Borrow Money to Go Green

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Creative Commons License photo credit: Allan Henderson

One of my dreams is to live completely off grid, where I don’t have to rely on the electric company to supply my energy. While this is a goal of mine, I just can’t afford it right now. I can save my money, but it’s still going to be years before I’ll be able to afford solar panels or geothermal heating.  Recently I heard of Property Assessed Clean Energy Bonds (PACE Bonds). Basically it’s a program that helps people purchase green energy products and pay later.

It works like this: investors purchase bonds from cities and the money is lent to commercial and residential property owners who are interested in improving efficiency measures and installing renewable energy devices.  The borrowers have up to 20 years to pay back the loans, making payments with their annual property taxes.  I think it’s a great idea.

Some of the positives are job creation, creation of movement away from non-renewable resources like oil, lower energy bills to the homeowner, reduction of greenhouse gases and carbon dioxide emissions, and very low risk to the lenders.

The only downfall I could come up with is that you’re still going to be in debt.  If you can’t pay it, there will be a lien placed on your house, same as with unpaid property taxes.

All in all, if more cities started doing this, I think that we’d see a lot of positive economic growth.

Would you borrow money to go green?

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17 thoughts on “Borrow Money to Go Green

  1. Little House says:

    I like the idea of this plan. Being in debt for 20 years doesn’t sound great, but the savings in energy cost could off set the initial amount spent and theoretically it could be applied to the debt amount. I’ll have to check this out. Thanks for the info!

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    Mrs Money Reply:

    Little House- You’re welcome! I thought it was a pretty good idea. Let me know if you end up doing it!

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  2. Random Thoughts of a Jersey Mom says:

    I’d love to have solar panels but have to cut down several big trees right behind the house to do it. Plus, it’s very expensive. Maybe I’ll be able to in a few years, after the mortgage has been paid off.

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    Mrs Money Reply:

    Random Thoughts- I would miss the trees too! 🙁 I am jealous your mortgage will be paid off in a few years!!

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  3. Money Funk says:

    I just heard of a company yesterday (sorry, name escapes me) that now rents out solar panels. It helps them to keep up with the market during such economical hardships. And they are doing quite well with it. So, I might look into a rental option or receiving tax incentives for going house green. I don’t know about borrowing due to the possibility of owing money when a product becomes outdated.

    Just where off the grid do you want to live?

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    Mrs Money Reply:

    Money Funk- That’s awesome! I like that idea of renting.

    I would like to live in Colorado, Michigan, or somewhere beautiful out West!

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    Money Funk Reply:

    I would love to live in Colorado, too. My sister does but she is not partial to the cold or snow. So she is not jiving out there.

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  4. Mrs. Accountability says:

    Mr. A and I have often wished we could figure out how to do solar panels ourselves. They can’t be that hard and there is certainly enough sunshine in Arizona! I have heard of a leasing program and they say it costs less to lease the solar equipment than to pay your electricity bill. I will have to listen to the radio commercials more closely and report back.

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    Mrs Money Reply:

    Mrs. A- You should totally do it!! Let me know if you find more info out about renting solar panels. That sounds so neat.

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  5. Simple in France says:

    In France they’re so weird about this. You are actually forbidden by law from going ‘off grid.’ If you get solar panels that are not for a specific appliance (water heater, fridge etc) but for the whole house, you MUST sell you electricity to the government run EDF. That said, they have this program where you take out a loan for 20,000 euros to get your solar panels on your house. Then you get an immediate credit of 8,000 euros. You then make about 2-3,000 euros a year on a 20 year contract with EDF, which pays for the rest and then some. The way it’s set up now, EDF pays you at 5-6x the going rate for your electricity.

    Weird huh? If we ever own a home, I’d be tempted to go this route, but I don’t really like being in cahoots with the government . . .besides if France decides to become anything like Greece or the State of California, you could end up holding your loan.

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    Mrs Money Reply:

    Simple in France- What?! It’s illegal? That’s kind of crazy. I guess once you read about the program it makes more sense, but I don’t like that they can tell you how to do that. The government sucks!

    I would hate to have the loan called like that too 🙁

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  6. Money Reasons says:

    I love solar power (I even play a bit with solar stocks). And I have to say, be patient. The efficiency of the panels keep getting higher and the cost keeps decreasing all of the time.

    Soon, very soon, it will be very competitive.

    So, yes I would borrow money to go solar and I lived a bit further down south, but not at today’s prices… maybe in 5 years…

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    Mrs Money Reply:

    Money Reasons- Sweet!! I love your optimism. 🙂 I don’t know if we really would do well with solar where I live. I don’t know how long we will stay in our house, so I don’t think I’d really look into it that seriously.

    Thanks for the happy tips! 🙂

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  7. Laura says:

    This is one of our dreams too. I don’t want to borrow money to do it though. I think for now we will just try to lower our energy consuption and work on other areas.

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    Mrs Money Reply:

    Laura- I don’t think we would borrow money either. I like the idea of lowering your energy consumption! We try our hardest to do that too. 🙂

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  8. FinEngr says:

    Mrs. Money:

    You can stay on-grid, still go off-grid, and maybe make some money in the process. Many companies offer “buy back” or “net metering” programs were the energy you produce is purchased and credited to your account. Depending on usage vs. production, I think some programs even will send you checks if you produce more than you use. Only problem is you still pay the flat distribution/service charges.

    **Whoa, just scanned comments and saw Simple in France’s nice addition.

    From reviewing some of the documents, the BIG concern I’d have would be that its more than a loan – its a LIEN.

    That would prevent you from having a clear title and being able to sell your home. You’d be stuck there until the lien is paid or the lender forces sale to reclaim monies owed.

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    Mrs Money Reply:

    FinEngr- I think it would be cool to be able to sell you electricity and make money! That would be fabulous.

    I don’t think I’d actually go through with borrowing the money to go green. It’s not something I’d feel comfortable with. I agree- the lien would make me nervous!

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