for terms of up to 10 years, with an unsecured PowerSaver loan.  Since these loans are not tied to the property, they are perfect for homeowners who have don’t have the equity to qualify for a larger, secured loan.
  • If you need a larger loan:  Homeowners can borrow up to $25,000 under PowerSaver.  This larger loan will accommodate efficiency basics – like air sealing, insulation, and basement encapsulation – as well as systems upgrades and renewable energy installations.  The standard loan term of 15 years is even extended to 20 years with a solar or wind project.
  • If you want more flexibility:  Either PowerSaver loan can be combined with a PACE loan. Homeowners might borrow the maximum amount under each program, for a total of $40,000, or pair a PACE loan with a smaller, unsecured PowerSaver loan.

Applying for the loans is easy at EfficiencyMaine, and loan administrators encourage homeowners to contact AFC First directly to sort out the financing options.  Even if PowerSaver and PACE aren’t right for you, energy efficiency is – and there are plenty of ways to pay for it.

Richard Burbank, President of Evergreen Home Performance, calls PowerSaver “one of the best options for many homeowners to pay for a comprehensive home energy upgrade.”  If you’re ready to protect yourself from the devastating combination of high heating oil prices, inefficient old houses, and cold winters, you have one more financing tool in the tool kit.


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