Consulting & Research

CASE STUDIES 1 of 1

Deep Energy Savings with Immediate Positive Cash Flow

The Long Island Green Homes Program

Client: City of Babylon
Location: New York

Challenge/Business Need

Many homeowners want to retrofit their houses to be more energy efficient, but upfront cost is an obstacle. Over time, homeowners recoup those costs through savings on energy bills. But for those who lack the cash to make the changes, those savings may never be realized. In communities where many people in older homes can’t afford to make their homes energy efficient, overall energy usage remains high. Most of that energy is from fossil fuels, a finite resource that contributes to global warming through harmful emissions.

On Long Island, New York, leaders in the town of Babylon wanted to give residents an opportunity to retrofit their homes without incurring steep out-of-pocket costs. The town loans money directly to homeowners (up to $12,000), who make low monthly payments correlated to the savings on monthly utility bills. Appropriate technology was needed to calculate potential energy savings.

CSG’s ROLE

City officials chose a software program developed and licensed by CSG to assess homes for the program and determine energy savings. The projected savings are critical, because that figure determines how much money the homeowner is eligible for and what the monthly payments will be upon completion of the work.

Strategy & goals

The program’s goals are to:

• Reduce carbon emissions by 65,000 to 130,000 ton
  
• Reduce energy costs for homeowners
  
• Create 6,600 green-collar jobs

To achieve these goals, city officials needed to tap into their solid waste fund. To do this, the definition of solid waste was expanded to include energy waste, allowing $2 million from the fund to be allocated to the green homes program.

With Babylon paving the way, The New York State Assembly has passed bill #8862 enabling municipalities to develop their own Green Homes program. Municipalities with garbage districts are now allowed to finance residential efficiency retrofits and those without such districts may create one to support such a program. CSG’s policy team contributed to making this legislation a reality.

Administrative costs are covered through a 3 percent interest rate on the loans. If residents are delinquent, the balance is added to their property tax bill. This funding method is attractive to private investors because of the security from potentially attaching a lien on the property.

Impact

Through the program, homeowners are able to make improvements they could not otherwise afford, as well as benefit the community through job creation and improving the environment.

• More than 250 homes have been retrofitted through this program, and as many as 1,000 homeowners are expected to be served in 2010.
  
• The average participant has reduced home energy costs by $984 a year.
  
• The average cost of retrofitting is $7,000.
  
• Homeowners have reduced their carbon emissions by 20 to 40 percent, or five to 10 pounds per day.
  

CSG Contacts

Dave Beaulieu, Program Director