'EZ' focuses on energy efficiency

City aims to help businesses, residents pay for improvements

August 14, 2008|By Jasmine Jernberg | Jasmine Jernberg,Sun Reporter

The city of Annapolis has announced a pilot program aimed at providing residents and small-business owners with funding for affordable, energy-efficient improvements to their homes and shops.

The Annapolis Energy Zone, or EZ, program - formed with the help of the Maryland Energy Administration, the Annapolis and Anne Arundel County Chamber of Commerce, and Commerce First Bank - will provide private funds to property owners interested in reducing the city's impact on the environment.

"This will be a program that will allow the reduction of the carbon footprint and is one part of the city's overall program to increase energy efficiency," said City Administrator Bob Agee.

State and federal programs have been offering incentives for residents and businesses to invest in energy conservation measures, including projects as small as installing better-insulated windows and as substantial as installing photovoltaic solar panels on rooftops or solar thermal panels for hot-water heaters. Yet despite the incentives, city officials said, there has not been a large-scale movement to make the change.

Don Lamb-Minor, special assistant to Mayor Ellen O. Moyer, said many people are discouraged by the unfamiliar process, unsure of how to start, install systems, pay for initial costs and take advantage of the incentives and tax credits. There is also a lack of interest in installing solar panels, he said, because there is a 10-year payback and the average homeowner moves within seven years.

Until now, residents could only fund projects on their own. The Annapolis EZ program will allow property owners to apply for money from the chamber's foundation, borrowed from local banks, and then repay the amount to the city in their annual tax bill.

The annual payment is often less than the savings provided by the energy-efficient equipment, and if the property owner should move before 10 years, the payments will transfer to the new owner.

"It is a very good scenario for all the parties involved," said Lamb-Minor.

Because repayment is made to Annapolis directly, the city can guarantee the loans, taking the risk away from the bank lenders. Similar programs dependent on bonds or directly from city coffers have had interest rates of up to 8 percent; the security of the Annapolis EZ program allows banks to drop rates to as low as 5.5 percent.

"When they can make it happen, help the community and still be responsible to their own stockholders, it's a good program for the banks," Lamb-Minor said.

According to city officials, this program is unlike any other in the nation. Others have been proposed using bonds or city dollars, but they said this is the first energy-efficiency improvement program to use private funding and preserve federal incentives and investment tax credits that could otherwise be lost by using other means of funding.

"It's a win-win-win program, getting people thinking about it, removing the obstacles and helping fund it," said Rick Morgan, president and CEO of Commerce First Bank. "It's a win for the community, it's a win for the citizens, and it's a win for the bank."


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