ShareThis

Accelerating Green Building: Sustainable Finance

Currently, homeowners of energy efficient and green homes are typically eligible for a few tax breaks and minor dollar amounts in utility incentives. What’s missing from the picture is the development of a financial “ecosystem” around the consumer where financial advantages make high performance green  homes a no-brainer. Besides benefitting the consumer’s pocketbook, such green financial models offer tremendous opportunity for lending organizations themselves -- through the potential for increased loan volume, decreased risk of default, expansion into new markets, the ability to deliver highly targeted value-added products and the assumption of a position of market leadership. Such financial services will catalyze and enlarge the green home/green remodel market.

Similarly, the property insurance market is also ripe for new green homeowner-oriented products.Certified homes are better constructed, more weatherproof and more durable. Indoor air quality is healthier and there is less opportunity for mold and mildew formation. A recent Oregon DEQ study conducted by Earth Advantage Institute concluded that maintenance over the home's lifetime represented the largest portion of lifetime cost. High performance homes can significantly reduce maintenance through smart building techniques and the use of sustainable, more durable materials.

EAI's first public partnership, with Fireman's Fund Insurance Company, is one of many sustainable finance milestones the industry can expect to see inthe near future. Fireman's Fund new green home credit offers Earth Advantage New Homes-certified homeowners a 5% discount on their homeowner's premium. While 5% may not seem like a lot, the creation of additional preferred lending and insurance products for homes with energy upgrades, certified additions and accessory dwelling units (ADUs) will eventually result in a network of market-driven financial incentives that will funnel homeowners and homebuyers towards more sustainable, comfortable, durable and healthy residences.

About the Author

Dakota Gale

Dakota Gale's experience includes designing solar panels and semiconductor technology in California. He has also worked as a green building engineer for PAE Consulting Engineers in Portland, Oregon designing LEED Certified green buildings and modeling building energy use. He also teaches a class on sustainability at Marylhurst University. Prior to Earth Advantage, Dakota operated a mortgage business for residential loans.