How to Create 1 Mil Green Energy Jobs in 2009

I believe most would agree that America is facing perhaps the most dire economic crisis of our lifetime. In December 2008 the nation shed 525,000 jobs and many economists believe more job losses are inevitable. Additionally, America needs to move towards energy independence for many obvious reasons including global warming, economics, and national security to name a few.

President Elect Obama has stated that his primary focus would be on creating energy jobs in order to stimulate the economy, as well as creating an energy policy that creates energy independence. In my opinion, energy independence and job creation could go hand in hand, pulling our country out of oil dependence, while reducing environmental pollution, and an economic crisis.

There is much discussion regarding the best methods to stimulate the economy. Most agree that any stimulus package must create jobs and have a lasting effect on the country, which is why the idea of spending money on infrastructure is gaining traction. These are my thoughts on how to achieve some of these goals utilizing the anticipated stimulus package.

Green Energy Loans For Renewable Energy Installations

My proposal, which I believe would create jobs beneficial to kick starting the economy, is to create a green energy loan guarantee program for property owners and businesses to finance solar and energy conservation installations.

The challenge facing many homeowners and businesses today is the high cost of these types of improvements and the lack of credit available to finance them. A typical solar installation for a family of four to offset 75% of their current electricity after various rebates (depending on the state they live in) is still in excess of $20,000.

This program would work similar to the current student loan program. Meaning, credit and income would not be the determining factors in obtaining a green energy loan.

Banks would lend the money to the property owner regardless of credit, income, or equity and the Federal Government would guarantee the principal and interest of the loan. The green energy loans could either be secured against the property in exchange for a lower interest rate or unsecured for a slightly higher rate (unsecured student loans are currently as low as 4.625%). Based on the most recent data, student loan defaults are running at 5.2%. I would respectfully argue that default rates for green energy loans would be similar or less then the default rate on student loans since homeowners are older, more responsible, and less likely to default than newly graduated students. Another consideration is that even if the borrower defaults, the system continues to generate electricity!

Monthly payments would be fixed and offset by reduced energy bills, and similar to student loans, they could not be discharged in bankruptcy except in extreme situations. This would reduce defaults and keep interest rates low.

Homes would also need a professional energy audit to ensure the home is adequately using energy in the most resourceful ways possible. The energy audit should be conducted by an independent energy auditing firm, not the contractor providing the services. An energy auditor can help to locate air leaks and drafts around windows, doors and fireplaces, check insulation levels for heat loss, inspect heating and cooling equipment to recommend efficient upgrades, and offer other energy-saving ideas, such as replacing light bulbs with a lower wattage.

Companies installing the solar panels, as well as the energy auditors, would need to be held to rigorous certification standards. These certifications and licenses would deter rampant fraud in the system. With higher licensing and certification standards, lenders and homeowners could be assured that the products and services provide long term benefits to the homeowner.

Additional considerations of the program:

• At least 50% of Solar panels and associated equipment would be required to be manufactured in the US (which creates manufacturing jobs)
• To meet demand for solar panel and components the government might offer tax credits, accelerated depreciation, or low cost financing for expansion of existing manufacturing facilities or building of new facilities.
• Rebates and tax credits would be eliminated or reduced in lieu of these energy loans.
• Installers would need to be approved by their state agency and agree to a higher set of financial standards (such as posting a bond)
• The government could offer tuition assistance to train tradesman in these new technologies.
• The Federal government would fund these agencies through loan fees which would be waived for the first year.
• There would be limits on the maximum loan amount (i.e. 4-5 kw should supply 75% of the electricity needs for a family of 4 in a 2000 sq ft home which would cost $35 - $40k).
• Encourage extended warranties from the manufacturer and installers.
• Property owners would only have to provide evidence that they are current on their existing mortgages to qualify.
• Larger loan amounts could be amortized over 20 years.
• Fixed income residents green energy loan payments could be fully or partially subsidized. However they would need to be secured against the property.
• Smaller loans could be used for solar hot water heating, installing energy efficient windows, insulation, etc.

The obvious advantages of this program are numerous:

• Creates manufacturing and service jobs.
• Decreases our energy dependence on foreign oil.
• Minimal impact on the homeowner’s monthly budget since they will benefit from a fixed monthly payment that could offset or eliminate their future energy costs.
• Decreases global warming and reduces our carbon footprint.
• In a tight credit market, allows property owners the ability to utilize alternative energy.

I’ve performed a cursory calculation of the costs associated with the program, so my estimates are my best guess. It would cost the federal government approximately $10 - $12 Billion dollars to guarantee 5 Million property owners with an average loan amount of $30,000. Five million property owners utilizing solar energy would generate approximately 10,000 Megawatts (1 Megawatt generates enough power for 1 large Wall mart store).

I realize that it will take time for supply to meet demand. However, increased demand will reduce overall costs and unlike a personal stimulus check, the benefits of alternative energy will continue to pay for themselves exponentially over the coming years. Imagine having a fixed payment for energy costs on your home or business for the next 20 years while reducing your carbon footprint!

1 Million Green Energy Jobs Created

Not only would this proposal help America free itself from oil dependency, but it could also help create a million or more new green jobs that are needed in 2009, help cut back on global warming, and stimulate the economy.

One more note, I don’t work for or own stock in any solar or wind companies. I base the above on a combination of experiences. This includes obtaining student loans, as well as 15 years experience in home improvement financing, which gives me some insight into qualifying contractors as well as the abuses that may occur.

If this makes sense to you, please forward this to your elected official asking for their support. Remember, change happens on an individual level and we are all in this together.

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