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PACE Property Assessed Clean Energy

PACE Property Assessed Clean Energy. National League of Cities Congressional City Conference, March 2012. Why PACE?. Private Market Solution to meet National Goals. PACE is Property Assessed Clean Energy. How PACE Works. Property owner opts-in and makes energy improvements.

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PACE Property Assessed Clean Energy

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  1. PACEProperty Assessed Clean Energy National League of Cities Congressional City Conference, March 2012

  2. Why PACE? Private Market Solution to meet National Goals www.pacenow.org

  3. PACE is Property Assessed Clean Energy How PACE Works Property owner opts-in and makes energy improvements Property owner pays assessment on tax bill (for up to 20 years) Local government provides financing – adds assessment to tax roll Local government creates assessment district www.pacenow.org

  4. PACE – early momentum with Residential Programs PACE is a World Changing Idea… Scientific American, 2009 2008 to 2011 • Legislation passed in 27 States • DOE best practices and guidelines • Pilot programs in California, New York, and Colorado • 3,176 EE/RE Projects • $68+ million in spending • 1,000+ Estimated Jobs • FHFA stalls residential programs • Legislation and Litigation • Focus shifts to commercial programs www.pacenow.org

  5. Legislation to Restore Residential PACE • PACE Assessment Protection Act of 2011 • HR 2599 introduced by Rep Nan Hayworth on July 20, 2011 • Requires GSEs to establish fair underwriting standards for PACE mortgages • Programs must conform with enhanced DOE standards set forth in the bill, such as: • Homes have at least 15% equity • Audit and work by qualified contractors that produce positive SIR • 51 Co-sponsors – (Bipartisan support - 29 D, 21 R) • Nita Lowey is a co-sponsor • Stalled in Financial Services Committee www.pacenow.org

  6. Litigation to Restore Residential PACE • U.S. District Court in Northern California orders Rulemaking • Federal Administrative Procedures Act requires FHFA to seek and weigh public comment prior to imposing rules • Advance Notice of Proposed Rulemaking published January 26th • Public has until March 26thto enter comment • Comment can take any form, may address any of the FHFA’s stated concerns, and can provide proposed guidance (i.e. a “rule” recommendation) • PACE assessments are valid • PACE poses no meaningful risk to mortgage lenders • PACE programs can be designed to protect the interests of local governments, homeowners, and mortgage lenders • PACE programs should be allowed to proceed • Resources, including Template Letter and Talking Points at www.pacenow.org • FHFA issues Proposed Rule on April 26 • Public will have at least 30 days to enter comments on proposed rule • FHFA issues Final Rule www.pacenow.org

  7. Residential Program Performance Program Administrators, March 9, 2012 www.pacenow.org

  8. Focus Shifts to Commercial PACE Commercial PACE www.pacenow.org

  9. Potential for Commercial PACE Potential for PACE – 10 years 100 bft2 of Total Commercial by 2021 20% Retrofitted w PACE $50 Billion - direct spending (at $2.50 ft2) 1+ Million jobs Source: McKinsey & Company, Unlocking Energy Efficiency in the US Economy, 2009 www.pacenow.org

  10. Barriers to EE - Commercial Source: EE Indicator – NA 2010, Johnson Controls and International Facilities Management Association (IFMA) www.pacenow.org

  11. PACE Solves Commercial Barriers www.pacenow.org

  12. PACE Commercial – Emerging Programs Edina, MN California PACE-Regional Bedford, NY Milwaukee, WI Northampton, MA Ann Arbor, MI Sonoma County, CA Northeastern OH Sacramento, CA Washington, DC Boulder County, CO Placer County, CA Kansas City, MO San Francisco, CA WRCOG, CA Los Angeles, CA Palm Desert, CA Santa Fe, NM FL-Regional State with PACE enabling legislation State with emerging commercial PACE program Commercial PACE program operational (or near) Commercial PACE program in development 12 www.pacenow.org

  13. Commercial Projects to Date www.pacenow.org

  14. Accelerating Commercial PACE • PACENow focus on 4 key challenges • Support for establishing programs • Legislation • Local, regional, statewide • Open market vs Sole source • Initiatives to drive CRE owner demand • Strategies for gaining support from existing mortgage lenders • Track record of support from national, regional, and local lenders • Short-term and long-term financing strategies • Short-term: owner arranged • Long-term: aggregation of assessments and securitization www.pacenow.org

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