In its ongoing effort to provide capital that helps reduce carbon emissions and energy consumption, Bank of America today announced a new $55 million program to encourage energy efficiency improvements to older buildings. The new competitive program will provide low-cost loans and grantsto Community Development Financial Institutions (CDFIs) specializing in financing energy efficiency improvements.
Older properties consume far more energy and often have higher costs for electricity, heating and air conditioning than newer buildings. CDFIs in local markets are developing innovative solutions to address barriers that have kept many property owners from financing important energy efficiency upgrades that can immediately save energy and, over time, save money. Bank of America will select up to 12 CDFIs with the most effective solutions for funding to scale on a national level as part of its new program.
"Residential and commercial buildings account for approximately 40 percent of all primary energy consumption in the United States. That's why, if we really want to address climate change, we have to improve the energy efficiency of existing buildings, particularly older ones that tend to be the least efficient," said Anne Finucane, Global Strategy and Marketing officer, Bank of America. "Through this program, Bank of America will fund the community lenders that have developed creative and effective approaches to financing energy efficient retrofits, with the aim of bringing these innovative financing structures to scale for greatest impact in reducing U.S. carbon emissions."
"Making our existing building stock more energy- and resource-efficient is the best way to create jobs, save energy and save money," said Rick Fedrizzi, president, CEO and founding chair of the U.S. Green Building Council (USGBC). "The fact that Bank of America is not only launching this program, but gathering data and reporting on the conclusions will help enhance the effectiveness of the existing building sector."
"I applaud Bank of America for looking to CDFIs as the delivery vehicle for innovative energy retrofit solutions," said Mark Pinsky, president and CEO of Opportunity Finance Network (OFN). "CDFIs have launched numerous residential and commercial green financing initiatives to reduce carbon dioxide emissions, improve energy efficiency, and create green jobs in distressed markets across the country.
Energy efficiency is good for the planet and good for the homeowner, for whom cost savings and affordability can mean opportunity."
The $55 million includes $50 million in low-cost, long-term loans to CDFIs with innovative energy efficient retrofit programs that finance the upfront investment costs for building owners to make energy efficient improvements. The energy cost savings realized over time will create cash flow to repay the loan. An additional $5 million in grants will also be awarded to help with staffing, training,reserves, and marketing needs associated with the implementation of the programs.
Once CDFIs have made loans to property owners, Bank of America will work with them to collect pre- and post-retrofit data in order to measure program outcomes, including impacts on energy and water usage and associated financial savings. EnergyScoreCards, a subsidiary of Bright Power, Inc., will be the third party consultant for data collection and analysis.