Property Assessed Clean Energy is gaining traction throughout the country, including here in Washington, D.C. There is now even a website devoted to gathering information about all of these programs. According to this site, a "PACE bond is a bond where the proceeds are lent to commercial and residential property owners to finance energy retrofits (efficiency measures and small renewable energy systems) and who then repay their loans over 20 years via an annual assessment on their property tax bill." Berkeley issued the first bond in January 2009. According to the Center for Resource Solutions, 16 states and 300 cities across the country will have enacted PACE legislation by the end of this year.
Now PACE is coming to Washington, D.C. In December announced that it submitted an application to the federal Department of Energy's Community Block Grant Retrofit Ramp-up Program for a competitive grant "to encourage homeowners and commercial property owners to make improvements such as replacing windows, upgrading heating and cooling systems and installing solar panels in order to cut annual energy costs by at least 25 percent." Then this week, according to the report in our local newspaper, the Northwest Current, the Washington, D.C. city council unanimously approved an emergency bill authorizing a PACE bond issue. According to the article,
Under the proposal, a pot of seed money - whether a privately financed or provided by a hoped-for federal grant - would form the National Capital Energy Fund. That fund would then hand out low-interest loans to private commercial and residential property owners. Over the next 10 to 20 years, property owners would repay those loans, through a special assessment on their property taxes, into the new Special Energy Assessment Fund. As the loan fund dwindles, the city would issue bonds to replenish it. It would also make further loans from the assessment fund, which would furnish payments for the bond trustees as well.
According to Green Tech Media, PACE programs may readily complement other financing mechanisms such as solar leasing. Green Tech interviewed SunRun, which offers power purchase agreements.
"What we've noticed is that there is a nice complement between what we're doing and the PACE program," said [SunRun's representative]. She added that the PACE program can address energy efficiency issues like insulation and water, while the SunRun PPA can get PV panels on the roof.
Green Tech Media indicated that "the PACE program allows customer ownership of the solar system. And ownership means responsibility for monitoring the installation and replacing broken parts and failed inverters. On the other hand, the SunRun PPA model provides an 18- to 20-year warranty and handles all replacement issues." New and innovative solutions to the huge upfront costs for the homeowner to purchase solar panels are a welcome development to jumpstart the solar market.
Tags: Berkeley Program, PACE, Property Assessed Clean Energy, PACE bond, solar power purchase agreements, solar leasing programs, financing for solar projects