‘Tax-Lien’ Financing Supports Deeper Retrofits, Longer Paybacks
Article from Commercial Property Executive
By Brad Berton, Contributing Writer
If you are a sustainability- or energy efficiency-minded commercial property executive and are not yet familiar with the emerging property assessed clean energy (PACE) retrofit financing alternative—well, you are not paying close enough attention.
While this complicated and innovative structure predictably has not yet become the silver bullet long-term tool its more optimistic adherents are anticipating, momentum is building at a pretty hefty clip.
As tends to be the case with newfangled financial mechanisms like PACE’s tax-lien structure, it is taking a while for the transaction count to take off. PACE logically faces a few sticky issues: standardization of underwriting, authentication of efficiency improvements, uncertainties about passing costs (and benefits) through to tenants—not to mention plain old familiarity and track record.
Hence, even while legislation continues to give rise to new municipal, county and statewide PACE programs (approaching 30 states at this point, plus the District of Columbia), the iteration in a green-minded city and county like San Francisco is off to a surprisingly slow start.
But momentum is clearly building, and the first high-profile deal recently consummated through San Francisco’s GreenFinanceSF program can only help, proponents suggest. Ditto for the new multi-jurisdictional CaliforniaFIRST PACE program, which teams another 14 Golden State counties and 126 cities (and more to follow), with its private-sector administrator authorized to issue $14 billion in bonds backing the effort.
In fact, no fewer than 500 professionals participated in a recent webinar introducing Connecticut’s already active new program known as C-PACE. Anthony Buonicore, whose namesake building energy consultancy is acting as C-PACE’s program administrator, succinctly explained the strong interest.
“It’s an extremely attractive model” for financing commercial building energy retrofits with reasonably priced long-term debt, the Buonicore Partners principal stressed.
And Brian McCarter, CEO of C-PACE’s data management platform provider Sustainable Real Estate Solutions, characterized PACE’s potential as no less than a “proving ground to accelerate the large-scale adoption of commercial real estate energy-efficiency investment.”
Why such superlatives? Well, the clean energy and commercial property sectors have long sought that silver bullet: a long-term financing mechanism funding highly beneficial upgrades that may not pay for themselves in energy savings for a decade—or maybe two.
As so many owners have focused primarily on the short-payback low-hanging fruit such as lighting and HVAC upgrades to date, they have typically funded them mostly with capital expenditures. Indeed, PACE expert Eric Bloom, senior research analyst at Pike Research, estimates less than 15 percent of commercial building energy retrofits are financed with debt, due in great part to the paucity of attractively priced longer-term financing.
The beauty of the PACE structure is that entire costs of efficiency-enhancing investments can be financed for as long as 20 years—allowing for immediate improvements to property cash flows as debt is paid off long term through lien-secured property-tax assessments. In fact, C-PACE appears to be setting the trend in requiring that upgrade-driven savings exceed the PACE debt-service obligations right from the start.
As a practical matter, that requirement is arguably redundant. With most programs, existing first-priority lenders must consent to the lien assessment—a logical rule, given that the PACE lien obligation is superior to any recorded mortgage, though just to the amount of the PACE debt due.
PACE programs generally prohibit transactions at properties underwater, with existing mortgage debt. With C-PACE the recommendation is to go with properties securing mortgage debt of no more than 75 percent loan-to-value.
A related feature is that PACE liens are tied to the property, not the owner, and hence need not be reconveyed or refinanced with a sale or recapitalization. And while interest rates typically in the 6 to 8 percent neighborhood are generally above prevailing short-term rates, that is a pretty attractive neighborhood, considering all costs, including energy audits and upgrade underwriting, can be financed.
Add it all up and PACE is now spawning more comprehensive, multi-faceted energy retrofit programs, rather than the more singular upgrades (window, solar PV arrays and the like) seen with most of the pioneering transactions in recent years, related clean energy finance veteran John Kinney.
“It’s a paradigm shift in the making,” commented Kinney, CEO of Clean Fund, the clean energy investment operation that late last year funded the $1.4 million transaction (at 6.9 percent) financing big industrial REIT Prologis Inc.’s comprehensive San Francisco headquarters property retrofit.
Programmatic Approach
Rather than limiting energy-efficiency improvements to isolated investments, owners tapping PACE programs today are migrating toward comprehensive programs that boost cash flows from year one, Kinney elaborated.
“That’s a much more attractive approach” to funding clean-energy upgrades, he observed. “I see a lot of sophisticated property owners looking into PACE and concluding that energy investments that immediately improve cash flows provide better returns than investing in fancier lobby signage and such.”
Owners pursuing PACE transactions these days might combine window and lighting upgrades with building management system installations, and in some cases PV arrays and other on-site energy generation systems.
For example, with the landmark Prologis bayfront headquarters office building at Pier 1, improvements overseen by mega-contractor Johnson Controls will include building energy monitoring systems, LED lighting upgrades and a 200-kilowatt rooftop solar array. The expectation is that the investments will reduce the 151,600-square-foot property’s consumption of grid-sourced electricity by more than 30 percent from its 2011 baseline measurement.
And it certainly bodes well for additional PACE activity that Prologis owns many square miles of American rooftops potentially housing solar arrays, Kinney added.
As PACE transactions go, the Pier 1 program is on the larger side, although Buonicore noted that PACE-financed retrofits around the country to date typically cost at least $150,000—and far more in select cases. For the most part they are highly effective, with energy efficiency gains usually exceeding 25 percent—“and more often 30 percent and above.”
C-PACE allows for financing of building modifications, as long as they are directly related to energy improvement programs and do not account for more than 25 percent of the overall cost. Logically, the useful lives of the improvements need to exceed or at least match the corresponding assessment period.
Another retrofit just underway, tapping the new Clean Energy Sacramento PACE program, is the $513,000 chiller upgrade at BTV Crown Equities’ 94,200-square-foot, early-1960s-vintage 520 Capitol Mall office property. The more efficient equipment is expected to reduce energy costs by approximately $47,000 annually.
The Sacramento program also illustrates further evolution in PACE funding models—in its case known as the “fully funded” model, through which a private investment entity agrees to provide all the up-front cash needed for approved retrofits. Clean Energy Sacramento’s private administrator, Ygrene Energy Fund, in partnership with Barclays Capital and other members of the PACE Commercial Consortium, has agreed to fund any qualifying project if the property owner is not able to secure PACE financing from another source.
This contrasts somewhat with the “owner-arranged” model seen with C-PACE, GreenFinanceSF and others—and through which (as the moniker suggests) property owners negotiate rates and terms most appropriate for the borrower and whatever lender it brings to the table. In either case, the PACE jurisdiction issues long-term lien-secured bonds the lender group agrees to purchase.
C-PACE is actually becoming something of a hybrid, as administrators have lined up eight pre-qualified lenders that might agree to step in if the property owner has a tough time securing a private debt source. A compelling feature of both models is that no tax dollars are tied up funding PACE transactions.
“It’s a smart way to use the good auspices of government without using government coffers,” said Jessica Bailey, director of the commercial and industrial component of Connecticut’s PACE authority. The more models, the merrier, added Kinney. “There’s no reason they can’t coexist.”
As the program count continues to grow and participants gain experience, Kinney and others expect more owners, capital providers and energy contractors to become active PACE players. Greater standardization and reliability of energy-efficiency measurement, monitoring and savings projections—not to mention transaction financial underwriting—should likewise push the PACE case forward.
Meanwhile, owners and tenants will also need to work through passthrough-related issues in order to make PACE transactions more financially attractive to all parties. Landlords can generally pass on the added debt service to tenants on net leases, which will be beneficiaries of the operating-cost savings.
And despite accounting uncertainties pertaining to escalation clauses and operating expense qualifications, enlightened owners of properties subject to gross leases realize PACE-related improvements help them over the longer term, as the lowered energy costs allow them to economically charge lower rental rates as lease terms expire.
At Pier 1, for instance, Prologis was able to allocate some 70 percent of the PACE upgrade costs to five other tenants, based on their occupancy square footage.
Institutional Involvement
As participants continue working out any kinks that come along, PACE programs should attract more institutional capital, Kinney expects. While the PACE Commercial Consortium does include some institutional participation, Clean Fund’s investors today are mostly conservative individuals and family-type investors attracted to clean energy investments and optimistic about prospective secondary-market arbitrage opportunities.
Of course, existing lenders will play key roles, given their exposure to tax-lien subordination and corresponding right of consent. In fact, Kinney’s advice is that “if the mortgage holder doesn’t approve a transaction, you should take that as a signal that it’s not an advisable transaction as structured.”
And as he and others are also quick to point out, some of these lenders are bound to see solid new lending opportunities in providing the PACE funding, along with senior mortgage debt. Indeed, as Buonicore noted, there has been so much deferral of needed energy improvements and equipment replacements in recent years, capital providers should encounter “plenty of pent-up demand” for PACE financing ahead.
And as Bloom observed, retrofit activity is bound to be brisk in jurisdictions establishing PACE programs as well as the new energy benchmarking mandates taking effect in major markets across the country.
Likewise, Kinney expects burgeoning PACE-related activity to induce vendors performing the energy upgrades to commit additional resources as they look to meet the stronger market demand. That in turn should generate scale efficiencies that reduce retrofit costs.
In other words, more property pros will become what he calls “PACE-aholics.”
Thursday, April 25, 2013
Thursday, February 14, 2013
PACE Market Overview Paper Released
Johnson Controls Institute for Building Efficiency, PACENow, and the Urban Land Institute are pleased to announce the release of the white paper, titled "Setting The PACE: Commercial Retrofit Financing," a paper offering an overview of the commercial PACE market that is geared towards the commercial building owner community.
Johnson Controls Institute for Building Efficiency, PACENow, and the Urban Land Institute are pleased to announce the release of the white paper, titled "Setting The PACE: Commercial Retrofit Financing," a paper offering an overview of the commercial PACE market that is geared towards the commercial building owner community.
The paper takes a close look at four active PACE programs, which
demonstrate the range of financing approaches within the PACE industry. There
programs are:
• GreenFinanceSF, CA
• DC PACE Program, D.C.
As of February 2013, there were 16 commercial PACE programs accepting
applications to finance building efficiency projects. Most of these have been
active for less than a year, and some are just now completing their first
projects. As this new market develops, early-stage PACE programs have taken
different approaches to program design and administration. Lessons learned from
their experiences may well shape the overall success of PACE in the years to
come.
Program designers and advocates believe that PACE financing
structures offer significant advantages over other financing options,
including:
• Zero up-front cash investment
• Immediate positive cash flow
• Long-term financing (up to 20 years)
• PACE assessment stays with the property upon
sale
• Ability to pass payments through to tenants
• Low interest rates
• Higher rents and greater long-term property
value because of energy efficiency
• Preservation of borrowing
capacity through off-balance–sheet financingTo read more, download this white paper here.
Deutsche Bank and The Rockefeller Foundation Release Building Energy Retrofit Study
DB Climate Change Advisors (DBCCA) and The Rockefeller Foundation today released a research study which examines the potential size and investment opportunity of upgrading and replacing energy-consuming equipment in US real estate. The paper, entitled, “United States Building Energy Efficiency Retrofits: Market Sizing and Financing Models,” highlights this investment opportunity, with the potential for significant economic, climate, and employment impact. DBCCA is the climate change investment and research business of Deutsche Bank’s Asset Management business.
Judith Rodin, President, The Rockefeller Foundation, noted “buildings consume approximately 40% of the world’s energy and are responsible for 40% of global carbon emissions. However, proven technologies to retrofit buildings can both conserve energy and - even more importantly in these difficult economic times – have the potential to create a large number of jobs. With the release of this new report, outlining both the investment and job opportunities, I am increasingly hopeful that this market can achieve its full potential.”
Mark Fulton, Global Head of Climate Change Investment Research for DBCCA, stated “We believe that the emerging Energy Service Agreement financing structure offers significant near term potential to scale quickly and meet the needs of both real estate owners and capital providers in the commercial and institutional market, without the requirement for external enablers such as regulation or subsidy.”
In this report, DBCCA and The Rockefeller highlight that:
- ~$279 billion could be invested in retrofitting the residential, commercial, and institutional market segments in the US.
- This investment could yield more than $1 trillion of energy savings over 10 years, equivalent to savings of approximately 30% of the annual electricity spend in the United States.
- If all of these retrofits were undertaken, more than 3.3 million job years could be created.
- These jobs would include a range of skill qualifications, and would be geographically diverse across the United States.
- Additionally, if all of these retrofits were successfully undertaken, it would reduce U.S. emissions by nearly 10%.
###
Wednesday, January 5, 2011
PACE energy-efficiency loan program stirs concerns
18 Jul 2010 11:37 am
BY Jeffrey Tomich jtomich@post-dispatch.com
314-340-8320
Is Missouri's newest and boldest initiative to encourage energy savings doomed before it takes root?
Gov. Jay Nixon signed a bill on Monday enabling Property Assesses Clean Energy (PACE) programs, which allow cities and counties to issue bonds to help home owners finance energy efficiency upgrades or solar panel installation. Money from the bond sales is lent to property owners, who repay it over a period of up to 20 years through special property tax assessments.
PACE laws have been adopted in 22 states as a way to cut energy use and create jobs by making it easier for homeowners to cut energy use and shrink utility bills.
But Fannie Mae and Freddie Mac, which own or guarantee more than half of the mortgages in the U.S., have been directed to steer clear of PACE loans by their regulator, the Federal Housing Finance Agency. The Office of the Comptroller of the Currency, which regulates national banks, and the Mortgage Bankers Association have expressed similar concerns.
The issue: Like property taxes, PACE liens take priority over mortgages. That makes the bonds easier for municipalities to sell. But if a home is foreclosed on, the liens are paid before the mortgage lender can recoup any money.
That fact has spooked mortgage giants and FHFA, which said in a July 6 letter that PACE loans "pose a significant risk to lenders" and "are not essential for successful programs to spur energy conservation."
The position in effect shut down PACE programs across the country.
California, which pioneered PACE financing, is fighting back. The state's attorney general sued Fannie, Freddie and FHFA on Wednesday, claiming their opposition is threatening jobs and access to federal funding.
In Missouri, energy efficiency advocates acknowledge the uncertainty surrounding PACE but are working to roll out programs anyway, hoping the conflict is resolved.
On Friday, energy advocacy group Renew Missouri held a PACE implementation training conference in Columbia for about 100 energy auditors, solar installers and local government officials.
"Our view is that these concerns and problems will be resolved," said Byron DeLear, a founding partner of Energy Equity Funding LLC, a company that hopes to administer PACE programs in the state.
DeLear also heads the Missouri Association of Accredited Energy Professionals, a year-old state association of energy auditors and contractors. MAAEP helped push PACE legislation in Jefferson City and has a lot riding on the success of the programs.
PACE is expected to spur millions of dollars in efficiency and renewable energy upgrades across the state. That could mean hundreds of new jobs for energy auditors, contractors and home remodelers.
DeLear projects that 80 percent of PACE loans in Missouri will be used to finance energy efficiency projects averaging about $5,000. The rest will also incorporate renewable energy systems such as solar panels with those projects averaging about $25,000. Statewide, the average PACE loan would be about $9,000, he estimates.
Tom Ochsner, a St. Peters energy auditor, is among those counting on the programs to provide a boost to his company, Thermal Vision. He currently has just one part-time employee but hopes to be able to add more staff if PACE is successful.
Ochsner said homeowners, too, would benefit, especially those who earn too much to qualify for low-income weatherization programs but don't have enough in the bank to fund energy savings projects out of pocket.
"Not everyone can write a check for $6,000 or $7,000 or $8,000 for a new furnace or air conditioner and maybe some new windows," he said.
Several cities and counties are anxious to participate in PACE programs, too. One is Ferguson, in north St. Louis County.
"We've been watching and nurturing it for long time, and we hope to get to the point where we can use it," said Rosalind Williams, director of planning and development for the city.
Homeowners have other ways, such as home equity loans, to finance efficiency improvements. But some homeowners are hesitant to tie up their home equity, or don't want to be subject to floating interest rates, said Steve Frenkel, Midwest director for Renewable Energy Funding LLC, a company that administers PACE programs. Others may fear that they will lose the investment if they move, he said. By contrast, PACE liens stay with the home if it's sold.
Also, the Department of Energy and White House have issued strict underwriting guidelines to make sure financing is given to only low-risk borrowers, he said.
The Missouri law requires the formation of local clean energy boards to review PACE applications. The boards would also be required to file annual reports with the Department of Natural Resources, cataloguing projects, loan amounts, administrative costs and cumulative energy savings.
In most cases, energy audits would be required for PACE financing. And energy boards would approve loans if energy efficiency improvements are cost-effective.
Missouri bankers supported the PACE legislation.
Still, lenders won't approve any mortgages associated with PACE loans as long as Fannie, Freddie and FHFA object, said Max Cook, CEO of the bankers association. Instead, they're watching to see if the matter gets resolved. "It's an awfully big question mark," Cook said. "You hope that (the program) works as intended."
PACE supporters reject the suggestion by Fannie and Freddie that the liens are too risky for investors. "These are no different than the kind of special assessments that local governments have created for decades for public improvements like building roads and sewer lines," Frenkel said.
Supporters are hopeful Congress will step in and resolve the stalemate, especially since the administration of President Barack Obama has been a proponent of PACE and set aside $150 million of stimulus funds to help implement programs. Legislation was introduced in Washington on Thursday.
"I really see this as a minor hiccup," said Erin Noble, energy policy coordinator for the Missouri Coalition for the Environment. "It's pretty absurd that PACE is under the microscope that it is."
BY Jeffrey Tomich jtomich@post-dispatch.com
314-340-8320
Is Missouri's newest and boldest initiative to encourage energy savings doomed before it takes root?
Gov. Jay Nixon signed a bill on Monday enabling Property Assesses Clean Energy (PACE) programs, which allow cities and counties to issue bonds to help home owners finance energy efficiency upgrades or solar panel installation. Money from the bond sales is lent to property owners, who repay it over a period of up to 20 years through special property tax assessments.
PACE laws have been adopted in 22 states as a way to cut energy use and create jobs by making it easier for homeowners to cut energy use and shrink utility bills.
But Fannie Mae and Freddie Mac, which own or guarantee more than half of the mortgages in the U.S., have been directed to steer clear of PACE loans by their regulator, the Federal Housing Finance Agency. The Office of the Comptroller of the Currency, which regulates national banks, and the Mortgage Bankers Association have expressed similar concerns.
The issue: Like property taxes, PACE liens take priority over mortgages. That makes the bonds easier for municipalities to sell. But if a home is foreclosed on, the liens are paid before the mortgage lender can recoup any money.
That fact has spooked mortgage giants and FHFA, which said in a July 6 letter that PACE loans "pose a significant risk to lenders" and "are not essential for successful programs to spur energy conservation."
The position in effect shut down PACE programs across the country.
California, which pioneered PACE financing, is fighting back. The state's attorney general sued Fannie, Freddie and FHFA on Wednesday, claiming their opposition is threatening jobs and access to federal funding.
In Missouri, energy efficiency advocates acknowledge the uncertainty surrounding PACE but are working to roll out programs anyway, hoping the conflict is resolved.
On Friday, energy advocacy group Renew Missouri held a PACE implementation training conference in Columbia for about 100 energy auditors, solar installers and local government officials.
"Our view is that these concerns and problems will be resolved," said Byron DeLear, a founding partner of Energy Equity Funding LLC, a company that hopes to administer PACE programs in the state.
DeLear also heads the Missouri Association of Accredited Energy Professionals, a year-old state association of energy auditors and contractors. MAAEP helped push PACE legislation in Jefferson City and has a lot riding on the success of the programs.
PACE is expected to spur millions of dollars in efficiency and renewable energy upgrades across the state. That could mean hundreds of new jobs for energy auditors, contractors and home remodelers.
DeLear projects that 80 percent of PACE loans in Missouri will be used to finance energy efficiency projects averaging about $5,000. The rest will also incorporate renewable energy systems such as solar panels with those projects averaging about $25,000. Statewide, the average PACE loan would be about $9,000, he estimates.
Tom Ochsner, a St. Peters energy auditor, is among those counting on the programs to provide a boost to his company, Thermal Vision. He currently has just one part-time employee but hopes to be able to add more staff if PACE is successful.
Ochsner said homeowners, too, would benefit, especially those who earn too much to qualify for low-income weatherization programs but don't have enough in the bank to fund energy savings projects out of pocket.
"Not everyone can write a check for $6,000 or $7,000 or $8,000 for a new furnace or air conditioner and maybe some new windows," he said.
Several cities and counties are anxious to participate in PACE programs, too. One is Ferguson, in north St. Louis County.
"We've been watching and nurturing it for long time, and we hope to get to the point where we can use it," said Rosalind Williams, director of planning and development for the city.
Homeowners have other ways, such as home equity loans, to finance efficiency improvements. But some homeowners are hesitant to tie up their home equity, or don't want to be subject to floating interest rates, said Steve Frenkel, Midwest director for Renewable Energy Funding LLC, a company that administers PACE programs. Others may fear that they will lose the investment if they move, he said. By contrast, PACE liens stay with the home if it's sold.
Also, the Department of Energy and White House have issued strict underwriting guidelines to make sure financing is given to only low-risk borrowers, he said.
The Missouri law requires the formation of local clean energy boards to review PACE applications. The boards would also be required to file annual reports with the Department of Natural Resources, cataloguing projects, loan amounts, administrative costs and cumulative energy savings.
In most cases, energy audits would be required for PACE financing. And energy boards would approve loans if energy efficiency improvements are cost-effective.
Missouri bankers supported the PACE legislation.
Still, lenders won't approve any mortgages associated with PACE loans as long as Fannie, Freddie and FHFA object, said Max Cook, CEO of the bankers association. Instead, they're watching to see if the matter gets resolved. "It's an awfully big question mark," Cook said. "You hope that (the program) works as intended."
PACE supporters reject the suggestion by Fannie and Freddie that the liens are too risky for investors. "These are no different than the kind of special assessments that local governments have created for decades for public improvements like building roads and sewer lines," Frenkel said.
Supporters are hopeful Congress will step in and resolve the stalemate, especially since the administration of President Barack Obama has been a proponent of PACE and set aside $150 million of stimulus funds to help implement programs. Legislation was introduced in Washington on Thursday.
"I really see this as a minor hiccup," said Erin Noble, energy policy coordinator for the Missouri Coalition for the Environment. "It's pretty absurd that PACE is under the microscope that it is."
Missouri says, "Show Me The PACE"
19 Jul 2010 11:57 am
Missouri says “show me the PACE”; as has happened for Presidents Bush through Kennedy, does winning Missouri mean winning the country?
Lost in the hubbub over the FHFA and States suing the Federal Government is one bit of great news for the PACE Community: on July 12th, 2010 Missouri became the 23rd state to pass PACE-enabling legislation. Why is this good news, you ask? Well, for three reasons (at least):
1. Missouri voters have correctly predicted the outcome of every presidential election (save for two, 1956 and 2008) since 1904. Perhaps Missouri will once again be a bellwether, this time for PACE at a national scale?
2. Missouri’s a long way from Berkeley. The passage of PACE in Missouri is an indicator that PACE is a concept that transcends political, geographical, and social lines. We’ve seen this highlighted in other states as well, but this recent news reinforces the trend.
3. Missouri’s bankers backed PACE. A source close to the effort told me that participation from the local banker’s association was critical to getting the bill pushed into law, going as far as saying that their participation was “the only way [the bill] got passed.”
The genesis of the bill follows what has become a predictable path for PACE legislation: one local government becomes inspired by PACE and champions it at a state level. In the case of California that local government was the City of Palm Desert, which upon seeing the success of the Berkeley PACE pilot decided to push for state legislation (AB-811) that would enable all local governments to deploy PACE programs, not just Charter Cities like Berkeley. (It should be noted that Palm Desert is itself a Charter City and thus had pre-existing authority to deploy PACE. Pushing AB-811 was truly done out of the goodness of their good ol’ hearts.) In the case of Missouri, that local municipality was the City of Ferguson in St. Louis County. Every PACE program needs a champion, and it sounds like Missouri found it in Ferguson.
One challenge Missouri may have is in getting those PACE projects to pencil. It’s hard to imagine PACE underwriting standards becoming more lax as a result of the FHFA tussle, so any PACE project will most certainly have to be cash flow positive. The average residential retail price of electricity in Missouri is 7.65 cents per kWh, compared to over 15 cents in California and 11.2 cents on average for the U.S. One of the biggest drivers of clean energy economics is the cost of avoided electricity, so these rates will narrow the scope of available projects. That said, the “good” news is that Missouri’s building standards haven’t been as aggressive as other PACE states, so hopefully there are plenty of energy hogs out there to retrofit. And the electricity PACE will save in Missouri is particularly dirty: over four fifths of it comes from coal carted in from Wyoming. Let’s hope the FHFA lets us try.
Renew Missouri, a non-profit that worked to advance Missouri’s legislation held a workshop on Friday to kick off PACE efforts in the state. A PDF of the workshop agenda is available here. According to an article in the Columbia Missourian, they were expecting 50 and 80 turned up from 19 different municipalities. Here’s to you, Mizzurah.
Missouri says “show me the PACE”; as has happened for Presidents Bush through Kennedy, does winning Missouri mean winning the country?
Lost in the hubbub over the FHFA and States suing the Federal Government is one bit of great news for the PACE Community: on July 12th, 2010 Missouri became the 23rd state to pass PACE-enabling legislation. Why is this good news, you ask? Well, for three reasons (at least):
1. Missouri voters have correctly predicted the outcome of every presidential election (save for two, 1956 and 2008) since 1904. Perhaps Missouri will once again be a bellwether, this time for PACE at a national scale?
2. Missouri’s a long way from Berkeley. The passage of PACE in Missouri is an indicator that PACE is a concept that transcends political, geographical, and social lines. We’ve seen this highlighted in other states as well, but this recent news reinforces the trend.
3. Missouri’s bankers backed PACE. A source close to the effort told me that participation from the local banker’s association was critical to getting the bill pushed into law, going as far as saying that their participation was “the only way [the bill] got passed.”
The genesis of the bill follows what has become a predictable path for PACE legislation: one local government becomes inspired by PACE and champions it at a state level. In the case of California that local government was the City of Palm Desert, which upon seeing the success of the Berkeley PACE pilot decided to push for state legislation (AB-811) that would enable all local governments to deploy PACE programs, not just Charter Cities like Berkeley. (It should be noted that Palm Desert is itself a Charter City and thus had pre-existing authority to deploy PACE. Pushing AB-811 was truly done out of the goodness of their good ol’ hearts.) In the case of Missouri, that local municipality was the City of Ferguson in St. Louis County. Every PACE program needs a champion, and it sounds like Missouri found it in Ferguson.
One challenge Missouri may have is in getting those PACE projects to pencil. It’s hard to imagine PACE underwriting standards becoming more lax as a result of the FHFA tussle, so any PACE project will most certainly have to be cash flow positive. The average residential retail price of electricity in Missouri is 7.65 cents per kWh, compared to over 15 cents in California and 11.2 cents on average for the U.S. One of the biggest drivers of clean energy economics is the cost of avoided electricity, so these rates will narrow the scope of available projects. That said, the “good” news is that Missouri’s building standards haven’t been as aggressive as other PACE states, so hopefully there are plenty of energy hogs out there to retrofit. And the electricity PACE will save in Missouri is particularly dirty: over four fifths of it comes from coal carted in from Wyoming. Let’s hope the FHFA lets us try.
Renew Missouri, a non-profit that worked to advance Missouri’s legislation held a workshop on Friday to kick off PACE efforts in the state. A PDF of the workshop agenda is available here. According to an article in the Columbia Missourian, they were expecting 50 and 80 turned up from 19 different municipalities. Here’s to you, Mizzurah.
HOME STAR included in Clean Energy bill
28 Jul 2010 11:04 am
HOME STAR Coalition Applauds Senate for Inclusion of the bi-partisan HOME STAR Legislation in The Clean Energy Jobs and Oil Company Accountability Act.
HOME STAR Coalition Urges Swift Action by Congress and The Administration as coalition supporters grows to over 2,600
WASHINGTON, D.C., July 28, 2010 – The HOME STAR Coalition, a broad-based and diverse group of small and medium sized businesses and nationally recognized companies, labor and environmental organizations and associations, today applauded the inclusion of the HOME STAR legislation in The Clean Energy Jobs and Oil Company Accountability Act. The Home Star Coalition is joining Senate leadership for a press conference today to discuss the bill and the critical need for HOME STAR.
“I’m honored to represent the more than 2,600 members of the HOME STAR Coalition and the millions of families across America that will benefit from this important bi-partisan legislation,” said WellHome President Larry Laseter, who is representing the HOME STAR Coalition at the press conference with Senate leadership today. “HOME STAR is good policy, but even better practicality in its ability to deliver a triple win for America – it creates clean energy jobs for our nation’s skilled construction workers and at U.S. manufacturing facilities, it benefits homeowners through comfort and energy efficient improvements to their homes, and it helps the environment through long-term energy efficiency gains.”
The HOME STAR Coalition also announced its membership increased to over 2,600, the majority of which are small and medium sized businesses and organizations from every state in the country who stand in support of HOME STAR and its widespread benefits for job creation, savings for homeowners, and energy efficiency. To view the complete list of HOME STAR Coalition supporters go here http://www.homestarcoalition.
“I am a second-generation insulation contractor with branch operations in Arizona, Nevada and California,” said Insulation Contractors Association of America (ICAA) President Jeff Banker, of Banker Insulation in Phoenix Arizona. “Passage of the HOME STAR legislation would enable our family-owned business to hire contractors in all of our locations. I urge the Senate to please help small businesses across America by passing HOME STAR.”
The HOME STAR legislation, which passed the House in May, has bi-partisan support and over 30 co-sponsors in the Senate. HOME STAR also has the support of the U.S. Chamber of Commerce and the National Association of Manufacturers (NAM).
HOME STAR is a market-driven, low-bureaucracy program that would create jobs fast by scaling the existing home energy efficiency improvement industry. Consumers nationwide would embrace HOME STAR because it will be simple, accessible, and help them save money.
For more information about HOME STAR and the HOME STAR Coalition visit www.homestarcoalition.org.
HOME STAR Coalition Applauds Senate for Inclusion of the bi-partisan HOME STAR Legislation in The Clean Energy Jobs and Oil Company Accountability Act.
HOME STAR Coalition Urges Swift Action by Congress and The Administration as coalition supporters grows to over 2,600
WASHINGTON, D.C., July 28, 2010 – The HOME STAR Coalition, a broad-based and diverse group of small and medium sized businesses and nationally recognized companies, labor and environmental organizations and associations, today applauded the inclusion of the HOME STAR legislation in The Clean Energy Jobs and Oil Company Accountability Act. The Home Star Coalition is joining Senate leadership for a press conference today to discuss the bill and the critical need for HOME STAR.
“I’m honored to represent the more than 2,600 members of the HOME STAR Coalition and the millions of families across America that will benefit from this important bi-partisan legislation,” said WellHome President Larry Laseter, who is representing the HOME STAR Coalition at the press conference with Senate leadership today. “HOME STAR is good policy, but even better practicality in its ability to deliver a triple win for America – it creates clean energy jobs for our nation’s skilled construction workers and at U.S. manufacturing facilities, it benefits homeowners through comfort and energy efficient improvements to their homes, and it helps the environment through long-term energy efficiency gains.”
The HOME STAR Coalition also announced its membership increased to over 2,600, the majority of which are small and medium sized businesses and organizations from every state in the country who stand in support of HOME STAR and its widespread benefits for job creation, savings for homeowners, and energy efficiency. To view the complete list of HOME STAR Coalition supporters go here http://www.homestarcoalition.
“I am a second-generation insulation contractor with branch operations in Arizona, Nevada and California,” said Insulation Contractors Association of America (ICAA) President Jeff Banker, of Banker Insulation in Phoenix Arizona. “Passage of the HOME STAR legislation would enable our family-owned business to hire contractors in all of our locations. I urge the Senate to please help small businesses across America by passing HOME STAR.”
The HOME STAR legislation, which passed the House in May, has bi-partisan support and over 30 co-sponsors in the Senate. HOME STAR also has the support of the U.S. Chamber of Commerce and the National Association of Manufacturers (NAM).
HOME STAR is a market-driven, low-bureaucracy program that would create jobs fast by scaling the existing home energy efficiency improvement industry. Consumers nationwide would embrace HOME STAR because it will be simple, accessible, and help them save money.
For more information about HOME STAR and the HOME STAR Coalition visit www.homestarcoalition.org.
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