State lawmakers weigh clean energy loan fund

ANNAPOLIS – A proposal for a city fund for green housing improvements encountered another hurdle yesterday, as students from UMD for Clean Energy struggled to convince skeptical state lawmakers to allow cities to issue loans for environmentally friendly home upgrades.

Students first marketed the idea, which would give residents low-interest, long-term city loans, to the College Park City Council last year. But the program stalled because state laws prohibit cities from being lenders.

Strong opposition and heavy questioning from legislators dominated the Senate Finance Committee hearing on a bill that represents the next step for a program proponents say will save homeowners money while protecting the environment.

Members of UMD for Clean Energy testified in both houses in favor of the bill, which authorizes cities to issue loans from a fund in partnership with Maryland Clean Energy Center that would be repaid through taxes tied to the property.

The mechanics of the program came under fire, however, as committee members voiced concerns about consumers' eligibility for loans, the possibility of defaulting and the repayment structure.

Because the loan is not attached to the property owner, if a resident decides to move before it is fully repaid, the responsibility is transferred to the new tenant. Several senators said they worried this would make the retrofitted homes less attractive, and could exacerbate the foreclosure crisis of the past two years.

But Laura Calabrese, organizational director of UMD for Clean Energy, said these concerns were misguided. She said most participants want to take advantage of the long-term energy savings the renovations would provide, and wouldn't be quick to put their houses on the market.

"I don't know if they really understand the nature of this program," said Calabrese, a senior sociology major.

Sen. E.J. Pipkin (R-Eastern Shore) wondered if consumers' appetites for green homes would exceed the green in their wallets, and if they would default on existing loans, such as mortgages, as a result.

The bill sets in place eligibility criteria, adjusts payment plans accordingly and requires an auditor to assess the possible benefits of installing new equipment. Calabrese said the program "isn't geared toward the people who would default on their loans."

"The whole point of this is to have the consumer save money," she said. "It's not aimed at putting anyone at an economic disadvantage."

If the state passes this bill, city legislatures will then take over to formulate their own individual loan programs.

"Clean energy innovation is something that's going to have to be revolutionary to a certain extent," Calabrese said.

gulin@umdbk.com