II 

111TH CONGRESS 

2D SESSION S. 3402 

To encourage residential use of renewable energy systems by minimizing 

upfront costs and providing immediate utility cost savings to consumers 

through leasing of such systems to homeowners, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 24, 2010 

Mr. LEMIEUX introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To encourage residential use of renewable energy systems 

by minimizing upfront costs and providing immediate 

utility cost savings to consumers through leasing of such 

systems to homeowners, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Renewable Energey 

5 Access Through Leasing Act of 2010’’ or the ‘‘REAL Act 

6 of 2010’’. 


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1 SEC. 2. INSURANCE COVERAGE FOR LOANS FOR FINANC2 ING OF RENEWABLE ENERGY SYSTEMS 

3 LEASED FOR RESIDENTIAL USE. 

4 (a) PURPOSES.—The purposes of this section are— 

5 (1) to encourage residential use of renewable 

6 energy systems by minimizing upfront costs and pro7 viding immediate utility cost savings to consumers 

8 through leasing of such systems to homeowners; 

9 (2) to reduce carbon emissions and the use of 

10 nonrenewable resources; 

11 (3) to encourage energy efficient residential 

12 construction and rehabilitation; 

13 (4) to encourage the use of renewable resources 

14 by homeowners; 

15 (5) to minimize the impact of development on 

16 the environment; 

17 (6) to reduce consumer utility costs; and 

18 (7) to encourage private investment in the 

19 green economy. 

20 (b) DEFINITIONS.—As used in this section, the fol21 lowing definitions shall apply: 

22 (1) AUTHORIZED RENEWABLE ENERGY LEND23 ER.—The term ‘‘authorized renewable energy lend24 er’’ means a lender authorized by the Secretary to 

25 make a loan under this section. 


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1 (2) RENEWABLE ENERGY SYSTEM LEASE.—The 

2 term ‘‘renewable system energy lease’’ means an 

3 agreement between an authorized renewable energy 

4 system owner and a homeowner for a term of not 

5 less than 5 years, pursuant to which the home6 owner— 

7 (A) grants an easement to such renewable 

8 energy system owner to install, maintain, use, 

9 and otherwise access the renewable energy sys10 tem; and 

11 (B) agrees to— 

12 (i) lease the use of such system from 

13 such renewable energy system owner; or 

14 (ii) purchase electric power from such 

15 renewable energy system owner. 

16 (3) RENEWABLE ENERGY MANUFACTURER.— 

17 The term ‘‘renewable energy manufacturer’’ means a 

18 manufacturer of renewable energy systems. 

19 (4) RENEWABLE ENERGY SYSTEM OWNER.— 

20 The term ‘‘renewable energy system owner’’ means 

21 a homebuilder, a manufacturer or installer of a re22 newable energy system, or any other person, as de23 termined by the Secretary. 


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1 (5) RENEWABLE ENERGY SYSTEM.—The term 

2 ‘‘renewable energy system’’ means a system of en3 ergy derived from— 

4 (A) a wind, solar (including photovoltaic 

5 and solar thermal), biomass (including bio6 diesel), or geothermal source; or 

7 (B) hydrogen derived from biomass or 

8 water using an energy source described in sub9 paragraph (A). 

10 (6) SECRETARY.—The term ‘‘Secretary’’ means 

11 the Secretary of Housing and Urban Development. 

12 (c) AUTHORITY.— 

13 (1) IN GENERAL.—The Secretary may, upon 

14 application by an authorized renewable energy sys15 tem owner, insure or make a commitment to insure 

16 a loan made by an authorized renewable energy 

17 lender to a renewable energy system owner to fi18 nance the acquisition of a renewable energy system 

19 for lease to a homeowner for use at the residence of 

20 such homeowner. 

21 (2) TERMS AND CONDITIONS.—The Secretary 

22 may prescribe such terms and conditions for insur23 ance under paragraph (1) as are consistent with the 

24 purposes of this section. 

25 (d) LIMITATION ON PRINCIPAL AMOUNT.— 


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1 (1) LIMITATION.—The principal amount of a 

2 loan insured under this section shall not exceed the 

3 residual value of the renewable energy system to be 

4 acquired with the loan. 

5 (2) RESIDUAL VALUE.—For purposes of this 

6 subsection— 

7 (A) the residual value of a renewable en8 ergy system is the fair market value of the fu9 ture revenue stream from the sale of the ex10 pected remaining electricity production from the 

11 system, pursuant to the easement granted in 

12 accordance with subsection (e); and 

13 (B) the fair market value of the future rev14 enue stream for each year of the remaining life 

15 of the renewable energy system shall be deter16 mined based on the net present value of the 

17 power output production warranty for such re18 newable energy system provided by the renew19 able energy manufacturer and the forecast of 

20 regional residential electricity prices made by 

21 the Energy Information Administration of the 

22 Department of Energy. 

23 (e) EASEMENT.—The Secretary may not insure a 

24 loan under this section unless the renewable energy system 

25 owner certifies, in accordance with such requirements as 


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1 the Secretary shall establish, consistent with the purposes 

2 of this section, that the systems financed will be leased 

3 only to homeowners that grant easements to install, main4 tain, use, and otherwise access the system that include the 

5 right to sell electricity produced during the life of the re6 newable energy system to a wholesale or retail electrical 

7 power grid. 

8 (f) DISCOUNT OR PREPAYMENT.—To encourage the 

9 use of renewable energy systems, the Secretary shall en10 sure that a discount given to a homeowner by a renewable 

11 energy system owner or other investor or prepayment of 

12 a renewable energy system lease by a renewable energy 

13 system owner does not adversely affect the mortgage re14 quirements of such homeowner. 

15 (g) ELIGIBILITY OF LENDERS.—The Secretary may 

16 not insure a loan under this section unless the lender mak17 ing the loan— 

18 (1) is an institution that— 

19 (A) qualifies as a green banking center 

20 under section 8(x) of the Federal Deposit In21 surance Act (12 U.S.C. 1818(x)) or section 

22 206(x) of the Federal Credit Union Act (12 

23 U.S.C. 1786(x)); or 

24 (B) meets such other requirements as the 

25 Secretary shall establish for participation of reVerDate Mar 15 2010 00:00 May 25, 2010 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S3402.IS S3402

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1 newable energy lenders in the program under 

2 this section; and 

3 (2) meets such qualifications as the Secretary 

4 shall establish for all lenders for participation in the 

5 program under this section. 

6 (h) CERTIFICATE OF INSURANCE.— 

7 (1) IN GENERAL.—The Secretary shall issue to 

8 a lender that is insured under this section a certifi9 cate that serves as evidence of insurance coverage 

10 under this section. 

11 (2) CONTENTS OF CERTIFICATE.—The certifi12 cate required under paragraph (1) shall set forth the 

13 fair market value of the future revenue stream for 

14 each year of the remaining life of the renewable en15 ergy system. 

16 (3) FULL FAITH AND CREDIT.—The certificate 

17 required under paragraph (1) shall be backed by the 

18 full faith and credit of the United States. 

19 (i) PAYMENT OF INSURANCE CLAIM.— 

20 (1) FILING OF CLAIM.—The Secretary shall 

21 provide for the filing of claims for insurance under 

22 this section and the payment of such claims. 

23 (2) PAYMENT OF CLAIM.—A claim under para24 graph (1) may be paid only upon a default under the 


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1 loan insured under this section and the assignment, 

2 transfer, and delivery to the Secretary of— 

3 (A) all rights and interests arising under 

4 the loan; and 

5 (B) all claims of the lender or the assigns 

6 of the lender against the borrower or others 

7 arising under the loan transaction. 

8 (3) LIEN.— 

9 (A) IN GENERAL.—Upon payment of a 

10 claim for insurance of a loan under this section, 

11 the Secretary shall hold a lien on the underlying 

12 renewable energy system assets and any associ13 ated revenue stream from the use of such sys14 tem, which shall be superior to all other liens 

15 on such assets. 

16 (B) RESIDUAL VALUE.—The residual value 

17 of such renewable energy system and the rev18 enue stream from the use of such system shall 

19 be not less than the unpaid balance of the loan 

20 amount covered by the certificate of insurance. 

21 (C) REVENUE FROM SALE.—The Secretary 

22 shall be entitled to any revenue generated by 

23 such renewable energy system from selling elec24 tricity to the grid when an insurance claim has 

25 been paid out. 


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1 (j) ASSIGNMENT AND TRANSFERABILITY OF INSUR2 ANCE.—A renewable energy system owner or an author3 ized renewable energy lender that is insured under this 

4 section may assign or transfer the insurance in whole or 

5 in part, to another owner or lender, subject to such re6 quirements as the Secretary may prescribe. 

7 (k) PREMIUMS AND CHARGES.— 

8 (1) INSURANCE PREMIUMS.— 

9 (A) IN GENERAL.—The Secretary shall fix 

10 and collect premiums for insurance of loans 

11 under this section, that shall be paid by the ap12 plicant renewable energy system owner at the 

13 time of issuance of the certificate of insurance 

14 to the lender and shall be adequate, in the de15 termination of the Secretary, to cover the ex16 penses and probable losses of administering the 

17 program under this section. 

18 (B) DEPOSIT OF PREMIUM.—The Sec19 retary shall deposit any premiums collected 

20 under this subsection in the Renewable Energy 

21 Lease Insurance Fund established under sub22 section (l). 

23 (2) PROHIBITION ON OTHER CHARGES.—Except 

24 as provided in paragraph (1), the Secretary may not 

25 assess any other fee (including a user fee), insurance 


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1 premium, or charge in connection with loan insur2 ance provided under this section. 

3 (l) RENEWABLE ENERGY LEASE INSURANCE

4 FUND.— 

5 (1) FUND ESTABLISHED.—There is established 

6 in the Treasury of the United States the Renewable 

7 Energy Lease Insurance Fund (referred to in this 

8 subsection as the ‘‘Fund’’), which shall be available 

9 to the Secretary without fiscal year limitation, for 

10 the purpose of providing insurance under this sec11 tion. 

12 (2) CREDITS.—The Fund shall be credited with 

13 any premiums collected under subsection (k)(1), any 

14 amounts collected by the Secretary under subsection 

15 (i)(3), and any associated interest or earnings. 

16 (3) AVAILABILITY.—Amounts in the Fund shall 

17 be available to the Secretary for fulfilling any obliga18 tions with respect to insurance for loans provided 

19 under this section and paying administrative ex20 penses in connection with this section. 

21 (4) EXCESS AMOUNTS.—The Secretary may in22 vest in obligations of the United States any amounts 

23 in the Fund determined by the Secretary to be in ex24 cess of amounts required at the time of such deter25 mination to carry out this section. 


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1 (m) REGULATIONS.— 

2 (1) IN GENERAL.—The Secretary shall issue 

3 such regulations as may be necessary to carry out 

4 this section. 

5 (2) TIMING.—Not later than 180 days after the 

6 date of enactment of this Act, the Secretary shall 

7 issue interim or final regulations. 

8 (n) INELIGIBILITY FOR PURCHASE BY FEDERAL FI9 NANCING BANK.—Notwithstanding any other provision of 

10 law, no debt obligation that is insured or committed to 

11 be insured by the Secretary under this section shall be 

12 subject to the Federal Financing Bank Act of 1973 (12 

13 U.S.C. 2281 et seq.). 

14 (o) TERMINATION OF AUTHORITY.—The authority of 

15 the Secretary to insure and make commitments to insure 

16 new loans under this Act shall terminate 10 years after 

17 the date of enactment of this Act. 

Æ 


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