[Congressional Record Volume 157, Number 74 (Thursday, May 26, 2011)]
[Senate]
[Pages S3442-S3444]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WHITEHOUSE (for himself, Mr. Alexander, and Mr. Udall of 
        Colorado):
  S. 1126. A bill to amend the Energy Independence and Security Act of 
2007 to authorize the Secretary of Energy to insure loans for financing 
of renewable energy systems leased for residential use, and for other 
purposes; to the Committee on Energy and Natural Resources.
  Mr. WHITEHOUSE. Mr. President, I rise today to introduce the 
Renewable Energy Access through Leasing Act of 2011 or the REAL Act of 
2011. I'd like to thank Senator Lamar Alexander and Senator Mark Udall 
for joining in this bipartisan effort.
  Many homeowners would like to install solar panels or other renewable 
energy systems, but face the daunting challenge of paying the upfront 
cost for the technology. To purchase and install a new solar energy 
system, for example, can cost between $20,000 and $30,000. This is a 
significant and often prohibitive cost, even when more than justified 
by long-term savings.
  A promising option to promote residential use of renewable energy is 
leasing. Here is how it works: A company pays to purchase and install 
the system and the homeowner pays a fixed monthly fee to lease the 
renewable energy system from the company. It is easy for the homeowner, 
often requires no upfront cost, and can even save them money on 
electricity bills. Leasing has been successfully used for everything 
from satellite TV dishes to car. Why not solar panels too?
  One of the problems has been that renewable energy system leasing 
does not have a well-established financial market. Investors are 
reluctant to pursue these opportunities, in large part because of the 
uncertain lifespan of the renewable energy systems. The REAL Act would 
address that problem by having the Department of Energy insure the 
value of the lease. This would help create a secondary market for 
renewable energy system leases to residential customers, freeing up 
additional capital to invest in these programs.
  The benefits of renewable energy are manifold and well-documented. 
Renewable energy creates jobs. From the engineers who design the 
systems to the technicians who install them, this industry has the 
potential to support thousands of new jobs.
  Renewable energy promotes energy independence. Oil still accounts for 
approximately 40 percent of our total energy needs, and seventy percent 
of this oil is imported from foreign countries, many of whom, to put it 
mildly, are not committed to our best interests. We are sending $1 
billion per day overseas to fund this addiction.
  Renewable energy reduces harmful pollution. Many of our current dirty 
sources of energy are significant contributors to air pollution, 
leading to increased cases of asthma, respiratory diseases, and birth 
defects. Moreover, these energy sources are significant contributors to 
global climate change, harming our communities through sea level rise 
and increased extreme weather. Rapidly rising greenhouse gas 
concentrations are also putting severe strain on our oceans through 
acidification and temperature change, creating conditions not seen for 
millions of years. In my home state of Rhode Island, the Narragansett 
Bay has witnessed a 4 degree increase in average annual temperature, 
causing what amounts to a full ecosystem shift.
  It is hard to disagree that renewable energy offers solutions to many 
of the problems facing our country. But there is often disagreement 
about the best way forward to promote renewable energy. Some are 
concerned about the budget impact of promoting renewable energy, some 
are concerned about government mandates, and some are concerned about 
government subsidies. While we may disagree on other means to promote 
renewable energy, I am hoping that we can all agree on this bipartisan 
proposal.
  The REAL Act would not add a dime to the budget deficit. The 
Congressional Budget Office scored similar legislation last Congress as 
having no budget impact. It achieves this goal because the insurance 
program is paid for entirely through premiums. The bill also protects 
the taxpayer in the case of a default because the government has the 
right to collect revenues directly from the renewable energy system.
  The REAL Act is not a subsidy and requires no appropriation. It 
relies on the value of the renewable energy system itself to provide 
the basis for the insurance.
  The REAL Act is also not a mandate. It has no requirement to use the 
leasing mechanism, but merely facilitates the expansion of renewable 
energy leasing to homeowners.
  While this bill is only one piece of the puzzle to solving our 
overall energy problem, I hope that it is a piece we can all agree on. 
Providing additional options to lease renewable energy systems is a win 
for our homeowners, our economy, and our environment.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1126

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Renewable Energy Access 
     through Leasing Act of 2011'' or the ``REAL Act of 2011''.

     SEC. 2. LOANS FOR FINANCING OF RENEWABLE ENERGY SYSTEMS 
                   LEASED FOR RESIDENTIAL USE.

       Subtitle A of title IV of the Energy Independence and 
     Security Act of 2007 is amended by inserting after section 
     413 (42 U.S.C. 17071) the following:

     ``SEC. 414. LOANS FOR FINANCING OF RENEWABLE ENERGY SYSTEMS 
                   LEASED FOR RESIDENTIAL USE.

       ``(a) Purposes.--The purposes of this section are--

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       ``(1) to encourage residential use of renewable energy 
     systems by minimizing upfront costs and providing immediate 
     utility cost savings to consumers through leasing of those 
     systems to homeowners;
       ``(2) to reduce carbon emissions and the use of 
     nonrenewable resources;
       ``(3) to encourage energy-efficient residential 
     construction and rehabilitation;
       ``(4) to encourage the use of renewable resources by 
     homeowners;
       ``(5) to minimize the impact of development on the 
     environment;
       ``(6) to reduce consumer utility costs; and
       ``(7) to encourage private investment in the green economy.
       ``(b) Definitions.--In this section:
       ``(1) Authorized renewable energy lender.--The term 
     `authorized renewable energy lender' means a lender 
     authorized by the Secretary to make a loan under this 
     section.
       ``(2) Renewable energy system lease.--The term `renewable 
     system energy lease' means an agreement between an authorized 
     renewable energy system owner and a homeowner for a term of 
     not less than 5 years, under which the homeowner--
       ``(A) grants an easement to the renewable energy system 
     owner to install, maintain, use, and otherwise access the 
     renewable energy system; and
       ``(B) agrees to--
       ``(i) lease the use of the system from the renewable energy 
     system owner; or
       ``(ii) a power purchase agreement.
       ``(3) Renewable energy manufacturer.--The term `renewable 
     energy manufacturer' means a manufacturer of renewable energy 
     systems.
       ``(4) Renewable energy system.--The term `renewable energy 
     system' means a system of energy derived from--
       ``(A) a wind, solar (including photovoltaic and solar 
     thermal), biomass (including biodiesel), or geothermal 
     source; or
       ``(B) hydrogen derived from biomass or water using an 
     energy source described in subparagraph (A).
       ``(5) Renewable energy system owner.--The term `renewable 
     energy system owner' means a homebuilder, a manufacturer or 
     installer of a renewable energy system, or any other person, 
     as determined by the Secretary.
       ``(c) Authority.--
       ``(1) In general.--The Secretary may, on application by an 
     authorized renewable energy system owner, insure or make a 
     commitment to insure a loan made by an authorized renewable 
     energy lender to a renewable energy system owner to finance 
     the acquisition of a renewable energy system for lease to a 
     homeowner for use at the residence of the homeowner.
       ``(2) Terms and conditions.--The Secretary may prescribe 
     such terms and conditions for insurance under paragraph (1) 
     as are consistent with the purposes of this section.
       ``(d) Limitation on Principal Amount.--
       ``(1) Limitation.--The principal amount of a loan insured 
     under this section shall not exceed the residual value of the 
     renewable energy system to be acquired with the loan.
       ``(2) Residual value.--For purposes of this subsection--
       ``(A) the residual value of a renewable energy system shall 
     be the fair market value of the future revenue stream from 
     the sale of the expected remaining electricity production 
     from the system, pursuant to the easement granted in 
     accordance with subsection (e); and
       ``(B) the fair market value of the future revenue stream 
     for each year of the remaining life of the renewable energy 
     system shall be determined based on the net present value of 
     the power output production warranty for the renewable energy 
     system provided by the renewable energy manufacturer and the 
     forecast of regional residential electricity prices made by 
     the Energy Information Administration of the Department.
       ``(e) Easement.--
       ``(1) In general.--The Secretary may not insure a loan 
     under this section unless the renewable energy system owner 
     certifies, in accordance with such requirements as the 
     Secretary shall establish, consistent with the purposes of 
     this section, that the renewable energy system financed will 
     be leased only to a homeowner that grants an easement to 
     install, maintain, use, and otherwise access the renewable 
     energy system that includes the right to sell electricity 
     produced during the life of the renewable energy system to a 
     wholesale or retail electrical power grid.
       ``(2) Assumable lease.--The renewable energy system lease 
     shall specify that the renewable energy system lease can be 
     assumed by new homeowners.
       ``(f) Discount or Prepayment.--
       ``(1) In general.--To encourage the use of renewable energy 
     systems, the Secretary shall ensure that a discount given to 
     a homeowner by a renewable energy system owner or other 
     investor or prepayment of a renewable energy system lease by 
     a renewable energy system owner does not adversely affect the 
     mortgage requirements of the homeowner.
       ``(2) Consultation.--In carrying out this subsection, the 
     Secretary may consult with agencies and entities involved in 
     oversight of home mortgages.
       ``(g) Eligibility of Lenders.--The Secretary may not insure 
     a loan under this section unless the lender making the loan 
     is an institution that meets such requirements as the 
     Secretary shall establish for participation of renewable 
     energy lenders in the program under this section.
       ``(h) Certificate of Insurance.--
       ``(1) In general.--The Secretary shall issue to a lender 
     that is insured under this section a certificate that serves 
     as evidence of insurance coverage under this section.
       ``(2) Contents of certificate.--The certificate required 
     under paragraph (1) shall describe the fair market value of 
     the future revenue stream for each year of the remaining life 
     of the renewable energy system.
       ``(3) Full faith and credit.--The certificate required 
     under paragraph (1) shall be backed by the full faith and 
     credit of the United States.
       ``(i) Payment of Insurance Claim.--
       ``(1) Filing of claim.--The Secretary shall provide for the 
     filing of claims for insurance under this section and the 
     payment of the claims.
       ``(2) Payment of claim.--A claim under paragraph (1) may be 
     paid only on a default under the loan insured under this 
     section and the assignment, transfer, and delivery to the 
     Secretary of--
       ``(A) all rights and interests arising under the loan; and
       ``(B) all claims of the lender or the assigns of the lender 
     against the borrower or others arising under the loan 
     transaction.
       ``(3) Lien.--
       ``(A) In general.--On payment of a claim for insurance of a 
     loan under this section, the Secretary shall hold a lien on 
     the underlying renewable energy system assets and any 
     associated revenue stream from the use of the system, which 
     shall be superior to all other liens on the assets.
       ``(B) Residual value.--The residual value of the renewable 
     energy system and the revenue stream from the use of the 
     system shall be not less than the unpaid balance of the loan 
     amount covered by the certificate of insurance.
       ``(C) Revenue from sale.--The Secretary shall be entitled 
     to any revenue generated by the renewable energy system from 
     selling electricity to the grid when an insurance claim has 
     been paid out.
       ``(j) Assignment and Transferability of Insurance.--A 
     renewable energy system owner or an authorized renewable 
     energy lender that is insured under this section may assign 
     or transfer the insurance, in whole or in part, to another 
     owner or lender, subject to such requirements as the 
     Secretary may prescribe.
       ``(k) Premiums and Charges.--
       ``(1) Insurance premiums.--
       ``(A) In general.--The Secretary shall fix and collect 
     premiums for insurance of loans under this section, that 
     shall be--
       ``(i) paid by the applicant renewable energy system owner 
     at the time of issuance of the certificate of insurance to 
     the lender; and
       ``(ii) adequate, as determined by the Secretary, to cover 
     the expenses and probable losses of administering the program 
     under this section.
       ``(B) Deposit of premium.--The Secretary shall deposit any 
     premiums collected under this subsection in the Renewable 
     Energy Lease Insurance Fund established by subsection (l).
       ``(2) Prohibition on other charges.--Except as provided in 
     paragraph (1), the Secretary may not assess any other fee 
     (including a user fee), insurance premium, or charge in 
     connection with loan insurance provided under this section.
       ``(l) Renewable Energy Lease Insurance Fund.--
       ``(1) Fund established.--There is established in the 
     Treasury of the United States the Renewable Energy Lease 
     Insurance Fund (referred to in this subsection as the 
     `Fund'), which shall be available to the Secretary without 
     fiscal year limitation, for the purpose of providing 
     insurance under this section.
       ``(2) Credits.--The Fund shall be credited with--
       ``(A) any premiums collected under subsection (k)(1);
       ``(B) any amounts collected by the Secretary under 
     subsection (i)(3); and
       ``(C) any associated interest or earnings.
       ``(3) Availability.--Amounts in the Fund shall be available 
     to the Secretary for--
       ``(A) fulfilling any obligations with respect to insurance 
     for loans provided under this section; and
       ``(B) paying administrative expenses in connection with 
     this section.
       ``(4) Excess amounts.--The Secretary may invest in 
     obligations of the United States any amounts in the Fund 
     determined by the Secretary to be in excess of amounts 
     required at the time of the determination to carry out this 
     section.
       ``(m) Ineligibility for Purchase by Federal Financing 
     Bank.--Notwithstanding any other provision of law, no debt 
     obligation that is insured or committed to be insured by the 
     Secretary under this section shall be subject to the Federal 
     Financing Bank Act of 1973 (12 U.S.C. 2281 et seq.).
       ``(n) Regulations.--
       ``(1) In general.--The Secretary shall issue such 
     regulations as are necessary to carry out this section.
       ``(2) Multifamily housing.--In issuing the regulations, the 
     Secretary shall ensure that multifamily housing units are 
     eligible for programs established by this section.
       ``(3) Timing.--Not later than 180 days after the date of 
     enactment of this section, the Secretary shall issue interim 
     or final regulations.
       ``(o) Termination of Authority.--The authority of the 
     Secretary to insure and make commitments to insure new loans 
     under this

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     section shall terminate on the date that is 10 years after 
     the date of enactment of this section.''.
                                 ______