U.S. Department of Energy Energy Efficiency and Renewable Energy

Legislative Rulings on Residential Clean Energy Finance Programs

In some instances legislative and executive efforts are required to implement energy efficiency and renewable energy finance programs, while in other cases legislative efforts set broad objectives rather than specific targets and mandates.

In some examples (see State Authorizing Legislation Examplespdf), a state can promote the use of loan loss reserves through strongly worded state legislation. For instance in Washington State, legislation provided that:

“The legislature finds that the creation and use of risk reduction mechanisms will promote greater involvement of local financial institutions and other financing mechanisms in funding energy efficiency improvements and will achieve greater leverage of state and federal dollars. . . . Local municipalities receiving federal stimulus moneys through the federal energy efficiency and conservation block grant program or state energy program are authorized to use those funds, subject to federal requirements, to establish loan loss reserves or toward risk reduction mechanisms, such as loan loss reserves, to leverage financing for energy efficiency projects.” [RCW 43.330.330-350 [2009 c 379 § 206-8].

At the formal local decision-making level (see Local Authorizing Legislation Examplespdf), legislation is needed to authorize the use of city/county time and funding to guide energy efficiency program direction at each level of completion,

“The City Council directs City Staff to continue to explore and develop mechanisms by which the City can assist – without General Fund usage and preferably through leveraged private sector involvement – in the creation of an energy efficiency financing program to complement the Energy Efficiency Community Challenge.” [Bellingham, Wash., Res. No. 2009-05, § 3.]