Financing retrofits

Interesting post from the Gristmill on various strategies for financing high-efficiency retrofits of buildings with a long-term payback that might otherwise discourage short-term tenants. Manitoba Hydro is highlighted for its success in making 8,100 loans for energy conservation programs in 2007.

The lesson of Sacramento and Manitoba lies in that how payments are collected -- on the bill, on the property tax, or on a separate bill (which is what these programs do) -- matters less than how the loans are marketed. Because of humans' innate aversion to making complicated choices, among the most important ingredients of success in Manitoba and Sacramento is the deep and thoroughgoing involvement of those places' contractors -- the people that building owners already trust to help them improve their properties. In both places, contractors are the most important sales force and intermediary for the utility lending programs. Plus, these programs are efficient, well staffed and well organized. In Sacramento, once a contractor and building owner have submitted a loan application, the utility approves or declines within 24 hours. Manitoba is almost as fast, and it has a colossal network of engaged tradespeople: 1,100 contractors and 200 retailers are enrolled in its program. Manitoba has essentially deputized its building tradespeople as loan officers and conservation evangelists ... It's a whole-systems approach that provides financing as one part of the package.