A wise way to spend stimulus dollars
To the Banner Graphic:
Last month when Gov. Daniels spoke to the Greencastle Kiwanis, he expressed concern that the huge influx of federal stimulus dollars that Indiana will soon receive will lead us to "fall off a cliff" in two years when the money runs out. The governor is especially concerned about the $1.3 billion earmarked for education. Fortunately, House Bill 1669, which was authored by Rep. Nancy Michael and has now passed both House and Senate unanimously, offers one solution.
HB1669 calls for the creation of a Geothermal Conversion Loan Fund to help schools switch from conventional heating and cooling to geothermal heat pumps. A growing number of schools in Indiana and across the nation are turning to geothermal to reduce their heating and cooling expenses. According to the EPA, geothermal is "the most energy-efficient, environmentally clean and cost-effective system of temperature control." Although it is initially more expensive to install, geothermal offers immediate and substantial energy savings for the life of the system.
Any stimulus money invested in converting schools to geothermal heat pumps would give back for decades to come. If part of those savings were directed into the Geothermal Conversion Fund, the money would give back exponentially.
This solution is all the more inviting because it would help solidify Indiana's role as a national leader in geothermal. The second largest geothermal parts manufacturer in the nation, Water Furnace, is located in Fort Wayne, and an increasing number of Indiana firms are specializing in geothermal system design and installation.
If used in conjunction with the stimulus money, the Geothermal Conversion Fund could lead to hundreds of schools installing geothermal with a relatively small initial investment.
Here is how it could work.
Let's say the state were to use as little as $40 million of its $1.3 billion in federal education funds to assist geothermal installations in 40 schools over the next two years. Each of the 40 schools would receive half of their allotment as a grant and half as a no-interest loan to be paid back into the Geothermal Conversion Fund out of their utility savings. The $20 million paid into the Fund by the original 40 schools could then be used in future years to pay the "gap" between the cost of installing geothermal and conventional systems in other schools.
Suppose that those later schools were required to pay back 75 percent of their loans. At the end of 20 years, the original $40 million in stimulus money would be sufficient to help nearly 200 schools install geothermal.
The avoided utility costs would reach into the hundreds of millions of dollars.
The president wants stimulus money to be used quickly to generate jobs, improve schools and enhance energy-efficiency. The governor wants the money to be used in ways that provide long-term benefits rather than artificially boosting spending in unsustainable ways. Geothermal fulfills all of these goals. By using the money this way, we would not only avoid "falling off a cliff," we would create a rock-solid foundation for our schools and taxpayers for years to come.
To access our report on geothermal in Indiana schools, go to ingeothermal.pbwiki.com.
Taylor Cantril ('11) and Michael Lutz ('09) are students at DePauw University. Kelsey Kauffman is co-director of the DePauw Environmental Policy Project.