Maryland: A social justice case study in residential renewable energy incentives

Maryland, like many states, provides generous grants to families who can afford solar, geothermal and wind systems. The only major renewable left out of Maryland’s programs is wood for heat, despite the existence of modern, clean burning systems like pellet stoves and advanced wood combustion (AWC) that are popular in Europe.

In 2009, the State of Maryland invested $3,920,000 in residential wind, solar and geothermal energies to subsidize 873 families or small businesses to lower their carbon footprint. This averages out to giving about $4,500 to these 873 families to eliminate 2,205 metric tons of carbon per year. This comes to $90 per ton of carbon, assuming a 20-year lifespan of the systems, excluding all the administrative costs incurred by the state to run the program. The price per ton of carbon avoided through Cash for Clunkers was estimated to be $50 by one authoritative source and in excess of $200 by some critics.

While the Alliance for Green Heat support incentives for solar, wind and geothermal, the incentives tend to go to families whose joint incomes are likely in excess of $150,000 because the upfront costs are usually $20,000 - $30,000 with 5 – 15 year payback periods. Giving checks to the wealthiest Maryland citizens, when tens of thousands of low-income Maryland residents are struggling to pay their utilities and their food bills is an ethical issue that has received scant public consideration.

If Maryland had used that same budget, $3,920,000, to subsidize modern, low emission pellet stoves or advanced wood combustion systems, it could have helped three times more families and helped working families install systems that would help them lower their utility bills with only a 2 -5 year payback period. And, we could reduce 3 or 4 times as much carbon, costing the state about $25 per ton.

The beauty of the modern pellet or wood stove is that it emits under 2 or 3 grams of particulates per hour, unlike traditional stoves that emit 30 – 40 grams per hour. Modern stoves cost $2,000-3,000 (including installation) and are already popular in rural, low-income areas where many Maryland residents get their fuel from storm-felled trees or the wood waste stream.

Maryland renewable energy subsidies comparison*
Renewable energy	Cost	CO2 Offset	Households effected
Solar	$2,750,000	1,293 metric tons	500
Geothermal	$1,000,000	718 metric tons	350
Wind	$170,000	194 metric tons	23
Total	$3,920,000	2,205.5 metric tons	873
Wood	$3,920,000	8,820 metric tons	3,920

· Note: Table provided for comparison purposes only. The Alliance for Green Heat does not advocate replacing incentives for solar, geothermal and wind, only adding wood heat to the list of approved technologies.

· The number of woodstoves incentivized is calculated from a $1,000 per stove grant, or about one third to one half the purchase price. The CO2 offsets are calculated by converting the heat source or electricity displaced with each energy source into equivalent CO2.

Maryland’s low-income population has been largely overlooked in renewable energy policy. There are other little-known benefits of wood heat: low-income families who heat primarily with wood are 2 – 3 times less likely to be on public heating assistance than low-income families using fossil fuel heat. Wood allows families to be self-sufficient and it usually directly offsets imported heating oil, or electric heat -- which in Maryland is primarily made with coal.

Solar panels remain out of the grasp of low and middle income families in Maryland, where the median household income is $70,000. Geothermal and wind energy tell similar stories. It’s time to include low-income households in the state’s renewable energy policy. Luckily, Maryland has progressive officials who are interested and open to the benefits of wood heat as long as modern, low emission systems are being considered.

Wood heat is great at reducing our carbon footprint, but it can’t do what solar and wind can: efficiently provide electricity. Similarly, wood can meet needs that solar and wind can’t: efficiently provide space heating. These technologies together will be far more effective than any of them alone.

LIHEAP funding fall short for coming winter

The outlook for a full year appropriation for LIHEAP (Low Income Home Energy Assistance Program) are increasingly dim. Low income advocates and the big utilities that receive the funds are pressing for $5.1 billion, which would match last year's appropriation. At this point, $3.3 billion is looking more likely.

The Alliance for Green Heat is working with heating assistance groups and trying to expand the opportunities for low income homes that use wood and pellets for heat. LIHEAP data provides some extremely interesting insight into low income families that heat with wood. For example, with the fossil fuels the number of low-income families using those fuels correlates with the number of families receiving assistance to pay for those fuels. But with wood, of the approximately 3% of low income families that use wood, less than 1% receives assistance for it.

The Alliance is currently looking for experts and stakeholders who have knowledge and experience with LIHEAP.

The following analysis is provided by the National Low Income Energy Consortium: Lawmakers moved into the August recess without having reached agreement on the appropriations bill to fund the Departments of Labor, Health and Human Services and Education – a measure that includes funding for the Low Income Home Energy Assistance Program. If they fail to approve the funding bill before the start of the new fiscal year, the likely scenario would be passage of a continuing resolution after the November elections. “For planning purposes, that will make it extremely difficult to plan on an appropriations level,” said Mark Wolfe, executive director of the National Energy Assistance Directors’ Association. “In the past, most continuing resolutions have provided for the lesser of the House or Senate [funding] level and sometimes they approve operating on the same spend-out rate as the previous year.” As such, he said, states could be left in a situation where they will be entering the program year with access to 60 percent of last year’s funding level. The House Appropriations subcommittee with jurisdiction over LIHEAP funding provided $5.1 billion for the program, the same level as last year. The Senate Appropriations Committee provided $3.3 billion, the same level as in the President’s budget request. The Senate bill also included language that its recommendation assume enactment of the “trigger” provision proposed by Present Obama to would provide additional funding based on higher prices and other factors

Washington Post Editors Question Energy Subsidies for the Rich

A recent editorial in the Washington Post, “Low Voltage,” criticized the DOE’s support for a electric car battery plant on the grounds that “electric cars will be far too expensive for anyone but upper-income Americans. The only way to sell them, even to the well-off, will be with a large federal subsidy.”

This amounts to, the editors said, “federally supported income redistribution -- toward the top.“ We couldn’t agree more, but why focus on electric car batteries when the exact same phenomena is occurring with residential solar PV, geothermal and wind energy?

Sourced from the Washington Post,
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/31/AR2010073102589.html
and the Valley News,
http://www.vnews.com/08062010/6903356.htm

PACE Programs Stalled

The much heralded PACE programs, which would allow homeowners in many state to finance wood and pellet stoves and boilers with a long-term loan attached to the home’s property tax bill, have ground to a halt.

The Federal Housing Finance sent a letter to Congress in August reaffirming its opposition to Property Assessed Clean Energy legislation (PACE). The Agency has effectively halted PACE programs across the nation, which had been helping home and business owners finance small-scale clean energy projects with loans tied to property taxes.

Nevertheless, thermal biomass advocates and experts should still be in touch with their state officials to ensure that thermal biomass equipment can be part of their state’s PACE program when and if the programs move forward again.

For more information and assistance about biomass language in state legislation, you can contact us at, info@forgreenheat.org.

For more info: http://motherjones.com/blue-marble/
2010/08/fannie-regulator-pace,
and
http://www.forgreenheat.org/policy/
doe_policy.html.

National wood stove rebates program still possible

A national wood stove rebate program providing up to a $1,000 point of sale rebate is still possible for 2011 through the Home Star bill. The bill, part of S. 3663, was being considered by the Senate prior to the August recess but did not come up for a vote. Home Star still has strong support, and the current state of our economy means that Home Star is more important than ever. The Home Star Coalition, of which the Alliance for Green Heat is an active member, with Efficiency First and other groups, are still pushing for passage. And now that Senators are coming back to DC, it's time to ramp up our efforts.

We have a couple key opportunities to get Home Star passed this year. One of them starts next week, when Congress is scheduled to be in session for three weeks before the election. It is our sincere hope that Senators - from both sides of the aisle - are working together to constructively resolve concerns in the legislation in order to move to bi-partisan passage of the bill.

For more information: http://www.forgreenheat.org/incentives/
homestarpage.html
To take action: http://www.efficiencyfirst.org/home-star/.