COUNTY ON PACE: Energy Efficiency Financing Eased Under New Program
February 23, 2014
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While most of the attention at the last meeting of the Bay County Commission was focused on a civil rights issue, a vital development program was adopted on a 7-0 vote.
The county has joined the fast-growing Lean and Green Michigan movement for a Property Assessed Clean Energy (PACE) district that will assist business owners in financing energy efficiency improvements on their properties.
The resolution adopted Feb. 11 states: "PACE stimulates economic development, improves property values, reduces energy costs, reduces greenhouse gas emissions and increases employment in the county."
Lean & Green Michigan is structured to allow every municipality to join after holding a public hearing and passing a resolution of intent and adoption.
Besides Bay, Huron, Ingham, Macomb, Saginaw, and Wayne Counties and the Cities of Rochester Hills and Southfield have all joined the program.
So far nearly $52 million worth of sustainable upgrades to commercial buildings have been funded with PACE.
"PACE represents the rare public policy where everyone wins," said County Executive Thomas L. Hickner. "Property owners can save energy and money with upgrades that are cash-flow positive immediately.
"PACE projects will create additional activity for local companies, thus enabling more jobs for our citizens.
"Also, the county will enjoy a better business climate, enhance commercial and industrial building stock, and reduce carbon output."
State law allows local units of government to enter into agreements to create PACE programs. Under this innovative arrangement, commercial and industrial property owners can take on voluntary special assessments to finance improvements or construction to reduce energy or water use or generate renewable energy.
PACE allows companies the opportunity to maintain a positive cash flow while investing energy upgrades, at no cost to taxpayers.
Because the financing is secured by the County's property tax authority, leaders provide finance terms up to 20 years, which transforms many energy efficiency and renewable energy projects that are otherwise prohibitively expensive into a no-money-down, cash flow positive proposition. In this long term financing, the property pays a higher interest, but saves through lower energy bills than what is being spent on project payments throughout the loan period.
"The importance of Bay County joining the program cannot be overstated,? said Andy Levin, who administers the program. "This vote means that all business property owners throughout the county can apply for long-term financing that makes energy efficiency, water efficiency and renewable energy improvement cost effective."
Lean & Green Michigan is a statewide PACE clean energy finance market that all counties and cities may join free of charge. Once a local government joins, the market is available to all business and private non-profit property owners across the full range of industries: office buildings, warehouses, manufacturers, apartment complexes, hospitals, private schools and universities, and more.
Lean & Green Michigan is an open-market PACE system emphasizing owner-arranged financing. Lean & Green will match property owners, energy contractors, and lenders. The program usually facilitates 100 percent project financing on a cash-flow positive basis.
Michigan's PACE statute requires an energy audit, the particulars of which are determined on a case by case basis. The statute also requires lender consent. Lean & Green Michigan expects to announce its first PACE deal closing in the first quarter of 2014.
PACENow is a non-profit foundation funded advocate for Property Assessed Clean Energy (PACE) financing. PACENow's mission is to promote improved energy efficiency in buildings and use of PACE. Our strategy is to be a trusted source for information and resources to a growing coalition of PACE stakeholders that includes local governments, businesses, industry service providers, labor and trade organizations, environmental groups and private individuals nationwide.
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