PACE. Energy Efficiency Investments can Cre Jobs and Build a Brig Clean-Energy Future Americans Nationwid

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1 PACE Financ Energy Efficiency Investments can Cre Jobs and Build a Brig Clean-Energy Future Americans Nationwid

2 Partners The American Sustainable Business Council is an advocate for and business networks that support the education, administrativ legislation needed to have a vibrant, equitable and sustainable e

3 PROPERTY ASSESSED CLEAN ENERGY Status, Strategies and Opportun for 2012

4 What is PACE? PACE financing programs allow property owners to finance ene efficiency and renewable energy projects for their homes and c buildings. PACE programs are funded with revenue bonds generated by m governments. Interested property owners opt in to receive financing for impro that are repaid through a special tax assessment on their prope PACE financing terms are typically between 10 and 20 years. The PACE repayment obligation will transfer automatically to th property owner if the property is sold. Enabling legislation for PACE financing has been adopted in 27 Following a strong start in 2007, residential PACE programs ha effectively stopped by an opposing FHFA guidance. HR 2599 PACE Assessment Protection Act of 2011 seeks to rem

5 Benefits of PACE to Property Owner PACE programs are voluntary, use private sector financin require no government subsidies or taxpayer support. Reduced or no up-front costs for financing The PACE payment obligation is covered by cost savings generated by energy efficiency improvements. Energy improvements and repayment responsibility rema the property Reduced utility cost improves cash flow PACE-improved properties will increase in value as utility increase over time Realtors are beginning to list energy improvements to pro

6 Economic Benefits of PACE PACE provides a much-needed boost to the economy throug increased jobs and commerce PACE investment will generate business for contractors, manufacturers, wholesalers, retailers, and installers of clean/renewable energy and efficiency products, and strength value of properties while contributing to cleaner communities nationwide. Recent news: Tax Plan to Turn Old Buildings Green Finds Favor (NYT S 2011) Justin Gillis PACE Financing: Enabling Energy Savings and Job Creati (Huffington Post Dec. 7, 2011) Scott D. Henderson Directo finance, Clinton Climate Initiative (CCI) PACE enhances property values, business efficiency, and com prosperity

7 Studies emphasize great potential for economic benefits thr PACE programs: EcoNorthwest indicates that retrofitting 1% of America s homes with could: Create 226,000 jobs Generate $42 billion in economic output, Economic Benefits of PACE And $4.2 billion in combined Federal, state and local taxes Scott D. Henderson, Director of finance at the Clinton Climate Initiat suggests energy efficiency investment in existing commercial buildin Create 240,000 jobs in the U.S. over the next decade Avoid some 128 million metric tons of annual CO2 emission According to the 2009 report by McKinsey & Company: Unlocking E Efficiency in the US Economy, over a 10-year period, PACE could: Drive $50 billion in direct spending Create 1 million jobs Based on the retrofit of 20% of commercial buildings in the U Sources: EcoNorthwest, Scott D. Henderson, and McK

8 Private Market Solution to meet National

9 HOW PACE WORKS Local government creates assessment district Property owner opts-in and makes energy improvements Local government provides financing adds assessment to tax roll Property pays asses tax bill (fo yea

10 PACE EARLY MOMENTUM WITH RESIDENT PROGRAMS 2008 to 2011 Legislation passed in 27 States DOE best practices and guidelines $%%C# Pilot programs in California, New York, and Colorado $%%C# 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 $%%D# " G#5H1?A; >#<I *: /01*2# $%&&# $%%D# $%%C# $%%C# $%%C# $%&%# $%&%# $%%C# $%%C# $%%C# $%&%# ) *+*, #- +./01*2#3456#7#' 5-8#9 :, ; #6<( 5#=, >1?@+A $% $

11 LEGISLATION TO RESTORE RESIDENTIAL P 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 PAC mortgages Programs must conform with enhanced DOE standards set for bill, such as: o Homes have at least 15% equity o Audit and work by qualified contractors that produce positive 51 Co-sponsors (Bipartisan support - 30 D, 21 R) Stalled in Financial Services Committee

12 FOCUS SHIFTS TO COMMERCIAL PACE Commercial PACE

13 POTENTIAL FOR COMMERCIAL PACE Potential for PACE years 100 bft 2 of Total Comm by % Retrofitted w PAC Source: McKinsey & Company, Unlocking Energy Efficiency in the US Economy, 2009 $50 Billion - direct spe (at $2.50 ft 2 ) 1+ Million jobs

14 BARRIERS TO ENERGY EFFICIENCY: COMME Source: EE Indicator NA 2010, Johnson Controls and International Facilities Management Association (IFMA)

15 PACE SOLVES COMMERCIAL BARRIER

16 EMERGING COMMERCIAL PROGRAMS

17 COMMERCIAL PROJECTS TO DATE Program # $ Total $ Average Interest % Term Funding Sonoma 37 7,270, , Max County Tre 1 1,580, Max Clean Fund Boulder 29 1,520,000 52, / or 10 QECB / Cn Placer 2 320, , Max County Tre Edina 1 37,000 37,000 Clean Fund Palm Desert 3 575, , Max City Backe 73 11,302, ,000

18 ACCELERATING COMMERCIAL PACE PACENow focus on 4 key challenges 1. Support for establishing programs Legislation Local, regional, statewide Open market vs Sole source 2. Initiatives to drive CRE owner demand 3. Strategies for gaining support from existing mortgage le Track record of support from national, regional, and local lender 4. Short-term and long-term financing strategies Short-term: owner arranged Long-term: aggregation of assessments and securitization

19 PACE IN COLORADO: CLIMATE SMART Source: ClimateSmart Loan Program

20 PACE PROGRAMS IN FLORIDA Source: Florida PACE Funding Ag

21 Source: S American Sustainable Business Council PACE IN CALIFORNIA: SCEIP

22 Source American Sustainable Business Council SCEIP RESULTS

23 PACE IN CALIFORNIA: RENOVATE AMERI Source: Renovate America

24 COMMERCIAL PACE IN CALIFORNIA Source: Clea

25 TAKE ACTION Please take action to support HR 2599 with letters to Congress: Legislation.html Participate in the public comment period for FHFA s advance notice of rulemaking on PACE: 60-day public comment period will allow PACE supporters to we on the process. Deadline for comment is 3/26. To confirm state legislation status, state-specific prog status, to ask specific questions, or to develop a PAC strategy for businesses and/or communities in your s please contact Richard Eidlin at ASBC.

26 CONTACTS Richard Eidlin: ASBC Director, Campaigns and Business Outreach, Bob Mang: Co-Chair of ASBC Energy & Environme Working Group, Bill Germain: ASBC Intern and Director of ASBC PA Campaign, David Gabrielson: Executive Director, PACENow

27 RESOURCES PACENow: ClimateSmart news: county-news/ci_ Florida PACE Funding Agency: SCEIP: Rennovate America: Commercial PACE programs in San Francisco, Los Ang and Washington D.C.: energy-finance/major-u-s Cities-to-Launch-Commerc PACE-Progra.aspx