Costing a Green Future

Federal funding is available for climate change research and education projects. The American Recovery and Reinvestment Act provides monetary contribution to states as well as to cities, counties, and other local programs. The goal of ARRA is to support existing initiatives, so many of these projects form partnerships, with more funding provided by existing donor companies and local taxpayers.

The City of Minneapolis has an annual program which awards climate change grants, which was founded in 2007. The Minneapolis program is open to all types of applicants, from individuals to universities and corporations, and the 2010 program awards up to $10,000 per winner. One unique requirement for this grant is that the applicant should help people register for the Minnesota Energy Challenge.

The California Energy Commission awards climate change grants as part of its PIER program. PIER, or Public Interest Energy Research, supports both efficiency in energy use and projects which produce additional clean energy. PIER grants are large, as the California Energy Commission may provide up to $1 million in funding, and the project may also receive additional federal support.

The Department of Agriculture also awards climate change grants. These are some of the largest climate change grants available anywhere, as the USDA can award up to $25 million for a single project. This is even larger than the Department of Energy grants which average around $5 million. The Department of Agriculture is looking for methods which reduce the amounts of energy, water, and nitrogen based fertilizer that farmers require. These grants are also available to anyone, including individuals, and the Department of Agriculture will award smaller grants for projects with less requirements.

California also has a program available that supports small individual projects. The California Energy Commission created the Energy Innovations Small Grant Program, which provides as much as $95,000 for hardware demonstrations and up to $50,000 for projects which model climate change. This program allows small businesses to apply. These projects cover the same topics as the PIER request for proposals, just on a smaller scale.

Vermont also awards climate change grants. According to the Vermont Governor Jim Douglas, 17 projects throughout Vermont received $188,000 in total funding in 2009. Projects included replacing inefficient boilers at schoolhouses, adding efficient insulation to buildings, and replacing inefficient light bulbs such as incandescent bulbs. The Vermont Agency of Natural Resources lists the grant conditions, which focus on small scale efficiency and conservation improvements that can easily be implemented in several Vermont communities.

The State of Delaware provides funding to citizens to set up generators of renewable energy, partially funded by the ARRA, the American Recovery and Reinvestment Act, which is the federal support for state programs. Delaware organizations offer several types of grants, some for much larger amounts than the appliance rebates and retrofits which are available elsewhere.

Delaware’s Renewable Resource Program provides funding for installing a source of renewable energy in a business, a home, or as a town or city project. The business limits are larger, with the state offering a grant as high as $30,000 for building solar panels or wind turbines. Residential limits are lower, although some of the installations may receive as much as $15,000. Compare this to the $300 appliance rebates and the sales tax exemptions of other states, this is huge.

The Renewable Resource Program is 1/3 matching funds, which means that the homeowner or the business has to pay the other 2/3 of the cost for installing geothermal heat pumps or other machinery. Changing the cost of a homeowner’s solar array from $45,000 to $30,000 shortens the payback period quite a bit and a grant of this size can change a project from a net loss to a net gain. For example, if a company calculates it will lose $20,000 by installing wind turbines, the grant can change that to a $10,000 gain. The catch is that Delaware grants for green energy installations will take about three years before the state pays out the grant money, which requires a sizable investment up front. An accountant will also remember that you have to discount any payment according to the rate of return you could receive in another investment. For example, you invest $30,000 at 10% and make $3,000 interest in one year, $3,300 in two years, and $3,330 in three years, a total of $9,630. Subtracting $9,630 from $30,000 still gives a gain of $20,370, and the gain is higher if you would be receiving less than 10% on your investments.

Delaware also offers rebates, including rebates for efficient light bulbs such as compact fluorescents and LCDs. The State of Delaware offers an extension of the lighting rebate program, to the end of August. State rebate programs may not officially end on their original posting date. If the state still has funds left to provide rebates or grants, they can decide to extend the program, since they are in charge of distribution of the money. Of course, states may also shut down a program early if it becomes too popular and the state gives out all of the rebate money quickly, so quick submission of grant and rebate applications is important.

Connecticut residents have the opportunity to receive lots of money for setting up renewable energy systems and making their homes and businesses more energy efficient. The state of Connecticut provides funds through several of its own programs, and power companies also provide support.

Connecticut Light and Power provides information about grants as well as energy conservation. Grant programs pay to conduct an energy audit of a residence, where the state sends a worker out to check for improvements which can make a big difference in an energy bill. State workers provide services including sealing gaps in walls and roofs to remove leaks that let in cold air, install systems such as water conserving shower heads and faucets, and replacing inefficient incandescent bulbs with compact fluorescent bulbs which the state provides. There is an income restriction on this program, it requires an income of less than $30,485 for a single person and the restriction increases by about $10,000 for each additional resident in a household up to six people.

Connecticut offers a unique implementation of the federal energy efficient appliance rebate program. An online store provides Connecticut residents with an opportunity to purchase new appliances, such as refrigerators, washing machines, and compact fluorescent lights, with the rebate included in the purchase price. This makes it much easier to receive the rebate for purchasing an item and makes it obvious which appliances are eligible for subsidies. The Energy Federation sells energy efficient light bulbs through this program at a discount, available to all customers of Connecticut Light and Power.

Tax benefits are available for Connecticut residents who purchase and install energy generating equipment such as solar panels and geothermal heat pumps. Buyers of these items do not pay state sales tax on the items, and do not pay the state use tax. The tax free status includes the expenses of hiring a contractor to install the equipment. This is a full tax exemption, and does not have a maximum income requirement or a limit to the amount of tax benefits the purchaser can claim.

Oregon offers tax credits for many businesses that invest in renewable energy as well as reductions in their overall energy usage. Although this program is subject to cutbacks because of overall economic conditions, it still provides many benefits for businesses that reduce their energy usage and carbon emissions.

The program provides benefits in several areas, according to the State of Oregon. A major area is conservation, and the program allows tax credits for business owners who set up projects that conserve resources such as water and electricity through improvements to the air conditioning and irrigation systems at their companies. Qualification for this project does involve the business owner submitting an application to the State of Oregon and explaining why their project is eligible for tax benefits. The project has to be at least ten percent more energy efficient than the typical systems which other companies install.

The Oregon tax credit is a percentage of installment costs, not the full installment cost. At a thirty five percent rate, it does provide a significant reduction in construction costs, and does create an economic stimulus effect. Oregon requires a relatively short payback period, less than fifteen years. This is short because large improvements may be designed to last decades, and if a project lasts for fifty years, demand may be high enough that the cost will not allow payback in fifty years. Payback periods are affected by overall energy costs, so even if a new refrigerator or air conditioning system does not appear to have a payback period of less than fifteen years now, it might when gas prices sharply jump during a crisis in the future. You’ll still have to make the calculation with reasonable numbers now when sending in the tax credit application, to get the approval of the Oregon auditors.

This project is now scaled back, not just because of the economy, but because of widespread fraud. According to Oregon Live, the previous regulations allowed businesses to collect money from the state of Oregon without providing any energy saving benefits. The new compromise bill allows wind power generators to still receive tax credits for building new turbines and wind farms, and reduces abuses such as dividing up the wind farms to receive greater amounts of Oregon taxpayer money. A clawback provision allows Oregon to reclaim subsidies on projects that do not continually meet energy efficiency standards. The government agency, DSIRE, offers a very long list of the types of projects eligible for Oregon energy efficiency grants, including local grants such as cities and counties that subsidize solar, wind power, and other renewable energy.

The federal government funds battery research technology through Arpa-E grants. Project selections include the development of magnesium ion batteries by the company Pellion Technologies, according to Arpa-E. This type of battery is a new technology that potentially creates much more cost effective batteries for hybrid cars and other vehicles. Cost limitations of battery systems are one of the main factors holding back renewable energy generation.

The Arpa-E grants provide several million dollars in research funding for each project, including matching funds that the grantee company invests in developing new technologies. According to Representative Anna Eshoo, the federal government is awarding $3,204,080 to Pellion Technologies to create the magnesium ion batteries. This investment may provide much higher payoffs, depending on the cost savings from switching to this type of battery. In addition, since a California company controls this patent, the company may receive additional income from licensing magnesium ion technology to companies in other countries such as Germany and France, providing additional tax revenues to the California and federal government.

This is a joint project between the Massachusetts Institute of Technology and Bar Ilan University. The chemist Dr. Doron Aurbach publishes articles in the field of magnesium ion technology, including common flaws in the technology and methods to improve it. Magnesium provides the cathode for the battery, and as a relatively common metal it is cheaper and easier to obtain than the rare earth metals that are requirements of other technologies. In addition, magnesium is found in many locations, so supply restrictions from hostile nations are not a major concern. Magnesium is also an important dietary mineral, according to the National Institutes of Health.

A team of workers in the North Coast of California has been awarded grant funding from the federal government to help make houses and other buildings in Humboldt and other counties energy efficient. Humboldt State University students and alumni, as well as municipal staff and workers at consulting firms, successfully gained $4.4 million in grants that will be distributed by North Coast local governments.

Program funds are awarded through the California Energy Commission. As the commission received a total of $30 million for this program alone according to Humboldt State University, more grant money is available to other municipal governments that submit grant applications. Sonoma County received funds from this program as well. The Sonoma County Energy Independence serves as a model for the other counties covered in the application. According to Sonoma County, other North Coast counties distributing grant funds from this program include Mendocino, Lake, Del Norte, Trinity, and Siskiyou.

The California Energy Commission received grant money from several federal programs under the Recovery Act, for a total of $314.5 million in federal funding. The State Energy Program received the largest amount of federal funding, $221 million. This program is the main source of funding for the construction covered by the Home Star Program. The Home Star program provides rebates of up to several thousand dollars to reduce energy usage in residential housing. The State Energy Program adds funding for additional projects. For example, it includes grants to state and county governments to add insulation and repair the windows of state office buildings. This program also provides funding for green jobs programs. Often found at community colleges, such as College of the Redwoods, classes train workers about health and safety so that they can work in new careers. The state energy program also provides subsidized loans to businesses, so they can retrofit commercial buildings while borrowing at much lower interest rates than they would normally receive.