The upfront cost is often a significant barrier that prevents homeowners and businesses from investing in energy efficiency, despite the long-term energy savings and other benefits. With seed funding from the state in 2009, Public Sector Consultants (PSC) embarked on the creation of Michigan Saves, an innovative financing system for energy efficiency and renewable energy upgrades. Now an independent nonprofit organization, Michigan Saves provides affordable financing for homeowners and businesses statewide through partnerships with local lenders and contractors. The organization leveraged the state’s initial investment by a factor of 20—resulting in millions of dollars of loan capital and other incentives available to customers to invest in clean energy.

Residential Program Results to Date

Through June 30, 2012, the Michigan Saves Home Energy Loan Program has fostered over 1,400 loans totaling more than $11 million.

These loans have cut energy bills in homes built from 1801 to 2012, with the average home built in 1951. The newest home on record used a Michigan Saves loan to install a ground source (geothermal) heat pump, taking advantage of the moderate temperatures in the ground to boost efficiency and reduce the operational costs of heating and cooling systems. The average size home utilizing this program is over 2,100 square feet.

On average, the total project cost for these energy improvements is over $8,500. These loans have led to the following energy-saving investments:

• More than 500 high-efficiency furnaces
• More than 1,160 new windows
• More than 550 attics and 270 walls insulated
• More than 1,000 homes received “air sealing” to eliminate wasteful leaks
• More than 31 ground source heat pumps and 6 solar photovoltaic installations

Stay tuned for additional information on Michigan Saves programs and impacts.

 By Sally Talberg and Terri Schroeder