A financing tool was launched in 14 California counties and 126 cities to help commercial property owners increase energy and water efficiencies in their facilities.
The financing tool, called Property Assessed Clean Energy (PACE), was first pioneered by the city of Berkeley for residential owners in 2008, but the program faced regulatory opposition in 2010.
The PACE tool is part of CaliforniaFIRST, a program of the California Statewide Communities Development Authority. It allows commercial property owners to use municipal bonds to finance energy efficiency, water efficiency and renewable energy upgrades that the owners repay through a special assessment on their annual property tax bill. Through a public-private partnership, private capital will be used to supply the upfront funding for the work instead of local government funding.
“Commercial PACE gives businesses a great option for pursuing energy efficiency projects that may have previously been out of reach,” said San Diego County Supervisor Dianne Jacob. “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.”
Commercial PACE programs have been launched in several areas such as San Francisco, Los Angeles County and Washington, D.C. The CaliforniaFIRST program is the first multi-jurisdictional program of its kind to be statewide in scale.
In addition to traditional banks such as Wells Fargo, there are a number of innovative financial institutions, such as Clean Fund, that are active in the PACE market.
The CaliforniaFIRST program is administered by Renewable Funding, which launched the nation’s first PACE program in Berkeley in 2008. The firm advises the U.S. Department of Energy on commercial PACE financing and operates commercial PACE programs for local governments stretching from San Francisco to Melbourne, Australia.
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