Financing Policy Webinar with Congressman Israel and Matthew Brown - Congressman Israel

Alliance to Save Energy Webinar
November 19, 2009
Congressman Steve Israel

Commercial and residential buildings are responsible for 40 percent of all greenhouse gas emissions annually in the U.S.
Nationally, about 75 percent of commercial buildings are more than 20 years old.
Retrofitting the nation's aging building stock would drastically reduce the carbon impact. The total potential market for major green renovations in the commercial building sector alone is approximately $400 billion.
Energy Retrofits on existing buildings have been slow due to high upfront capital costs and a lack of financing options that do not provide a sufficient and timely “ return on investment ” for property owners.
A recent McKinsey & Company report on energy efficiency found that the United States could save $1.2 trillion through 2020, by investing $520 billion in improvements like sealing leaky building ducts and replacing inefficient household appliances with new, energy-saving models.

RETURN
ON
INVESTMENT
The 3 Missing Words in US Energy Policy:

Property Assessed Clean Energy (PACE) Bonds incentivize private property owners with a more desirable return on investment .
PACE enabling legislation varying in size and usefulness has been passed in 15 states across the country with California having the most expansive program.
The estimated potential for PACE bonds could exceed $500 billion.

PACE bonds can be issued by municipal financing districts or finance companies.
A PACE bond’s proceeds are lent to commercial and residential property owners on a voluntary basis to finance energy retrofits (efficiency measures and small renewable energy systems).
Repayment of the loan is over 20 years via an annual assessment on the owner’s property tax bill.
Lien is attached to and transfers with the property – not the property owner.

PACE bonds gives municipalities the tools they need to spur private sector investment in improving energy efficiency benefitting the municipality by:
Immediate job creation
Attracts new clean energy companies to the area
No credit or general obligation risk
Obligation is liability of real estate owner
Greenhouse gas reductions/energy independence
Opt in: Only those real estate owners who opt in pay for it

PACE Bonds dramatically improve the economics of energy retrofits (efficiency measures and micro renewable energy)
20-year repayment
Tax-deductibility
Lien assessed to property – not individual
Convenient lending option for consumers
Result is a higher return on investment

The Department of Energy has authorized more than $450 million in Recovery Act funding for PACE pilot projects nationwide to develop best practices for PACE.
On December 14 th , applications are due to the Department of Energy. Municipalities are eligible for up to $75 million in Recovery Act funding for these demonstration projects around the country.

Nationally:
Department of Energy loan guarantees for PACE will bring down PACE interest rates and costs for property owners:
Language inserted by Congressman Israel in the Climate Change Bill (ACES) that passed the House, but bill has stalled in senate.
Congressman Israel introduced a stand alone bill, H.R. 3836 in October as well.

New York State:
This week both chambers of the New York State Legislature passed PACE enabling legislation in Albany, NY.
A NYS pilot project is being designed to offer lower interest rates and reduce upfront costs to demonstrate return on investment for property owners and position NYS on the forefront of energy retrofitting.

QUESTIONS?

Financing Policy Webinar with Congressman Israel and Matthew Brown - Congressman Israel

by Alliance To Save Energy on Nov 19, 2009

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Financing Policy Webinar with Congressman Israel and Matthew Brown - Congressman Israel Presentation Transcript