News Column

Millions in Green Energy Grants, Loans Remain To Be Used

Nov. 5, 2012

Karen Rivedal

More than two years into a three-year government program to create jobs and boost energy efficiency in homes and businesses in three southeastern Wisconsin cities, many millions of dollars in grants and low-interest loans available for property owners remain uncommitted.

Funded by federal stimulus funds from the American Recovery and Reinvestment Act of 2009, the $20 million program is focused on Madison, Milwaukee and Racine.

And, while more than 500 homeowners and about 100 businesses have seen green updates under the program -- known collectively as Wisconsin Energy Efficiency, or WE2, and as Green Madison locally -- much opportunity remains in the program's last seven months. After that, any unused money must be returned to the federal government.

In total, only about $3.16 million in grants for homeowner and business projects have been awarded, along with roughly $1 million in low-interest loans for residential projects, as of late October, according to Brian Driscoll of the Wisconsin Energy Conservation Corp., a nonprofit organization that administers the cities' programs.

No commercial loans in any of the three cities have been disbursed yet -- though Driscoll said several could be completed "in the very near future" -- and no projects of any kind have occurred in Racine, where the program is just getting started and will focus only on commercial properties.

The city of Racine received $700,000 of the $20 million total grant from the U.S. Department of Energy's Better Buildings Neighborhood Program, with $12.1 million for Milwaukee and $7.2 million for Madison.

Program response

Driscoll said community response has been good, noting it takes time for any new program to become known and trusted.

He said 22 businesses signed up in Madison from June to August, when commercial incentives -- which change every three months -- were worth up to 40 percent of project cost, depending on energy savings achieved.

They now are worth only up to 30 percent, or a maximum of $40,000 for projects over $75,000, but Driscoll predicted a similar sense of urgency would develop this winter, through a just-added $500 bonus for natural gas boiler and furnace replacements through December.

Residential grants also are tiered, up to $2,000 for energy savings of 35 percent or more, Madison energy grant administrator Matt Wachter said.

Homeowners also are eligible for low-interest loans, and 86 totaling about $430,000 have been disbursed to individuals in Madison and Milwaukee.

Hopes for the program

Green Madison wants to retrofit 4,500 homes and 109 businesses, according to the goal statement.

What's been accomplished so far is a fraction of that -- with the program in some way reaching about 28 percent of the desired businesses, and about 16 percent of the homes.

But the program's over-arching goal is that it helps instill a new mindset, so that energy savings in construction or remodelings "becomes standard and common practice," Wachter said.

Madison Mayor Paul Soglin said the program also was important because the improvements save energy, lower operating costs for property owners and stimulate the local economy.

"It certainly put people to work," he said.

Some jobs added

Madison and Milwaukee each has a list with dozens of vetted contractors willing to participate, and projects have provided some of them with work, though it's not clear whether or how many jobs were saved or created.

One participating contractor, Charles McGinnis of Madison-based Johnson Controls, estimated his company has created 20 jobs hiring subcontractors for several green projects in large Milwaukee office buildings, including the turn-of-the-century, 15-story Wells building at 324 E. Wisconsin Ave., where the heating and cooling system was modernized in a $1.6 million project.

The improvements will cut the building's electric bills by 25 percent and save a projected 17.8 million gallons of water a year. The building owner received a $300,000 grant and $200,000 in pending loan guarantees, according to Erick Shambarger, Milwaukee's environmental sustainability manager. (Incentive caps are higher in Milwaukee.)

"Without those incentives, the owner may not have made that upfront investment," McGinnis said. "The systems deteriorate and many times a building owner doesn't have the resources, technical or financial, to figure out what to do."

Reasons for lag

One reason the program started slow is that federal officials first limited the incentives to low-interest loans, Shambarger said.

But borrowing was a tough sell in the weak post-recession economy, he said. Participation picked up after the cities got permission to offer grants along with loans starting in late 2010, Driscoll said.

In Madison, Soglin said the program was stalled when he came into office, prompting significant changes in how it was organized and publicized.

Also, the program was phased in by design, Wachter said, with the residential piece starting in 2010, and commercial projects in early 2012.

Home energy reports

Madison resident Rajan Shukla and his wife, Tora Frank, had an energy audit of their Near West Side home done last week. They wanted to make sure their 100-year-old house, which they moved into in July, wouldn't be too drafty for their three young children.

"We care about energy efficiency for a lot of reasons, cost being one," he said. "But we mainly just wanted to make sure our (home) that we're going to live in for many years was going to be comfortable. We want our kids to be able to run and crawl around and be warm and cozy."

And the energy audit will help them prioritize the needed improvements.

"It helps you triage your options going forward in a way that's very difficult to do without the help of science," Shukla said.

Mark Furst, owner of Grading Spaces of Fort Atkinson, tested the family's home, one of about 50 he's done for the Green Madison program.

Furst said the home market would be improved if sellers had to include a home energy report, the way cars for sale have to post gas mileage stickers.

"Then buyers would know what they're getting in terms of the hidden costs," Furst said. "People can waste a lot of money in heating and cooling inefficiencies, and you can't tell by just looking at a house. You need to test it."

Benefits for businesses

Madison businesses that have participated in the program include Centro Hispano, Badger Gymnastics Academy and Urban Land Interests.

At ULI, the company improved lighting, heating, ventilation and air-conditioning in four office buildings it owns, said Matt Darga, director of commercial property management.

For example, the program helped ULI renovate lighting in a 25,000-square-foot building at 7 N. Pinckney St. that was built in 1899 and last modernized in 1978, he said.

"It wasn't about going over the top to make some sort of environmental statement," Darga said. "We just wanted to save energy, which was good for the environment and the (tenants) and for us."

"That building needed work, and Green Madison came along at the right time," he added. "It's quite likely we wouldn't have done it without the program."

At Centro Hispano, the non-profit received nearly $8,000 from Green Madison to install more energy-efficient lighting inside and outside its headquarters at 810 W. Badger Road, plus add motion sensors and timers for the lights and better thermostats.

The improvements will save the organization about $3,000, or 17 percent, on its annual gas and electric bills, executive director Kent Craig said.

"I've done a lot of remodeling projects, and this was by far the easiest, just because everybody really wanted to make it happen," Craig said.



Source: (c)2012 The Wisconsin State Journal (Madison, Wis.). Distributed by MCT Information Services.


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