Energy Loan Mgmt 323 team 5
The Energy Loan program
strives to persuade customers of REMC’s in Indiana to use
less energy by helping them improve their home and energy usage to be more efficient. Thiswould be accomplished by helping them finance home improvement projects and replacinginefficient appliances to consume less energy. The REMC, partnered with a financialorganization, would sponsor the front-end cost of these projects and be repaid through themonthly savings of the consumers. The end result would be a bank or credit union loaning to theREMC, which loans to the consumer.Initially the REMC would offer the program to their customers. Those who are interestedand sign up would have an energy advisor inspect their homes and offer suggestions to improveenergy usage and inform them of those that would qualify for the program (those improvementsthat have a high enough return to be covered by the bank). The REMC collate all the loans fromtheir users and report the loans to the bank. The bank would make one larger loan to the REMC,which would disperse it to the consumers to pay for the improvements.
Objectives and Issues
Initially, the consumer would have to hire their own contractor for their homeimprovement and forward the bill to the REMC to receive an accurate loan. This would giveguarantee to the REMC that their money is being used for energy savings. A future objectivecould be setting up a relationship between reliable contractors so that a rate could bestandardized, and the REMC would be assured of quality work and maximized energy reduction.This would be beneficial for the bank as well as quality contracted work would further improvethe security of the loan.
The Bank involved would receive a new source of income from a new and untapped
market. These loans would be a safe and secure investment in today’s market where many loans
are being examined closely. This loan program would be a stable base of income to offset riskier