In Part 3 of my green finance series (Part 1 is Top 10 Rules of Green Finance and Part 2 is Alternative Green Financing Mechanisms), I will address government incentives and other programs. I will also highlight some factors that may make green incentives go from rare bird to endangered species.
As always, I am not a finance professional, and the goal of these posts is simply to give a high-level overview of government incentives. As with all financial decisions, please consult your financial professional and attorney for advice specific to your project.
The Good News About Government Incentives
- Programs are available at almost all levels of government -- The federal government offers grants, tax breaks, loan guarantees and technical assistance for green building and renewable energy components of commercial, residential and industrial projects. The Office of Energy Efficiency and Renewable Energy has a pretty user friendly site. States also run incentive programs, and many states have renewable energy credit trading programs (also known as RECs or green tags or SRECs, etc.), which enable producers of renewable energy to get an extra stream of income from their property. For special groups, like Native American tribes and veterans, additional resources are available.
- Some programs come from unusual sources -- Not all green building and renewable energy incentives come from government. Utilities sponsor a lot of programs for both commercial and residential projects (for example, see the programs available from PECO here). Some nonprofits and even faith-based organizations are providing green incentives. A loyal Twitter follower highlighted this program by the Jewish Free Loan Association (available to those of any faith) that provides interest free loans of up to $5,000 for energy efficient upgrades for homes and small businesses in the Los Angeles area.
- Don't neglect technical assistance programs -- One of the most underutilized incentive is technical assistance. Of course, homeowners and businesses can access technical assistance programs. Municipalities, small businesses and Native American tribes also can get thousands of dollars in technical assistance for free or reduced cost. For example, in New York Con Edison provides small businesses with a free energy audit. This can ensure you maximize the benefit of your green project both environmentally and financially.
Next Page: The bad news ...