The absence of attractive financing options can put the brakes on commercial property owners’ plans to significantly upgrade the efficiency of their buildings. But 14 California counties and 126 cities have joined forces to launch the country’s largest PACE program to help those owners finance energy and water efficiency and renewable energy upgrades.
PACE (also referred to as Property Assessed Clean Energy) is the cornerstone of the CaliforniaFIRST program, which is a program of the California Statewide Communities Development Authority. It allows commercial property owners to use municipal bonds to finance their efficiency upgrades, and to repay them via a special assessment on their property tax bill.
In a press release announcing the financing initiative, San Diego County Supervisor Dianne Jacob said “The county’s partnership with CaliforniaFIRST provides a mechanism for participants to start spending less money on energy bills and more back into the business.”
PACE programs are relatively new. The first was started by the city of Berkeley for residential owners in 2008, but hit regulatory problems in 2010. But Commercial PACE programs have fared better and San Francisco, Los Angeles County and Washington, D.C. In California, the program is said to have the potential to create almost 25,000 jobs.
Traditional financing institutions like Wells Fargo are involved as are innovative companies like San Rafael-based Clean Fund.
As the Energy Department has repeated frequently, the potential for energy savings in commercial buildings is huge. DOE researchers have said if all businesses and institution performed cost-effective upgrades, they could cut their average energy use by 25% – and that the cost (more than $100 million) would be offset through the smaller energy bills.
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