Governor Pawlenty proposes a renewable energy planby Stephanie Hemphill, Minnesota Public Radio
Gov. Pawlenty wants to make low-interest loans available to small businesses and homeowners, to install renewable energy systems. The governor also established a collaborative group to oversee research and development on clean energy.
St. Paul, Minn. — Lots of people would like to install solar or geothermal systems to reduce their energy bills and their carbon footprints, but it's hard to come up with the money to pay for them.
Gov. Pawlenty says he'll ask the legislature to authorize money for revenue bonds to help finance thousands of those kinds of projects. The governor says he will seek up to $20 million, enough to cover as many as 4000 homes. The money would be distributed by local governments through long-term, low-interest loans to homeowners and small businesses.
"It'll probably start out modestly and then as more demand occurs, then the economies of scale and the price points will begin to drop as it does with most things that get mass produced or produced with more frequency," Pawlenty said. "We also hope there'll be a peer pressure element to it, that neighbors will be inspired by neighbors, communities will be inspired by other communities, so there's kind of a best-practices or leadership component that we hope comes from this."
Or, Pawlenty says local governments could use the money themselves. He says that's the way it works in Europe.
"Believe it or not, Germany's not exactly Florida in terms of its temperature, and they're making a go of it. They've got new generation solar, they're aggregating at a municipal level in some cases, not just individual homeowners, and these types of financing mechanisms have spurred municipalities to undertake it at a community level. So we're open to both."
Pawlenty's advisors have been working on this idea for awhile. Two people who contributed their ideas attended the news conference. Randy Hagen and his partner manufacture solar thermal collectors in the town of Starbuck. But Hagen says they sell more of their products outside Minnesota, because other states already have good incentive programs for buyers.
"We don't have to look very far across the border, Wisconsin and Illinois, two great states that have incentive programs on the state level to complement the federal incentive programs. We can see where our product goes and we need that product to stay here in Minnesota, so hopefully this will bring us on par with what other states are offering."
The governor says he'll leave it up to the legislature to decide exactly how much money to invest this way.
David Morris of the Institute for Local Self Reliance has been promoting this kind of financing approach for years. He says 2,000 or even 4,000 projects wouldn't make a big difference in reducing Minnesota's carbon footprint. But he says the Pawlenty plan could be just the beginning.
"In some ways this is a pilot program, but a substantial enough pilot program, that we can learn from our mistakes, we can revise it in a second iteration, and we can talk about a $50 million or $100 million bond issue."
In fact, Morris says the state could eventually issue taxable bonds, which would open up more opportunities for larger scale financing.
In addition to the loan program, Pawlenty announced he's setting up a Clean Energy Technology Collaborative. Scientists from academia and industry will work with government department heads to provide a vision and plan for research and development in the field of clean energy.
The governor is also creating a new Office of Energy Security in the Department of Commerce to work on plans for the eventual creation of a carbon trading market.
- All Things Considered, 01/17/2008, 5:19 p.m.