In another indication of its popularity; the New York legislature just voted an astounding 192-0 to offer municipal financing for clean energy improvements on homes and businesses through Property Assessed Clean Energy or PACE programs, backed by Federal bonds.
Just in time to apply to the Department of Energy by tomorrow’s deadline. New York State will be joining with many other cities and states with a total of $80 million in requests for the popular and cost-effective green job stimulus funding.
It is a win-win financial tool, both for cities or states and for local businesses and homeowners. The bond-backed PACE model doesn’t impact the operating money of cities and states. Municipalities are familiar with this kind of municipal project finance structure, so it is not difficult to expand it rapidly.
Cities offer low-interest bonds to property owners who use the bond money to pay upfront for renewable energy and energy efficiency improvements and pay the loan back through a voluntary long-term assessment on their property taxes.
The funds go to solar or other renewable energy jobs locally, helping local economies fast. For homeowners, it is the first truly free option for transitioning to renewable energy. It cuts utility bills immediately, yet requires neither an upfront payment nor an ability to qualify for credit.
It is a zero risk bond: even if a homeowner defaults: the new owner takes over the payments, and in return, has comparable reductions in utility bills. Likewise, when the property sells (within the up-to 20 year payment period), it is more attractive to a prospective buyer because the higher assessed tax payments are more than balanced by much lower or even zero utility bills.
The homeowner can choose to merely reduce their energy bills or eliminate them entirely. With no need to go through the traditional loan process; PACE programs really do bring power to the people.
Homeowners can reduce utility bills with renewable energy or efficiency as with a ground heat exchange and more efficient windows and insulation.
Or they can choose to eliminate utility bills entirely, by putting in a solar array or micro-hydro or (if rural) a wind turbine that will reduce their energy bills up to 100%. Whatever level they go to tends to have corresponding reductions in utility bills that pay back the investment immediately.
It might even be the fastest way to get our national carbon emissions down. California’s Sonoma County which offered PACE starting in March in California recently reached an astounding 4% of power on the grid coming just from rooftop solar alone.
Image: Margi Levin
Source: Renewable Energy World