Page 70 - North American Clean Energy January February 2014

investing in clean energy

Keeping PACE with Texas

Financing opens commercial & industrial renewable markets

Ann Drumm & Matthew A Thompson, PhD

AS A RENEWABLE ENERGY PROVIDER, Texas is currently a really good state to be working
KPT’s goal is to provide turnkey
Beyond Texas
in. hose based in the area can expect to expand their business starting in 2014, with the recommendations that include the best
Although the Property Assessed Clean state’s authorization of an innovative inancing mechanism for projects on commercial and of existing programs, while learning the
industrial buildings.
lessons from implementation in other
Energy (PACE) Act is currently making a big
difference in Texas, PACE programs have In June of 2013, Governor Rick Perry signed S.B. 385, the revision to the Property states. Standardizing the rules and
been used to inance signiicant renewable Assessed Clean Energy (PACE) Act, immediately authorizing the establishment of PACE procedures that govern applications will
programs in communities throughout Texas. PACE gives commercial and industrial facilitate rapid approval of applications
energy projects in other states, too.
building owners low-interest, long-term inancing for renewable energy installations, so that owners, contractors, and
Introduced in pilot programs back in 2008,
as well as energy and water eiciency projects on existing structures. Overall, this communities can quickly realize the
PACE made immediate sense to energy government/community initiative helps create permanent private sector jobs, beneits of renewable energy projects.
eficiency advocates across the country, strengthening national and local economies, while promoting renewable energy.
Programs created with the PACE in a
And, the potential market in Texas is massive. he state currently leads the nation in Box toolkit will be easy for governments
and today, 31 states and the District of
Columbia have adopted (or already had) energy consumption, accounting for 12% of the country’s energy use, with industrial and to administer and user-friendly for
legislation that enables local governments commercial sectors constituting 62.6% of that consumption (source: www.eia.gov).
property owners and contractors. Critical
PACENow, a non-proit organization that tracks the progress of PACE legislation and elements will be standardized, including:
to offer PACE beneits to building owners.
projects around the United States, reports that renewable energy projects constituted 46% • Underwriting standards;
Some recent examples of where PACE is
of commercial PACE investments nationwide since 2008, and mixed projects that combine • Minimum project qualiications;
making a difference include:
renewable energy and eiciency have constituted an additional 23%. Another non-proit, • Energy audit documentation standards;
Keeping PACE in Texas (KPT), is a non-partisan association that has organized businesses, • Energy and water savings measurement,
• A 200-kilowatt (kW) rooftop solar array
on the Pier 1 building in San Francisco, commercial trade associations, non-governmental agencies, and other stakeholders to as well as veriication;
with a projected annual PV production of advocate for the Act.
• hird-party review of engineering; and
“It’s is a win-win-win-win solution for renewable energy providers, property owners, • Requirements for PACE contracting/
245,520 kilowatt-hours (kWh);
lenders, and communities,” explains Tim Arndt, a KPT volunteer. “PACE is a market-based bonding.

• A 37 kW solar array on a Washington, DC, inancing tool that eliminates the typical barriers for stakeholders, so that renewable
multi-family property; and
energy and eiciency projects can get done.”
Why Texas
he PACE Act passed the Texas Legislature
• A 35.5 kW solar array on a union building Removing risks & barriers
with bipartisan support due to concern
in Los Angeles County, which produces
PACE eliminates the barrier of access to capital by allowing 100% of the project costs about the limited supply of energy
80% of the building’s electricity use— (including materials, labor, and fees) to be inanced for up to 20 years. he property
and water resources in a time of rapid
reducing the monthly electric bill from owner enters the property into a voluntary contractual arrangement with the local taxing population growth. Contractors, who
$2,500 to $10.
authority, which services the debt through a property assessment. he debt is, then, typically generate interest and drive

Visit www.pacenow.com to track PACE secured by a special assessment lien that runs with the land, which eliminates concerns for PACE applications, are inding allies in
legislation.
property owners who purchase property as a short-term investment.
property owners as they become aware of
Additionally, the beneits of the project are passed along to subsequent property owners. the potential savings in eiciency and the
Although the consent of existing lien holders is required, projects are designed to create security of distributed generation.

net positive cash low from energy/water savings, which minimizes the repayment risks.
Contractors who stay informed about PACE will be best positioned to help their
PACE eliminates other major barriers for property owners, as well. he owner/tenant customers apply for the program as soon as it is implemented in the communities where
split incentive is solved by qualifying the PACE assessment as a pass-through cost to they operate.
tenants. Any concern about return-on-investment is addressed by requiring a third-party

engineer review to verify that the energy and water savings will be achieved as projected.
To stay on top of developments through the Keeping PACE in Texas website, visit
he legislation authorizes municipalities and counties to create local PACE regions, and www.keepingpaceintexas.org
begin implementing inancing programs for commercial and industrial properties, as well
as residential properties with ive or more dwelling units. KPT is even preparing a PACE in Ann Drumm is a Keeping PACE in Texas Volunteer; Matthew A hompson, PhD, is the executive

a Box toolkit, which will be available to local governments in early 2014, to enable quick director of Principal Solar Institute.
implementation and consistency across jurisdictions.
Principal Solar | www.principalsolar.com

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