The $40 million of Recovery Acts funds used for weatherizing more than 6,500 homes over the next two years in Arkansas is a welcomed boost, but Martha Jane Murray of the Clinton Foundation is thinking bigger.
“How do we create a more robust delivery system that is not just relying on federal dollars,” asks Martha Jane, the program director for the foundation’s Arkansas Clinton Climate Initiative (CCI AR).
For CCI AR, one answer is the Home Energy Affordability Loan, or HEAL, program.
In a unique approach to help chip away at the list of homes in need of weatherization and lower industrial energy consumption, CCI AR developed a loan program in which employees borrow money from employers for energy efficiency upgrades. The employers fund the loans using money saved through their own energy-efficiency projects.
The L’Oréal USA facility in North Little Rock, Ark., is the first location to test the program, which is being financed with a portion of the $2 million of Recovery Act funds awarded to CCI AR. The company is self financing lighting retrofits in exchange for offering 100 employees energy audits and subsequent loans to perform the upgrades.
“The goal is replication,” Martha Jane says. “The CCI AR would like to implement this type of revolving loan program in companies all over Arkansas and the country.”
Here’s how it works: If a business qualifies to participate in the HEAL program, it receives a free commercial audit and access to a fixed amount of funds from the HEAL zero-interest loan fund for the retrofit. In return, the business agrees to provide zero interest loans for employees—either by putting the money upfront or using energy savings to fund the loans—so workers can improve energy efficiency in their homes. CCI AR provides one-stop coordination for these audits and upgrades for the employees. The employee then pays back the employer in payroll deductions with the money they have saved on their energy bills every month.
“A lot of those folks would not go to a bank to get energy loans,” Martha Jane says. “But if it’s brought to the workplace, it eliminates a lot of the drudge factors.”
The idea for the program came to Martha Jane after Hurricane Katrina. She was involved in a rapid rebuilding project of 44 energy-efficient homes in 100 days in New Orleans—saving those homeowners an average of 50 percent on their utility costs. “It occurred to me that there were people everywhere who could benefit from this, beyond what the weatherization program can provide,” Martha Jane says. She wanted to help low and middle income residents upgrade their homes, so she started with the employees in her husband’s shoe factory in Wynne, Ark.
A commercial energy audit and upgrade was performed and was projected to save the factory $40,000 a year. Martha Jane then convinced her husband to put the savings into a revolving loan for their employees. They loaned 12 employees up to $2,000 each to perform upgrades. “We had zero loan defaults,” Martha Jane says.
Satisfied with the results, Martha Jane and CCI AR wanted to take the program to a full-fledged pilot phase. Arkansas’ L’Oréal USA facility seemed like the best fit.
“This was a marriage made in heaven,” Martha Jane says.
L’Oréal is among the greenest companies in the state. The company’s North Little Rock facility pulls all of its energy from a hydrodam and received upgrades, including light-emitting diodes for exit signs and energy-efficient equipment, such as variable speed drives for a chiller.
“Doing this kind of work is not new for us,” says David Lovejoy, engineering director at the L’Oréal facility in North Little Rock. “And our employees are very progressive in sustainable matters.”
In April, 100 of those employees started receiving free home energy audits. Based on income, the families will be eligible to receive retrofit implementation assistance from trained AmeriCorps service members (part of the CCI AR comprehensive HEAL program.)
“There is barely any out-of-pocket cost to the employees,” David says. Working with CCI AR and the facility to determine energy savings, employees will be able to pay back the loans by way of payroll deductions.
Martha Jane calls it an “alternative path for weatherization.” While the Weatherization Assistance Program provides money for those at or below 200 percent the federal poverty line, this program is open to middle income residents as well. It also saves energy and money for both companies and their employees.
CCI AR is looking for three more companies in Arkansas' 1st, 3rd and 4th Congressional Districts to participate in pilot projects.
“I’m hopeful that the pilot program is going to be successful and transition to a national level,” says David. “One of the objectives is replication, and we can expedite the process if we lay the ground work now.”