Missouri Association of Counties PACE Article
Missouri Association of Counties PACE Article
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Missouri Municipal League PACE Article
Missouri Municipal Review Pace Article
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President Clinton announced his commitment to a national PACE finance program as part of the Clinton Global Initiative. Property Assessed Clean Energy, known as "PACE" finance, is an innovative municipal finance program that has the potential to fund the energy retrofit of America's homes and buildings. The PACENOW coalition, established this year to promote these programs, also announced its Clinton Global commitment to launch PACE finance on a national scale, starting with securing the support for accelerated PACE program adoption by 50 mayors and 50 municipalities.
"PACE bonds can provide enormous amounts of much needed low cost capital to retrofit America's towns and cities all while creating local jobs," said Jeffrey Tannenbaum, founder of PACENOW.org. He added, "PACE finance has strong bipartisan support as it provides large benefits to property owners, existing mortgage lenders, municipalities, and our nation without burdening our nation's taxpayers."
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Center for American Progress on PACE
Bracken Hendricks discusses PACE financing, an innovative tool for financing the investments we need to make to improve the energy efficiency of our homes and offices.
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PACE Finance: Innovative Funding to Accelerate the Retrofitting of America's Buildings for Energy Independence
Milken Institute Global Conference -- PACE Panel
Commercial and residential buildings are responsible for 40 percent of all greenhouse gas emissions annually in the U.S. Retrofitting the nation's aging building stock would drastically reduce the carbon impact, and now there's a tool to help make it happen.
The recent emergence of Property Assessed Clean Energy, or PACE, bonds has given cities and states the tools to lead the charge for improving energy efficiency. In the PACE framework, cities and counties form financing districts that could issue bonds to provide financing for residential and commercial property owners to voluntarily retrofit buildings and make improvements such as installing solar, wind or geothermal energy systems.
Property owners would repay the loans over 20 years through a special property assessment, with the paper secured by a super-senior position, much like any property tax. Up-front costs for owners are dramatically reduced, which improves return on investment and the internal rate of return and doesn't discourage them from opting in.
Dan Probst of Jones Lang LaSalle estimates that the potential market size for retrofitting buildings is anywhere from $600 billion to more than $1 trillion. About 75 percent of commercial buildings are more than 20 years old.
Challenges to embracing PACE bonds exist on financing and legal fronts. For financing, the question relates to how you enable these relatively small-scale financings that have local, non-standardized appearances to work within the large-scale municipal bond market.
Craig Hill of Northcross, Hill & Ach Inc. said a Department of Energy guarantee would enable a standardized, marketable product. The DOE guarantee would provide a Treasury bond surrogate with related liquidity and an interest-rate reference. It also would serve as a powerful catalyst for retrofitting with virtually no long-term credit risk –the bond has a lien not only on the revenue stream of the property but also on the property itself. Amory Lovins of the Rocky Mountain Institute said the DOE credit wrap would help provide the protocol for pooling, packaging and securitizing the savings from these retrofits.
Regarding the legal challenges to PACE financing, the panel was slightly less certain, given the infancy of the initiative. Hill mentioned that trying to move the retrofit lien ahead of the mortgage note in seniority can be difficult to do unilaterally. Cisco DeVries of Renewable Funding LLC said it depends on whether you set up the assessment district in a traditional manner. Then, DeVries said, it's "just like any other tax assessment," which frequently moves super-senior without the lender's consent.
Lovins likened the retrofits using PACE bonds to a "double whammy" because they increase the cash flows of the asset, leading to lower loss reserves because risk decreases, and increase the asset's value. The bonds have a lien on both. Because the program is opt-in and needs pull-through to make an impact, the key is for cities and counties to educate property owners and help implement retrofits. The policy goal should be for a transparent, easy-to-use, standardized and correctly incentivized process for retrofitting, using PACE financing with reliable, certified vendors doing the retrofitting.
When pressed further about lenders and their appetite to embrace the super-senior position of PACE bonds, Lovins compared it to health insurance. Would a health insurance company want to encourage its enrollees to exercise and eat right? "They should!" he said.
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October 19, 2009
Vice President Biden Unveils Report Focused on Expanding Green Jobs And Energy Savings For Middle Class Families
WASHINGTON, D.C. - Vice President Biden today unveiled Recovery Through Retrofit, a report that builds on the foundation laid in the Recovery Act to expand green job opportunities and boost energy savings by making homes more energy efficient. Joining the Vice President today were Nancy Sutley, Chair of the White House Council on Environmental Quality; Steven Chu, Secretary of Energy; Hilda Solis, Secretary of Labor; Shaun Donovan, Secretary of Housing and Urban Development; and Karen Mills, Administrator of the Small Business Administration.
At a Middle Class Task Force meeting earlier this year, the Vice President asked the White House Council on Environmental Quality (CEQ) to develop a proposal for Federal action to lay the groundwork for a self-sustaining home energy efficiency retrofit industry. In response, CEQ facilitated a broad interagency process with the Office of the Vice President, eleven Departments and Agencies and six White House Offices to develop recommendations for how to use existing authority and funding to accomplish this goal. These recommendations are described in detail in the Recovery Through Retrofit Report.
"Recovery Through Retrofit is a blueprint that will create good green jobs - jobs that can't be outsourced, and jobs that will be the cornerstones of a 21st-Century economy," said Vice President Biden.
"And, thanks to the Recovery Act's unprecedented investments in energy efficiency, we are making it easier for American families to retrofit their homes - helping them save money while reducing carbon emissions and creating a healthier environment for our families."
"This report builds on the foundation laid in the Recovery Act to expand green job and business opportunities for the middle class while ensuring that the energy efficiency market will thrive for years to come," said Nancy Sutley, Chair of the White House Council on Environmental Quality.
"An aggressive program to retrofit American homes and businesses will create more work, more savings, and better health for middle class Americans."
Recovery Through Retrofit Report
