Legislation
will allow for municipalities to dramatically accelerate the energy
retrofitting of New York State's buildings and homes
ALBANY, N.Y., Nov. 17 /PRNewswire-USNewswire/ -- Last
evening the New York State legislature passed a bill that authorizes
municipalities to establish sustainable energy programs that will finance the
installation of renewable energy systems and energy efficiency improvements
across the state. These programs will make use of a new form of energy
finance, known as Property Assessed Clean Energy or
"PACE." PACE programs eliminate the upfront cost for
energy improvements by allowing property owners to pay for the improvements
over 15-20 years through an increase in their annual property taxes. PACE
programs are a recent innovation in finance and have emerged nationwide over
the past year during which time 15 states have passed enabling legislation.
"PACE finance can help accelerate deep building
retrofits in New York's dense cities, energy efficiency improvements in the
suburban housing stock and colder upstate climate, and both efficiency and
renewable energy power improvements across the commercial real estate
sector," said Jeffrey Tannenbaum, founder of PACENOW.org and on behalf of
the Fir Tree Philanthropies. He added, "New York now has a potential
financing structure that can help reduce energy bills, and carbon emissions while
creating long term job opportunities in the clean energy space."
Representative Steve Israel (NY 2nd District) stated,
"I am thankful that Governor Paterson and the State Legislature see the
potential for PACE programs in New York and I look forward to working with our
local communities to launch PACE bond pilot programs across New York."
Governor Paterson said, "Now, thanks to the leadership
of President Obama and Congressman Israel, the federal government is offering
programs that encourage the use of PACE loan programs ... I want to thank the
Legislature for recognizing this opportunity and for agreeing to pass this
critical legislation."
Ashok Gupta, Director of Energy Policy for the Natural
Resources Defense Council, stated, “PACE is a powerful tool for advancing
energy efficiency retrofits, creating badly needed jobs and reducing global
warming pollution. New York has taken an important first step on PACE and
we look forward to working with the Legislature and the Governor to quickly
expand the scope of this bill beyond PACE programs relying on federal
assistance.”
"New York State can now tap critical federal dollars to
create much-needed jobs with PACE programs," said Jack D. Hidary, Chairman
of Americans for Clean Energy and one of the leaders of the PACENOW coalition.
He added, "PACE will put more people to work and will bring energy
efficiency and solar to buildings across the state with loans that make it easy
for owners to pay for this cost-reducing work."
The PACENOW coalition includes the following leading
companies, foundations and governmental organizations: Alliance to Save
Energy; City of Annapolis, MD; Apollo Alliance; Association of Bay Area
Governments; City of Berkeley, CA; Bipartisan Policy Center; County of Boulder,
CO; California Energy Commission; Center for American Progress; Climate
Communities; Clinton Global Initiative; Fir Tree Philanthropies; Jack D. Hidary
Foundation; Johnson Controls Inc.; Jones Lang LaSalle: Living Cities; County of
Montgomery, MD; National Association of Real Estate Investment Trusts (NAREIT);
Natural Resources Defense Council; PACENOW.org; Polyiso Insulation
Manufacturers Association; Real Estate Roundtable; Renewable and Appropriate
Energy Laboratory; Renewable Funding LLC; Serrafix Corp; Solar Electric Industries
Association; County of San Diego, CA; City of San Jose, CA; City of Sonoma, CA;
Stewards for Affordable Housing for the Future; and the Vermont Energy
Investment Corp.
About PACENOW:
PACENOW.org is the advocacy and educational non-governmental
organization for PACE finance. For more information about PACE finance, please
visit www.PACENOW.org.
About The Fir Tree
Philanthropies:
The Fir Tree Philanthropies
("FTP") primary objective is to accelerate America's energy
independence and promote sustainable capitalism through innovations in public
policy, finance and entrepreneurship.
PACE FACT SHEET
History: The PACE finance industry began in California
in 2008 when state enabling legislation was passed allowing for municipalities
to create financing districts that could provide low cost retrofit capital to
homeowners and building owners secured by senior tax liens on their
property. PACE has the potential for large growth due to recently passed
similar enabling legislation in more than a dozen states. Current PACE
enabled states are: CA, CO, IL, LA, MD, NV, NM, NY, OH, OK, OR, TX, VT, VA, WI.
Property Assessed Clean Energy ("PACE") Finance
Defined: A PACE bond or lien is a debt instrument 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 15-20 years via an annual assessment on their property
tax bill. PACE bonds can be issued by municipal financing districts or finance
companies and the proceeds can be used to retrofit both commercial and
residential properties.
How it works: The key innovations of PACE
finance involve materially lengthening the repayment period for energy retrofit
loans and structuring the loan repayments as annual property tax
surcharges. These innovations result in large benefits to property owners
(positive cash flow in the first year on energy retrofits), municipalities (no
fiscal burden yet large job creation), existing mortgage holders (borrower cash
flow improves and the property value increases), and to PACE bond
holders/investors (virtually no risk on investment because the PACE lien is
senior in right to mortgage debt). Specific benefits are as follows:
PACE Fact Sheet
- Property owners benefit
from large cash savings as efficiency savings exceed the annual financing
cost:
Instead of large required upfront payments by property owners for energy
retrofits, the capital is lent to property owners and repaid over 15-20
years via an annual property tax surcharge. This long term repayment
mechanism results in annual energy savings that greatly exceed the annual
property tax cost, making PACE finance highly attractive to home and
building owners.
- States/Municipalities
create jobs and have no added credit risk: States and
municipalities benefit from immediate job creation and the fact that PACE
finance creates no credit or fiscal burden as the entire liability resides
directly with those property owners who opt in to receiving PACE
loans.
- Appeal to existing
mortgage holders:
PACE finance improves the cash flow of property owners (annual energy
savings > annual tax surcharge cost) and increases the property's
overall value all of which increase the creditworthiness of the existing
mortgage
- PACE bond
holders/investors benefit from a highly secure investment: PACE bonds have
strong appeal to investors given that they are secured by long term tax
liens that are senior in right to mortgage debt.
CONTACT: Sandi McLaughlin, PACENOW.org,
+1-212-659-4917, info@pacenow.org
