Issue 1: Action Alert: PACE Financing in NYS Legislature
Property Assessed Clean Energy (PACE) financing is a locally-administered program that eliminates financial barriers for residents making energy upgrades to their home. In a typical PACE program, property owners can finance energy efficiency improvements using low-interest municipal bonds. The municipality covers the cost for energy improvements upfront, in exchange for long-term financing which is repaid through an assessment on the resident’s property taxes. This arrangement can spread the cost of a project over the life of an energy efficiency upgrade, so that energy savings are greater than the assessment. PACE financing can create positive cash flows from day one, eliminating upfront costs. Additionally, if an owner moves, the assessment is automatically transferred to the new property owner.
PACE enabling legislation, that authorizes the creation of a voluntary tax district for energy improvements, has been adopted in 17 states. In New York, a similar law was passed in 2009, but restricts PACE programs to those using federal funds, effectively excluding municipal bonds as a financing option . Current legislation in the state Senate, introduced by Senator Antoine Thompson, would allow programs to be funded by municipal bonds. This change in state law would make it much easier to start PACE programs. A vote on the bill is expected next week. Model letters of support and municipal resolutions would help ensure the passage of this bill and can be found on the sidebar.
