A Green Building Breakup
Dear Feebate,
I'm sorry to be writing this. First, I have to say, it's not you, it's me. You have done nothing wrong.
I remember when we met back at Greenbuild '08. The Portland officials were very eager to show you off and I fell for you hard. You were everything I dreamed of in a green building regulation. You weren't quite a mandate, but you strongly encouraged green building certification. Projects that did not achieve LEED certification were penalized; projects that achieved LEED Gold or Platinum certification received a reward.
It has been a long distance relationship and my eye has wandered. I have become increasingly focused on retrofits to existing buildings. How are we going to improve the energy efficiency of existing building stock? You always refused to answer this question when I asked.
Then, she appeared. PACE.
PACE bonds - Property Assessed Clean Energy bonds. PACE bonds are just so beautiful to me. What is a PACE bond you ask?
PACE is a bond where the proceeds are lent to commercial and residential property owners to finance energy retrofits (efficiency measures and small renewable energy systems). OWNERS then repay their loans over 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.
My dear Feebate, PACE bonds are everything you are not. PACE bonds focus strictly on creating a market for energy efficiency retrofits or renewable energy. PACE bonds are not mandates; instead, individuals must willingly agree to opt in. PACE bonds can be set up by private companies or government entities. The best part, though, is that a PACE bond can turn into a revolving fund that creates even more retrofits.
So Feebate, thanks for everything. It's been a nice ride and I wish you luck.
Best Wishes,
Green Building Law Update
In theory these PACE bonds sound great. As you know the proof is in the pudding. Which municipalities have implemented these? I'd like to know more about where they are in use and how they have performed. Case study follow up post perhaps in the offing?
Paul - I will absolutely follow up on the PACE bonds. Programs utilizing this funding option (Berkley, Annapolis) are in their infancy and I will definitely be keeping tabs and reporting back. There are many cities that will be implementing PACE-like programs with stimulus funds. I am extremely excited to see how this develops. Thanks for reading!
Chris
Paul:
If you can forgive the 1993-style HTML of this website, you'll find a trove of good information.
http://pacenow.org/
There was a presentation about these bonds at the Milken Global Conference in April that discussed how some municipalities are integrating this as a senior lien co-equal in priority to real estate tax. (http://www.milkeninstitute.org/events/gcprogram.taf?function=detail&eventid=GC09&EvID=1573)
I believe there are similar components in the NYC green building revisions currently under review by the City Council.