History of PACE in Missouri
In May 2010, the Missouri General Assembly passed a bill called Property Assessed Clean Energy (PACE). PACE has the potential to create jobs, save money and create more prosperous and sustainable communities. Best of all, these programs can be designed, financed, and implemented at the local level with very little or no start-up cash.
In Missouri, PACE was supported by a broad coalition of groups and passed the Missouri General Assembly as part of a bi-partisan effort by a vote of 144 – 11 in the House as part of House Bill 1692.
In Missouri, the PACE bill requires the financial savings to outweigh the special assessment on an annual basis yielding projects that are cash-flow-positive from the start. Upon sale of a home, the special assessment and energy savings are passed on to next owner. By spreading out the payments over time, the energy savings gained each month on electric bills make the upgrades cost-effective from day one.
Unfortunately, residential PACE has been halted by the FHFA since June. Now the push is on to get federal action taken, reinstating residential PACE.
Locally Grown: Energy Legislation can put Missouri on PACE
Saturday, July 10, 2010 | 9:25 a.m. CDT; updated 2:43 p.m. CDT, Saturday, July 10, 2010
BY Michael Burden
Remember those solar panels I mentioned? Soon they just might be within my reach.
Somewhere in the office of Missouri Gov. Jay Nixon a bill that could make energy efficiency improvements and renewable energy generation much more affordable awaits his signature.
Like most bills, House Bill 1692 includes multiple issues but Property Assessed Clean Energy, or PACE, is what I’m tracking. Gov. Nixon has until Wednesday to act on the legislation. Signing it next week would create strong momentum for the Thursday conference Advancing Renewables in the Midwest at MU.
PACE works like this: financing for energy efficiency improvements and renewable energy generation is done through an additional property tax assessment over the course of 20 years. It removes the biggest obstacle to making large-scale energy upgrades — the initial cost.
“It’s a financing tool that has swept the nation because of its tremendous potential to unlock energy savings, create jobs and cut pollution,” said Steve Frenkel, director of the Midwest region for Renewable Funding. Frenkel said the jobs created in Missouri could number in the thousands.
“It’s a win-win because it creates local green jobs at a time when our construction industry needs them most and helps Missourians save on their energy bills,” said Erin Noble, co-director of Renew Missouri.
More than 20 states have authorized PACE, and Missouri could be next. Many cities in Missouri, including Columbia, Springfield and St. Louis, have expressed interest in PACE.
“By signing the bill Nixon would unlock the private market, allow property owners to cut utility bills, spur local investment and create jobs in a way that no other financing tool has been able to deliver,” Frenkel said.
Developed in Berkeley, Calif., in 2007, (I know, big surprise) PACE enables cities or counties to establish Clean Energy Development Boards that can issue low-interest bonds to home and business owners to fund renewable energy systems and energy improvements.
The yearly energy savings at the property must be greater than the yearly assessment to qualify for the program. The assessment — and the energy savings — stay with the property.
Participation is completely voluntary, so if Columbia adopts the program, opting in is up to you. Only PACE participants pay the tax assessment.
I can almost see the solar panels lining my rooftop and my electric meter spinning backwards. In eager anticipation, I got an estimate for a solar PV system for our home.
Even to power our modest needs, we would need a solar array that costs around $10,000 installed, after local and federal rebates. That’s a large chunk of change at once, but spread out over 20 years makes it manageable.
But then Fannie Mae and Freddie Mac clouded my plans with concerns that if property owners default on their mortgages, PACE paybacks would take priority.
The Federal Housing Finance Agency issued this statement Tuesday, which has brought residential PACE programs to an abrupt halt — for now.
This shouldn’t give the governor pause in considering PACE legislation though, as commercial and industrial electric consumers don’t borrow from Freddie Mac and Fannie Mae, so that portion of the program can surge forward.
In Boulder, Colo., PACE has been taking off. Since May 2009, 612 residential upgrades from attic insulation to solar panels generated about $10 million for the local economy, said Ann Livingston, sustainability coordinator for Boulder County.
Local advocates of PACE aren’t worried about Fannie Mae and Freddie Mac’s critiques of the program. Jason Hughes of Renew Missouri said they’ll be able to forge ahead with commercial and industrial PACE projects.
By the time they have the details worked out with interested cities and counties, he’s confident there will be national legislation that smoothes out the wrinkles in the residential program.
Hughes said a good PACE program is one that’s available to lots of people, has flexibility, stability and easy access to information so homeowners can make decisions based on hard data.
According to U.S. Energy Information Administration data, Missouri produces about 3 percent of its electricity from renewables, and the bulk of that comes from hydroelectric power. There is plenty of room for growth in the industry and PACE could be a great tool to stimulate it and help cities and the state reach their renewable energy benchmarks.
Buildings account for about 40 percent of carbon dioxide emissions and energy use, so this program could help Missouri soften its carbon footprint while saving its residents money.
“Without reducing energy consumption in buildings, we won’t be able to reach our energy security and environmental goals,” Frenkel said.
Ron and Irene Neely aren’t waiting around for the legislation. They’re adding to their current solar system near Ashland on Saturday. Look for a slideshow early next week covering the installation.
Michael Burden is a journalism graduate student at MU, a graduate instructor and the MU campus representative for the Peace Corps.
PACE in the News
July 18, 2010
July 16, 2010
July 12, 2010
June 23, 2010
May 27, 2010
Public News Service - Missouri gets PACE program
May 25, 2010