California Center for Sustainable Energy

ARRA authorizes local communities to use some or all of their QECB allotment for funding municipal solar and energy efficiency projects, including “green community programs” and energy improvements to publicly owned buildings.

Qualified Energy Conservation Bonds (QECBs) can be used by local and state government agencies on a wide range of activities ; nationwide the QECB program is funded at $2.4B; each state has received an allocation based on population, and each state must develop its own mechanism for how allocations are awarded to individual projects.  The ARRA authorized local communities to use some or all of their QECB allotment for funding municipal solar and energy efficiency projects, including capital expenditures that reduce energy consumption on publicly-owned buildings by at least 20%, and implementing green community programs.  Such “green community programs” could include many opportunities for cities, which could issue QECBs to fund loan, rebate and/or grant programs--including issuing QECBs to finance the property tax assessment ( AB 811) model. Note that the bonds would need to be repaid, for example by incorporating the servicing costs into the terms of the loan program itself.  QECBs could also be used by municipal utilities to fund community solar programs, or for public education campaigns to promote energy efficiency. Again, the source of bond repayment would need to be identified.  Finally, up to 30% of the QECB allocation can be used for private activity bonds.