Do you remember Property Assessed Clean Energy (PACE) bonds? If you recall, in a June 2009 post, I proclaimed my undying affection for PACE bonds, which can serve as a financing mechanism to retrofit homes and buildings:
“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 hope was that jurisdictions across the country would use PACE bonds to finance retrofits of homes and buildings. Turns out, PACE bonds have been proposed in my own backyard.
In December 2009, District of Columbia Mayor Adrian Fenty announced his “administration is preparing an application for a federal grant to create a $35 million revolving fund that would make loans to District homeowners and commercial property owners for energy efficiency improvements.”
There are two basic steps to establish a PACE bond program. First, a state must pass enabling legislation. Second, the state must secure seed money for the revolving fund that will finance the PACE bonds. The D.C. government is proceeding forward with both steps:
“[T]he Council of the District of Columbia is expected to take up legislation that would create not only an administrative mechanism for running the program, but would create a ‘property assessed clean energy’ (PACE) bond program, that will ensure sustainable funding for this initiative in coming years. The legislation would allow the District to issue a series of conduit bonds up to $250 million. The federal funds would initially seed the fund and future bond sales would be backed by future tax collections.
The average age of a building in the District is about 72 years old, or about 30 years older than the national average. Given the age of the city’s building stock, officials see a greater need for energy efficiency retrofits and program managers expect the property owners could collectively save about $10 million in utility costs during the program’s first three years.”
As an owner of a hundred-year-old row house, I am looking forward to the opportunity to apply for a PACE bond.
What do you think of this program?
A Green Building Breakup (GBLU)