14 California counties and 126 cities Sept. 20 launched the first state-wide and the nation’s largest PACE (Property Assessed Clean Energy) program. Aimed at reducing energy and water consumption on commercial properties, the California Statewide Communities Development Authority’s (CSCDA) CaliforniaFIRST program enables commercial property owners to raise capital for clean energy, energy efficiency, and water conservation projects.
California commercial property owners who qualify will be able to tap the municipal bond market to raise the capital necessary to carry projects through to fruition. The bonds will be repaid by levying a special assessment on participating commercial property owners’ annual property tax bills. Paying interest and repaying the principal of CaliforniaFIRST municipal bonds therefore won’t add to local governments’ debt or further strain their budgets, according to a CaliforniaFIRST press release.
PACE Programs: Financing Consumer Savings, Job Creation, and a Better Environment
Investing in clean energy, energy efficiency, and water conservation efforts holds huge potential benefits economically, socially, and environmentally. PACE programs are proving an effective means of financing them, CSCDA notes. Energy and water bill savings, local economic stimulus, job creation, reductions in greenhouse gas emissions, and more efficient use of increasingly precious and variable water resources are some of the prominent benefits being generated.
“Commercial PACE gives businesses a great option for pursuing energy efficiency projects that may have previously been out of reach,” said San Diego County Supervisor Dianne Jacob. “The County’s partnership with CaliforniaFIRST provides a mechanism for participants to start spending less money on energy bills and more back into the business.”
The success of Riverside County’s new HERO (Home Energy Renovation Opportunity) PACE program demonstrates the economic growth opportunity PACE programs can open up and the multiple benefits they afford. More than $45.5 million in clean energy financing for 1,500 residential projects has already been approved.
Unlocking Clean Energy, Energy Efficiency, & Water Efficiency’s Potential
Initial, up-front costs and the lack of attractive financing have been hurdles for commercial and residential property owners looking to save on expenses by installing solar energy systems or carrying out energy efficiency and water conservation upgrades, CSCDA continued. PACE programs such as CaliforniaFIRST unlock the potential for them to do so.
“Building owners are very interested in saving money and energy,” commented Johnson Controls’ vice president of Commercial Energy Solutions Beau Engman. “What has been lacking up until now was affordable upfront capital to do the work. We see PACE as a promising means of financing deep commercial energy efficiency upgrades.”
A variety of financial institutions are participating in CaliforniaFirst. They include traditional banks, such as Wells Fargo, as well as San Rafael-based Clean Fund, which has financed PACE projects in both California and Minnesota.
“PACE financing has the potential not only to save energy and money, but to create nearly 25,000 jobs in California,” commented Clean Fund CEO John Kinney. “Clean Fund is excited to work in partnership with local governments throughout the state to offer low-cost capital to help commercial property owners finance clean energy upgrades on their buildings.”
Renewable Funding is the CaliforniaFIRST PACE program administrator. The Oakland–based renewable energy finance company launched the nation’s first PACE program in Berkeley in 2008 and advises the US Dept. of Energy on commercial PACE financing. It also operates commercial PACE programs for local governments from San Francisco to Melbourne, Australia.
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