Although the Federal Housing Finance Agency (FHFA) has created strict requirements for residential property-assessed clean energy (PACE) programs, a few states and cities are continuing to develop programs and pass legislation.
The Texas House and Senate passed Senate Bill 385 this week. If Governor Rick Perry approves the bill, the state will break new ground by developing plans for commercial and industrial property assessed clean energy (PACE) programs. This bill will redesign Texas’s approach to PACE, focusing on the commercial and industrial sectors rather than on residential programs. The legislation covers both energy efficiency and water efficiency.
The Alliance to Save Energy’s Commission on National Energy Policy included financing as one of the central recommendations in its recent report, "Energy 2030: Doubling U.S. Energy Productivity by 2030."
Growing momentum for energy efficiency financing in the United States has motivated State and Local Energy Efficiency Action Network to conduct around 20 interviews with stakeholders in five states to explore what it takes to make utility-sponsored programs succeed. The research team produced a report that outlines the pitfalls and promises of a wide range of evaluation techniques.
In November, Renovate America, the San Diego-based Property-Assessed Clean Energy (PACE) program administrator, passed a major milestone—funding over $1 billion in residential installations. As of that month, the program was available to over 80 percent of California households and had completed over 50,000 projects. The company now plans to scale up nationally. According to PACENation, an advocacy organization, Renovate America’s proprietary HERO program is the most widely adopted residential PACE program in the United States, accounting for 95 percent of the established market.
How can alternative financing solutions help expand clean energy through capital markets? Industry experts convened at this year’s Asset-Backed Securities (ABS) East conference in Miami on Sept. 20-23 to discuss these possibilities. Yieldcos, crowdfunding or peer-to-peer (p2p) markets, and property-assessed clean energy (PACE) financing could supplement the role of securitization and may deliver the capital the renewable energy industry demands.
Small commercial energy efficiency retrofits are often at the bottom of building owners’ priority lists. According to “Financing Small Commercial Building Energy Performance Upgrades: Challenges and Opportunities,” a report published in January by National Institute of Building Sciences (NIBS), a complex knot of challenges is preventing building owners from both seeking financing and accessing it. The authors recommend that government organizations step in with policies and programs designed to cut the knot and set financing in motion.
Texas faces an unusual scenario when it seeks to advance property-assessed clean energy (PACE). The state has a tradition of seeking private-sector solutions and streamlining government activities. This means PACE methods adopted in other states – such as Connecticut – would not work in Texas. Also, Texas’s private sector is massive. The state’s businesses – and their environmental footprint – are growing rapidly. In a Nov. 18 webinar called “PACE in Texas 101,” Charlene Heydinger, executive director of Keeping PACE in Texas, said Texas uses 19 percent of the industrial energy consumed in the United States.