It is becoming more apparent that many households and businesses get a lot of savings yearly by making simple modifications to turn their premises green. Due to this, the popularity of green projects is increasing.
To fulfil this demand, banks have created various loan products while governments have increased their incentives and this has made green financing even more possible for people.
State and federal governments are also keen to create more jobs and to build the economy, a factor that compels it to make green loans affordable to start-up businesses. In fact, green financing is now increasingly becoming more mainstream, has better standards and borrowers can get significant amounts of money from their lenders.
Below are various sources of green energy funding available to individuals and companies:
- Energy saving contracts
This is a form of financing mainly targeted at institutions such as schools and government offices. It involves making modifications to improve energy efficiency, without having to inject any capital upfront.
The beneficiary of the funding pays by routing the savings that result from the energy efficient modifications to the energy company that undertakes the project.
- Energy services arrangements
When you make solar installation in your home, you will undoubtedly stop paying bills to the utility company. This fact is what this form of financing premises on.
You will not pay for installation of your solar arrays, but will instead pay the amount equivalent to your past utility bills to the solar company.
- State-issued loans
These loans target businesses and individually owned projects whose aim is to achieve energy efficiency. The main feature of the loans is that they tend to have very low interest.
The state also issues grants to support research and development of new energy efficient technologies.
- Renewable-energy utilities
These are mainly non-profit bodies managing funding programs, offering incentives and technical assistance to building owners.
Their main job is to support builders to mount renewable energy installations in their buildings.
- Carbon funding
This is a fund geared towards the reduction of carbon emissions. The World Bank launched such a fund in 2014 and many projects have benefitted globally.
There are also individual companies that use this type of financing to reach end consumers.
- Mortgage-financed energy project
When you get a home mortgage, the bank can bundle the cost of making energy efficient upgrades onto your mortgage. This allows you to make your modifications without having to reapply for another loan.
- On bill funding
Under this financing arrangement, your utility company or lender will cover the total cost of your upgrades. It will then charge you a small percentage of the total cost of the project on your monthly utility bills.
- PACENow energy programs
PACENow is a non-profit company that pays for the total cost of home and commercial property energy installations such as solar arrays, home insulation, cooling and heating installations.
PACE has guidelines for eligibility. Once you qualify, you will access the full amount of money required for your project and you can repay the loan amount in 20 years.
- Unsecured loans
Some banks do not require security for loans meant for creating energy efficiency. This means that you only need a good credit record.
Visit lending institutions that deal in the above financial sources, and get funds for your green project.
About the author
Heather Wolanski is a credit analyst with 8 years’ experience. She has helped many home owners access loans for green modifications and even more people get out of debt. Read debt consolidation reviews about some of the companies she recommends for getting out of debt.