Property-Assessed Clean Energy (PACE) Financing of Renewables and Efficiency PDF Download

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Languages : en
Pages : 4

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Under property-assessed clean energy (PACE) and similar programs, municipal financing districts lend the proceeds of bonds to property owners for financing energy retrofits. Property owners who invest in energy efficiency (EE) measures and small renewable energy (RE) systems then repay these loans over 15-20 years via annual assessments on their property tax bills. States and local governments can use PACE bonds to help property owners finance EE and RE projects. This factsheet outlines the benefits of PACE programs and describes how they can be designed, implemented, and funded. The factsheet also summarizes the benefits and challenges experienced by PACE programs in Boulder County, Colorado; Annapolis, Maryland; Berkeley, California; Sonoma County, California; Palm Desert, California; and Babylon, New York.

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Category : Energy conservation
Languages : en
Pages : 4

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Languages : en
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A significant barrier to investing in renewable energy and comprehensive energy efficiency improvements to homes across the country is the initial capital cost. Property Assessed Clean Energy (PACE) financing is one of several new financial models broadening access to clean energy by addressing this upfront cost issue. Recently, the White House cited PACE programs as an important element of its 'Recovery through Retrofit' plan. The residential PACE model involves the creation of a special clean energy financing district that homeowners elect to opt into. Once opted in, the local government (usually at the city or county level) finances the upfront investment of the renewable energy installation and/or energy efficiency improvements. A special lien is attached to the property and the assessment is paid back as a line item on the property tax bill. As of April 2010, 17 states have passed legislation to allow their local governments to create PACE programs, two already have the authority to set up PACE programs, and over 10 additional states are actively developing enabling legislation. This policy brief analyzes one of the advantages of PACE, which is the transferability of the special assessment from one homeowner to the next when the home is sold. This analysis focuses on the potential for the outstanding lien to impact the sales negotiation process, rather than the legal nature of the lien transfer itself. The goal of this paper is to consider what implications a PACE lien may have on the home sales negotiation process so that it can be addressed upfront rather than risk a future backlash to PACE programs. If PACE programs do expand at a rapid rate, the chances are high that there will be other cases where prospective buyers uses PACE liens to negotiate lower home prices or require repayment of the lien as a condition of sale. As a result, PACE programs should highlight this issue as a potential risk factor for the sake of full disclosure. A good example of this is in Boulder County where the following statement is included in the ClimateSmart PACE program materials: 'Please Note: There is no legal requirement that the loan be paid off when you refinance or sell your home. However, this may be an item subject to negotiation with a future buyer and may also be a matter of negotiation with the mortgage lender.' Such candid disclosure for what might be a low risk event can be debated. However, a selling point of PACE programs is the transferability of the lien to the new homeowner. To the degree this benefit is questioned, PACE programs may end up looking more like home equity loan financing, with the associated debt repaid at closing, rather than property-based financing that remains with the improved home. While it is possible that upfront disclosure might negatively impact participation rates in PACE programs, it also will protect the integrity of a PACE program in later years if such situations come to pass. Ideally, this will become less of an issue over time as more homebuyers understand the positive economic and societal benefits of owning a home with clean energy features.

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Languages : en
Pages : 6

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Congress should enact legislation that supports residential property assessed clean energy (PACE) programs in the nation's states and metropolitan areas. Such legislation should require the Federal Housing Finance Agency (FHFA) to allow Fannie Mae and Freddie Mac to purchase residential mortgages with PACE assessments while at the same time providing responsible underwriting standards and a set of benchmarks for residential PACE assessments in order to minimize financial risks to mortgage holders. Congressional support of residential PACE financing will improve energy efficiency, encourage job creation, and foster economic growth in the nation's state and metropolitan areas.

Author: Prentiss Cox
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Languages : en
Pages : 0

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Property Assessed Clean Energy (“PACE”) is a method of public financing for energy improvements through special assessments on local government property taxes. Interest in PACE exploded from its origination in 2008, with almost half the states rapidly enacted legislation enabling local governments to use their property collection power for this purpose. The growth in PACE is now suspended, and existing programs have been put on hold, in the face of opposition from the federal secondary mortgage market regulators. Governments and environmental advocates supporting PACE have initiated litigation against the federal regulators and are seeking passage of federal legislation to revive the programs. This Article argues that the theory underlying PACE is fundamentally flawed. PACE has been promoted as an alternative to traditional real estate financing that resolves the impediments to homeowners investing in alternative energy and energy efficiency. A careful analysis of these claims demonstrates that PACE in actual practice will operate similarly to most other types of real estate financing, and that the efforts to reconstruct PACE programs through litigation or legislation are misplaced. Instead, PACE programs should be radically restructured or should be considered a creative yet failed experiment offering valuable lessons for future residential energy investment programs.

Author: Jacquelyn MacKenzie Dadakis
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Languages : en
Pages : 118

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This thesis describes the potential of new legislation in Louisiana to provide municipal financing for energy efficient building retrofits and distributed renewable energy. First, the thesis identifies how energy efficiency loan funds should be structured so as to access public debt markets. Second, it reviews current best practices in the field of Property Assessed Clean Energy (PACE) bonds. Then it discusses the current energy efficiency and renewable energy market in New Orleans, LA. Finally, the thesis discusses the policy and market changes necessary to implement LA Senate Bill 224 authorizing PACE districts in Louisiana.

Author: Routledge
Publisher: Routledge
ISBN: 1136183426
Category : Technology & Engineering
Languages : en
Pages : 202

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Business Models for Renewable Energy in the Built Environment provides insight to policy makers and market actors as to the ways that new and innovative business models (and/or policy measures) can stimulate the deployment of renewable energy technologies (RET) and energy efficiency (EE) measures in this field. This project was initiated and funded by the IEA Implementing Agreement for Renewable Energy Technology Deployment (IEA-RETD). It analyses ten business models in three categories, covering different types of energy service companies (ESCO’s). Included developing properties certified with a ‘green’ building label building owners profiting from rent increases after EE measures property Assessed Clean Energy (PACE) financing on-bill financing leasing of RET equipment. Coverage extends to the organisational and financial structure of the models and the existing market and policy context, plus analysis of Strengths, Weaknesses, Opportunities and Threats (SWOT). The book concludes with recommendations for policy makers and other market actors on how to encourage and accelerate built environment renewable energy technologies.

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Languages : en
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Author: Marshall R. Goldberg
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Category : Energy policy
Languages : en
Pages : 39

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This report examines the economic impacts (including job creation) from the Boulder County, Colorado, ClimateSmart Loan Program (CSLP), an example of Property-Assessed Clean Energy (PACE) financing. The CSLP was the first test of PACE financing on a multi-jurisdictional level (involving individual cities as well as the county government). It was also the first PACE program to comprehensively address energy efficiency measures and renewable energy, and it was the first funded by a public offering of both taxable and tax-exempt bonds. The first phase of the residential CSLP financed about $9.8 million in residential energy retrofits, most of which were completed in 2009. This report focuses on 598 project invoices and $9.0 million in project spending. The report provides a program overview and economic impact analysis of program spending and energy savings using an input-output (I-O) model. The report also provides a qualitative assessment of factors that affected the resulting economic impacts, and profiles some program participants and contractors. The analysis focuses on Boulder County benefits but also includes an assessment of associated statewide economic benefits.