The Lineup: Hawaii

In May, the Aloha State’s legislature passed a bill authorizing an innovative structure for financing commercial and residential energy-efficiency equipment upgrades and on-site generation installations with low-cost debt through a Green Infrastructure Loan Program. It involves investment-grade bond financing – credit-enhanced through Hawaii’s clean-energy systems benefit charge (a dedicated utility surcharge) – along with on-bill repayment capabilities.

As interest payments on the green infrastructure bonds come from loan payments by participating businesses – via the dedicated surcharge – they should command triple-A ratings, translating to low-interest loans for retrofits and renewable generation projects.

And the bonds don’t entail a general obligation guarantee from the state government – so nor does the state need to account for the bond obligation in its debt limit, for that matter. Accordingly, Hawaii’s plan is to issue $100 million of these bonds to initially capitalize the loan fund.

– Brad Berton

View information on how other states have approached green retrofit financing.