Sustainable Economics
Economic sustainability is the key success factor in any green project. Whether it’s a home or business improvement, alternative energy source, or fuel efficient car, money is the great enabler. Economic sustainability describes the ability to structure a green project or purchase so that it literally pays for itself, or at least for a good part of itself. Who could possibly argue with the logic of implementing a green improvement or purchasing a green vehicle if it is self-funding?
It Starts with Green Financing
Although the term green financing is relatively new, the concept has been around for a long time. Fannie Mae, the Federal Housing Administration (FHA) and the Veterans Administration (VA) have all practiced a form of green financing since the 70’s by relaxing the standards for loan approvals when purchasing energy efficient homes, or when making energy efficient upgrades. Closer to home, the State of Florida has a number of incentives in place to enable economic sustainability for green initiatives.
A Creative Approach to Green Financing 
Marine Bank’s Green HELOC and Green commercial loans are based on a list of energy efficient or sustainable improvements that the borrower wishes to install. A borrower applies for the loan or line of credit, presents the list of qualified improvements to the bank, and installs the upgrades. Upon completion of the project, the borrower presents the bank with the contractor’s paid bill, a signoff from a government inspector, or other proof of installation. Marine Bank then proceeds with a reduction of the interest rate of the loan, which lasts for the life of the loan.
Here’s where sustainable economics come back into play. The alternative energy equipment that Solar Solutions installs has a very long life span. As mentioned previously, the warranties are typically fifteen years, and the actual usable life is even longer than that. Because of their longevity, the bank will accept them under a home equity line of credit which can be extended much longer—ten to fifteen years—than a typical personal loan. Moreover, because this equipment saves energy, the IRS allows an accelerated depreciation schedule of five years, despite its true usable life. By financing improvements such as a photovoltaic generation system, solar hot water heater, or pool/spa heater with a green HELOC, the borrower eliminates the need for an out-of-pocket up front expense—they just write a check against the credit line.
Furthermore, between energy savings, rebates and tax deductions, the monthly loan payment can be almost entirely offset. The net result is that during the life of the loan, the borrowers’ monthly outflow is no different than if they were paying for electricity. But in fact, at no additional monthly cost, the borrower is not using any electricity, or is using a dramatically reduced amount, which of course is the goal. An added benefit is that after the loan is paid off, savings mount dramatically. And should the price of electricity rise—which today at least appears inevitable—the borrower sees the return even sooner. Such is the beauty of economic sustainability.
