PACE Update - Vote Solar Webinar 10.14.15

1.
A
Update
on
PACE
Financing
Programs
Vote
Solar
October
14,
2015

2. PACENOW

3. PACENOW
More
is
beAer
ü 501(c)3
Not-­‐for-­‐Profit
ü FoundaJon
Funded
• Rockefeller
Brothers
Fund
• Kresge
FoundaJon
• Tilia
Fund
• Energy
FoundaJon
• Roy
A.
Hunt
FoundaJon
ü InformaJon,
Resources,
Advice,
Networking,
Problem
Solving
• www.PACENow.org
3
Building
PACENa-on

4. PACENATION
More
is
beAer
4
Join
for
Free

5. PACENATION
More
is
beAer
5
Sign
up
for
the
Summit

6. PACE
IN
90
SECONDS
6

7. OLD
CONCEPT
–
NEW
APPLICATION
7
1736
–
First
Assessment
District
in
Philadelphia
Today
–
37,000
Assessment
Districts
naJonwide
ü Water
&
Sewer
Service
ü Parks
ü Sidewalks
ü LighJng
ü Downtown
renewal
ü Energy
Efficiency
(PACE)
Local
Government
Financing
–
Public
Purpose
Goal

8. WHAT
MAKES
A
PACE
DEAL?
8
A
Building
Owner

9. WHAT
MAKES
A
PACE
DEAL?
9
A
Project….
And
a
Contractor

10. WHAT
MAKES
A
PACE
DEAL?
10
Someone
to
Fund
the
Project

11. WHAT
MAKES
A
PACE
DEAL?
11
Local
Government
to
“Service”
the
Financing

12. WHAT
MAKES
A
PACE
DEAL?
12
Building
Owner
Repays
with
an
Assessment

13. WHAT
MAKES
A
PACE
DEAL?
13
Assessment
Repays
Project
Funder

14. WHO
CAN
USE
PACE?
Almost
Any
Building
–
Including
Non-­‐Profits
14

15. WHAT
FOR?
15
Projects
that
Save
or
Generate
Energy

16. WHY
PACE?
16
No
$
out
of
pocket
–
Hard
and
SoS
costs

17. WHY
PACE?
Long-­‐Term
Payback
17
Standard
commercial
lending
rarely
exceeds
5
to
7
years

18. WHY
PACE?
Makes
Long
Payback
Projects
Work
18
The
secure
nature
of
PACE
enables
up
to
20-­‐yr
funding:
projects
with
simple
paybacks
as
long
as
12
years
can
be
implemented
on
a
posiJve
cash
flow
basis
ü Increases
NOI
ü Increases
Property
Value

19. WHY
PACE?
PACE
Transfers
on
Sale
19
No
payoff
on
sale
–
PACE
automaJcally
transfers
to
the
new
owner,
like
any
other
real
estate
tax
ü No
residual
encumbrance
and
easy
exit.
ü Takes
the
risk
away
from
invesJng
in
needed
CAPEX.

20. WHY
PACE?
20
Share
Benefits
and
Costs
with
Tenants
The
real
estate
tax
assessment
can
be
passed
on
to
tenants
under
most
lease
forms
ü Eliminates
the
landlord/tenant
split
incenJve
for
triple
net,
modified
gross
leases,
and
industrial
modified
gross
leases.

21. PACE
TODAY
21
32
states
and
DC
-­‐
80+%
of
US
popula-on
2009
2009
2009
2013
2009
2009
2009
2009
2009
2009
2015
2008
2013
2013
2013
2011
2010
2010
2010
2010
2010
2010
2012
2010
2009
2009
HI
ExisJng
Authority
2015
/
2016
legislaJve
iniJaJves
2013
21
2014
2015
2016
2016
2015
2016
2015
2015
2015
PACE
enabled

22. RESIDENTIAL

23. Early
stage
PACE
program
development
PACE
programs
with
funded
projects
RESIDENTIAL
PACE
TODAY
23
PACE
enabled
51,000+
Homes
-­‐
$1+
billion
23

24. RESURGENCE
IN
RESIDENTIAL
ü SCEIP,
HERO,
CaliforniaFIRST,
Ygrene,
Alliance
NRG
• San
Francisco,
San
Diego,
Los
Angeles,
Sacramento,
Placer
ü California
(CAEATFA)
establishes
reserve
• Municipal
opt-­‐in
insures
mortgage
lenders
ü HERO
Program
securiJzes
$630+
million
• Deutsche
Bank
underwrites
3
deals,
AA
raJng,
-­‐
4.00%
ü FHFA
conJnues
to
voice
disapproval
ü Growing
interest
in
other
states
• NY,
CT,
FL,
MA
24
California
Leads
Residen-al
Renaissance

25. POTENTIAL
GAME
CHANGER
25
President
Obama
Backs
PACE

26. POTENTIAL
GAME
CHANGER
ü States
maintain
senior
lien
statutes
ü Local
governments
treat
PACE
as
a
senior
lien
ü Project
funders
provide
limited
contractual
subordinaJon
• They
give
the
PACE
money
back
on
houses
that
foreclose
and
are
under
water
ü Future
PACE
assessments
remain
in
place
26
HUD
/
Federal
Housing
Administra-on
Guidance

27. COMMERCIAL

28. Early
stage
PACE
program
development
PACE
programs
with
funded
projects
JUNE
2010
28
PACE
enabled
27
Projects
completed
-­‐
$5
mil
28

29. 29
PACE
programs
with
funded
projects
PACE
PROGRAMS
TODAY
390+
Projects
-­‐
$150+
mil
-­‐
Pipeline
$500+
mil
–
2,000+
Jobs
Early
stage
PACE
program
development
Launched
PACE
programs
PACE
enabled
29

30. PACE
COMMERCIAL
MARKET
STATS
Broad
Applicability

31. PACE
COMMERCIAL
MARKET
STATS
Broad
Applicability
31

32. PACE
COMMERCIAL
MARKET
STATS
Broad
Applicability
32

33. 33
SIMON
PROPERTY
GROUP
–
GREAT
LAKES
MALL,
OH
“We
hope
to
serve
as
pioneers
in
this
arena,
encouraging
others
to
explore
the
many
ways
to
reduce
energy
use
now,
rather
than
delaying
sound
financial
and
environmental
decisions.”
George
Caraghiaur,
former
SVP
for
Sustainability
at
Simon
Property
Group
33
$3.4
mil
Energy
Efficiency
–
Mul-
Project

34. 34
PROLOGIS,
INC.
HEADQUARTERS
–
SAN
FRANCISCO,
CA
“Prologis
is
parJcipaJng
in
the
PACE
program
in
order
to
promote
new,
innovaJve
soluJons
for
financing
sustainable
building
improvements.
It
provides
the
flexibility
to
drive
more
energy
improvement
programs
and
that’s
something
everyone
should
embrace.”
Jack
Rizzo,
Managing
Director,
Global
Construc-on
and
Renewable
Energy,
Prologis
34
$1.4
mil
Energy
&
Solar
Upgrade
–
Mul-
Project

35. 35
SOLAR & EE UPGRADE IN MIDDLETOWN, CT
Hartord
West
Hartord
Bridgeport
Norwalk
Simsbury
Stamford
Stratord
Southbury
Project
§ the installation of air units, variable
frequency drives, high efficiency lights,
occupancy sensors, air leakage
improvements, an upgraded energy
management system,
§ and a 260 kW ground-mounted solar
photovoltaic system.
Financial Impact
▪ Energy savings of $224k annually
Impact
▪ 51M kBTUs saved
▪ 8.5M kWh clean energy produced
$2.5
mil
Energy
&
Solar
Upgrade
–
Mul-
Project
35

36. ACCESSING
PACE
–
LOT’S
OF
MODELS
ü PACE
Platorm
–
Municipality
as
“Loan
Servicer”
ü Sole
municipality
• Edina
(MN),
San
Francisco
(CA),
Ann
Arbor
(MI),
Sacramento
(CA)
ü MulJple
municipaliJes
–
ConsorJums
• California
(California
First,
FigTree,
LA
County)
• Florida
(Florida
Green
Energy
Works,
Ygrene)
• Michigan
(MI
Lean
&
Green)
• New
York
(Energize
New
York)
ü Statewide
–
Uniformity
and
Scale
• ConnecJcut
36
Decentralized
Market
–
Mix
of
Models
&
Providers
Low
High

37. PACENOW
ü David
Gabrielson,
ExecuJve
Director
david@pacenow.org
ü www.pacenow.org
www.pacenaJon.us
ü QuesJons:
info@pacenow.org
37
Contact
Informa-on