Special District Bonds for Renewable Energy

The journal Miller McClune has turned out to be an amazing resource for new ideas for Smart Taxes. Here is an article describing how a kind of property tax can be used to fund renewable energy systems at neighbourhood level. US Vice President Joe Biden is the advocate and promoter for this ‘special district bond’ .  Paying for retrofitting your house to a higher energy standard using your electricity bill has been proposed in Ireland. But using the promised site value tax as a mechanism to do so is a new twist to think about.  There are advantages to using a property based tax over an energy utility in that the payment can attach to the property not the owner.  Here is an excerpt..

On Monday, Biden released a report — “Recovery Through Retrofit” — which included a recommendation to support municipal energy financing a la the Berkeley model:

“Property tax or municipal energy financing allows the costs of retrofits to be added to a homeowner’s property tax bill, with monthly payments generally lower than utility bill savings. This arrangement attaches the costs of the energy retrofit to the property, not the individual, eliminating uncertainty about recovering the cost of the improvements if the property is sold.” The report calls for federal and local regulators to hammer out the details for underwriting and protecting lenders and borrowers, while the Department of Energy will dig up an estimated $80 million in seed capital through State Energy Programs and possibly $454 million more through future Energy Efficiency Conservation Block Grants.

According to an eight-page white paper on the “Property Assessed Clean Energy” financing program, “If only 15 percent of residential property owners nationwide took advantage of clean energy community financing, the resulting emissions reductions would contribute 4 percent of the savings needed for the U.S. to reach 1990 emissions levels by 2020.” link to full article