One of the state’s preferred ways to combat climate change leans heavily on residents ditching fossil fuels to heat, cool, and power their homes. But those changes don’t come cheap.
A new $20 million program through the state’s Community Climate Bank aims to help by offering low-interest loans to low-and moderate-income homeowners for clean energy improvements, the Healey administration announced Monday.
“Low- and moderate-income families disproportionally carry the burden of both climate change and the high cost of housing,” said Governor Maura Healey. “Programs like this will help provide affordable financing options for homeowners to support our clean energy transition.”
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The loans, which will cover as much as $100,000, could be used for improvements including roof replacement, oil tank removal, home weatherization, electrical system upgrades, heat pumps, rooftop solar installation, battery storage and electric vehicle charging stations, according to the state. In order to qualify, the upgrades have to reduce the home’s total energy usage by at least 20 percent.
This is the first program offered by the state’s climate bank, which was formed last June. Unlike other climate banks in the nation, Massachusetts’ version was launched with a specific focus on decarbonizing housing. It is part of MassHousing, the state’s affordable housing financing and investment bank.
Of all the big challenges facing the state in its race to get to net-zero carbon emissions by 2050, one of the thorniest is figuring out how to transition buildings off fossil fuels while making them more energy efficient. Residential and commercial buildings are responsible for roughly 30 percent of the state’s greenhouse gas emissions. Of that, 60 percent of building emissions come from single-family and multi-family homes.
What’s more, there’s a growing body of research showing that the natural gas used inside peoples’ homes can contain varying levels of toxic chemicals, including ones that can cause cancer or childhood asthma.
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“We really believe decarbonization in the building sector is important and we have the data to back that,” said Chrystal Kornegay, chief executive of MassHousing. “We also know that nationally and locally, figuring out how to find the right tools to help homeowners decarbonize is a huge piece.”
After surveying some existing borrowers from MassHousing, the administrators of the green bank learned a few key things: People wanted to make energy efficiency improvements at home and need low-cost capital to do it; they’re not sure how to access the various state and federal incentives available; and they struggle to find contractors, said Maggie Church, director of policies and programs at the state’s green bank.
“The average person has about 14 minutes a week to think about this, if we’re lucky,” said Church.
The loans will be available to homeowners earning less than 135 percent of the area’s median household income, ranging from $190,775 in Greater Boston, to $124,875 in Berkshire County. The loans can be used to finance improvements in either owner-occupied single-family homes, or in owner-occupied multi-family homes with up to four residential units. Depending on household income, interest rates will range from 0.5 percent to 2 percent over a 20-year term.
There’s reason to expect these loans will be popular. In Connecticut, which founded the nation’s first green bank in 2011, more than 46,000 households have used loans to access solar energy.
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Massachusetts’ program is starting relatively small — if the loans were maxed out, the funds would cover just 200 households — but the state plans to expand and offer 1,000 such loans in the next two years.
Melissa Hoffer, the state’s climate chief, said the program will also help demystify the process of making homes energy efficient. “For the first time, low- and moderate-income homeowners will have concierge support — a real person — to walk them through, every step of the way, what needs to be done to make their home more energy efficient, switch to clean energy, and take care of coordinating all the eligible rebates in addition to flexible low-cost financing,” she said.
As of Monday, homeowners can visit the bank’s website to check their eligibility and find a concierge provider for their part of the state. From there, the provider can explain the program and schedule a home energy assessment. Through the assessment, the homeowner can find out what improvements are recommended, the costs, the available rebates or tax credits and then be connected with a lender to start the loan application process.
Sabrina Shankman can be reached at sabrina.shankman@globe.com. Follow her @shankman.