Finally someone recognizes the inefficiency of each county or city implementing and administering its own clean energy finance program. Last Friday, the State of Colorado passed House Bill 1328 to establish a New Energy Improvement District that will promote and finance county PACE programs across the state. A county just needs to opt in to join the district.
The legislation was developed to prevent the current inefficient model of PACE programs, in which individual counties and cities are responsible for each going through the steps to establish their own special districts and financing. The process of reinventing the wheel is no longer necessary after multiple states launched the first generation of energy financing programs in Berkeley, CA, Sonoma County, CA, Palm Desert, CA and Boulder County, CO. California, the birthplace of the PACE financing concept and the state that has the most aggressive in turning PACE legislation into action, has been moving toward this model after a number of counties and cities piloted their own programs.
The Colorado legislation will allow for up to $800 million in bonds to finance energy efficiency and renewable energy projects. The main limitation is that the program will only cover residential energy improvements. Colorado's previous clean energy financing legislation still allows for counties to establish special districts to finance both energy projects for residential and commercial properties.
Showing posts with label Energy Efficiency. Show all posts
Showing posts with label Energy Efficiency. Show all posts
Monday, June 14, 2010
Tuesday, June 1, 2010
The Dawn of an Energy Efficient Florida
Are your energy bills off the charts? Can't afford those new solar panels for your home? Florida's newest law will give you the tools to do something about it.
Last week, Florida Governor Charlie Crist signed HB 7179 into law, making Florida the latest state to authorize Property Assessed Clean Energy or PACE. Under HB 7179, property owners can apply for funding and enter into financing agreements with local governments to finance energy and hurricane hardening improvements. The local government has permission to collect the borrowed funds from property owners through non-ad valorem assessments. The financing mechanism removes the upfront costs for property owners to invest in improvements that can reduce energy and insurance costs.
These improvements fall into three categories and apply to residential, commercial and industrial properties:
- Energy Efficiency Improvements
- Renewable Energy Systems
- Wind Resistance Improvements
The bill passed through the House and Senate with little opposition and opens up the potential for many Florida cities and counties to launch energy finance programs. A program offers benefits across many diverse groups:
1) Local government: Mechanism to create jobs in the construction industry and meet sustainability objectives without commiting general fund dollars on an ongoing basis.
2) Property Owners: Potential increase in cash flow as a result of energy savings and lowers risk by hedging against rising energy prices.
3) Utilities: Tool to achieve demand side management goals and reduce emissions.
4) Contractors: Increased market demand for services, increase in revenue and ensures a reliable payment source.
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Wednesday, May 26, 2010
Georgia passes Energy Finance legislation
Another Southeastern State jumped on the PACE train last week. On May 20, 2010, Georgia Governor Sonny Perdue signed bill HB 1388 into law.
The bill authorizes "The provision of financing to property owners for the purpose of installing or modifying improvements to their property in order to reduce the energy or water consumption on such property or to install an improvement to such property that produces energy from renewable resources." The financing will come through local development authorities and can be applied to industrial, commercial, business, office, parking, and public facilities.
There has been little press coverage so far on the bill (see here). We will be following the details in the upcoming months and will be sure to provide any updates on our blog.
Video: PACE Explained Simply
Great simple explanation of how Property Assessed Clean Energy (PACE) works.
Wednesday, May 19, 2010
Video: Lee County PACE News Story
The video is a little misleading since it only focuses on solar energy technology projects. PACE will also allow loans for energy efficiency and wind resistance improvement projects. Property owners would be far more likely to participate in these programs if Florida allocates more money to the solar rebate program that is currently oversubscribed. For the latest copy of the PACE bill HB 7179, go here.
Tuesday, March 2, 2010
San Francisco launches nation's largest PACE program
San Francisco is following Berkeley's lead and will launch the biggest PACE program in the nation (article). Beginning on March 1, 2010, a total of $150 million in loans will be made available to the city's property owners for energy efficiency, renewable energy, and water conservation improvements. This program expands upon the Berkeley PACE program, a pilot study in 2008 that dedicated $1.5 million in loans for solar panel installations.
For the program to really work in San Francisco, it will have to prioritize energy efficiency improvements before renewable energy projects. What's the benefit of generating renewable energy when your HVAC system is old and inefficient, your windows have leaks, and your house lacks insulation? The energy produced and the cost savings generated will be quickly lost.
Ultimately, these energy efficiency retrofits are more economical and have a far quicker payback than renewable energy technologies. Dr. Jones really hit on this critical point in his last post when he said municipalities need to focus on those high impact retrofits that pay dividends quickly. Setting up a system that focuses on the quick paybacks has the added bonus of encouraging more property owners to participate in the program, which results in more energy reduction. The way I look at it is...every kilowatt we can save is a step in the right direction.
For the program to really work in San Francisco, it will have to prioritize energy efficiency improvements before renewable energy projects. What's the benefit of generating renewable energy when your HVAC system is old and inefficient, your windows have leaks, and your house lacks insulation? The energy produced and the cost savings generated will be quickly lost.
Ultimately, these energy efficiency retrofits are more economical and have a far quicker payback than renewable energy technologies. Dr. Jones really hit on this critical point in his last post when he said municipalities need to focus on those high impact retrofits that pay dividends quickly. Setting up a system that focuses on the quick paybacks has the added bonus of encouraging more property owners to participate in the program, which results in more energy reduction. The way I look at it is...every kilowatt we can save is a step in the right direction.
Monday, March 1, 2010
It seems so straight forward
By Pierce Jones
Energy Finance District (EFD) and Property Assessed Clean Energy (PACE) programs facilitate low interest loans for residential energy efficiency retrofits and renewable energy systems that decrease a homeowner’s utility bills. But the loan has to be repaid. Paul D’Arelli made an excellent point in his posting last week. He said that to ensure the long-term success of their EFD (or PACE) programs, local governments should develop those programs such that property owners are likely to realize energy savings sufficient to offset the cost of their new assessments. I think it’s critically important that homeowners not find themselves upside down in their EFD loans.
Like many utility-operated demand side management (DSM) programs, a basic residential energy efficiency retrofit loan program could cover a range of upgrades including: weather-stripping, caulking, duct leakage repair, attic insulation, hot water system upgrade, some windows and some HVAC upgrades. Using Energy Gauge® software, we calculate that for a somewhat energy inefficient house, the energy savings from these type upgrades should be from 30-40%. For a somewhat energy inefficient 2,000 ft2 Florida home that uses ~25,000 kWh/yr the total annual electric bill would be ~$3,000/yr (@ $.12/kWh). So, a 30-40% savings would range from about $900 to $1,200 per year. For a given home, a suite of upgrades could cost anywhere from $5,000 to $10,000. So, what’s the payback?
If you get a 40% savings and only spend $5,000, an EFD loan could be paid off in as few as five years (even at interest rates as high as 8%). However, if you only get 30% savings and the retrofits cost $10,000 then it could take more than 15 years to pay off the loan even at very low interest rates (5%). An efficiently run EFD loan program that is focused on high impact energy conservation retrofits can pay dividends to homeowners very quickly as long as we keep our eye on the ball. As long as the programs stay focused on measurably decreasing household energy use, I’m confident that residential energy efficient retrofit loans can provide tremendous benefits to Florida communities - including job creation.
Energy Finance District (EFD) and Property Assessed Clean Energy (PACE) programs facilitate low interest loans for residential energy efficiency retrofits and renewable energy systems that decrease a homeowner’s utility bills. But the loan has to be repaid. Paul D’Arelli made an excellent point in his posting last week. He said that to ensure the long-term success of their EFD (or PACE) programs, local governments should develop those programs such that property owners are likely to realize energy savings sufficient to offset the cost of their new assessments. I think it’s critically important that homeowners not find themselves upside down in their EFD loans.
Like many utility-operated demand side management (DSM) programs, a basic residential energy efficiency retrofit loan program could cover a range of upgrades including: weather-stripping, caulking, duct leakage repair, attic insulation, hot water system upgrade, some windows and some HVAC upgrades. Using Energy Gauge® software, we calculate that for a somewhat energy inefficient house, the energy savings from these type upgrades should be from 30-40%. For a somewhat energy inefficient 2,000 ft2 Florida home that uses ~25,000 kWh/yr the total annual electric bill would be ~$3,000/yr (@ $.12/kWh). So, a 30-40% savings would range from about $900 to $1,200 per year. For a given home, a suite of upgrades could cost anywhere from $5,000 to $10,000. So, what’s the payback?
If you get a 40% savings and only spend $5,000, an EFD loan could be paid off in as few as five years (even at interest rates as high as 8%). However, if you only get 30% savings and the retrofits cost $10,000 then it could take more than 15 years to pay off the loan even at very low interest rates (5%). An efficiently run EFD loan program that is focused on high impact energy conservation retrofits can pay dividends to homeowners very quickly as long as we keep our eye on the ball. As long as the programs stay focused on measurably decreasing household energy use, I’m confident that residential energy efficient retrofit loans can provide tremendous benefits to Florida communities - including job creation.
Monday, February 22, 2010
Florida: The Opportunity for a New Paradigm in Energy Finance Districts
By Paul D'Arelli
It has been very exciting to see the concept of an energy finance district (EFD) start to get traction here in Florida. These EFD financing arrangements are referred to in different circles by a variety of names, including, “Property Assessed Clean Energy” (PACE) programs; “Voluntary Environmental Improvement Bonds” (VEIBS), and “Energy Loan Tax Assessment Programs” (ELTAPs). Under these EFD financing arrangements, the local government raises capital from public and/or private financing sources that is loaned to property owners who voluntarily enter into loan/contractual assessment agreements to finance a renewable energy system (e.g., solar) and/or energy efficiency improvements to the property (e.g., insulation, HVAC, windows, etc.). The loan is repaid by the property owner over a long term (e.g., 10-20 years) as an item on the property owner's ad valorem tax bill.
After working hands-on on these financing initiatives in California, I had the pleasure of presenting the concept around Florida in several venues, including the Florida Green Cities Conference in Orlando and then at the Florida Association of Counties meeting recently in St. Pete. As I understand it, there were 2 bills that were put into formal bill drafting by Legislators for potential consideration in the 2010 Session, including the one we presented with our white paper to the Florida Association of Counties. If Florida adopts implementing legislation for EFDs in one form or another, then I believe local governments will need to focus their efforts on quality control as they set up their local finance programs. Prescribing appropriate eligible improvements for finance, effective deployment processes (education and training of property owners, auditors, contractors and vendors), collection and disbursement mechanisms, and other program criteria will be key. The end game for a local government should be to develop a program that best ensures that property owners are likely to realize energy savings sufficient to off set the cost of the assessments in order to set the predicate for long term success of the local program. Let's not just imitate what is being done in other states in this area, but let's develop a paradigm here in Florida for best practices that result in measurable and verifiable success.
It has been very exciting to see the concept of an energy finance district (EFD) start to get traction here in Florida. These EFD financing arrangements are referred to in different circles by a variety of names, including, “Property Assessed Clean Energy” (PACE) programs; “Voluntary Environmental Improvement Bonds” (VEIBS), and “Energy Loan Tax Assessment Programs” (ELTAPs). Under these EFD financing arrangements, the local government raises capital from public and/or private financing sources that is loaned to property owners who voluntarily enter into loan/contractual assessment agreements to finance a renewable energy system (e.g., solar) and/or energy efficiency improvements to the property (e.g., insulation, HVAC, windows, etc.). The loan is repaid by the property owner over a long term (e.g., 10-20 years) as an item on the property owner's ad valorem tax bill.
After working hands-on on these financing initiatives in California, I had the pleasure of presenting the concept around Florida in several venues, including the Florida Green Cities Conference in Orlando and then at the Florida Association of Counties meeting recently in St. Pete. As I understand it, there were 2 bills that were put into formal bill drafting by Legislators for potential consideration in the 2010 Session, including the one we presented with our white paper to the Florida Association of Counties. If Florida adopts implementing legislation for EFDs in one form or another, then I believe local governments will need to focus their efforts on quality control as they set up their local finance programs. Prescribing appropriate eligible improvements for finance, effective deployment processes (education and training of property owners, auditors, contractors and vendors), collection and disbursement mechanisms, and other program criteria will be key. The end game for a local government should be to develop a program that best ensures that property owners are likely to realize energy savings sufficient to off set the cost of the assessments in order to set the predicate for long term success of the local program. Let's not just imitate what is being done in other states in this area, but let's develop a paradigm here in Florida for best practices that result in measurable and verifiable success.
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