The Town of Babylon, on Long Island, New York, has been one of the nation’s most progressive communities when it comes to energy efficiency initiatives.

In 2009 it launched a program, called Long Island Green Homes, that offered municipal loans of as much as $12,000 for qualified retrofits, with the debt paid down with the savings in energy cost. And last year, Babylon raised a ruckus over Fannie Mae and Freddie Mac’s declaration that the companies would no longer guarantee mortgages for properties that also had liens linked to the town’s Property Assessed Clean Energy program, which was designed provide homeowners municipal financing for energy efficiency improvements.

A boost for local remodelers

This week, Babylon announced that it is continuing down the green path – arm in arm with the nearby town of Southampton, in this case – by participating in a pilot program called Remodel with Energy Star, a variation on an existing Energy Star-based home performance initiative managed locally by Long Island Power Authority (LIPA). The utility and the two towns say that each participating home will receive a Home Energy Score (based on a Department of Energy scoring system designed to allow homeowners to compare their home’s energy consumption with that of other homes), and that qualifying remodeling projects will be eligible for rebates of as much as $5,000. Participating remodelers, meanwhile, will receive $500 per qualifying project.

The remodelers will use state-of-the-art equipment and building techniques to ensure that the home improvement project conforms to Home Performance with Energy Star energy efficiency guidelines established by the Environmental Protection Agency and the DOE, according to a press release on the initiative. LIPA says it is among the first utilities in the nation to partner with Energy Star on a program designed specifically for remodeling or expanding homes.

A town supervisor in Babylon, Steve Bellone, also announced that the town has created a special system for expediting permits for Remodeling with Energy Star projects, and that 100% of the permit fees will be rebated for conforming projects.

A basic goal of Remodel with Energy Star is to encourage participants to remodel and/or increase square footage without increasing energy demand. In addition to the rebate from LIPA of as much as $5,000, a $700 rebate is available for projects that include installations of qualifying air-conditioning units. The program has an enrollment capacity of 100 homes and is expected to run until the end of 2011.