1. Property Assessed Clean Energy

2. PACE in the US and Abroad
Finding Money for Clean Energy - an Overview
Berkeley’s Approach - PACE
Legal Structure
Program Administration
Financial Structures
PACE Abroad

3. Overview

4. “ ” ” Top 20 World Changing Ideas: December 2009
A new innovation in financing, however, has opened up an additional possibility for homeowners who want to reduce their carbon footprint and lower their electric bills: get the panels for free, then pay for the power as you go.
December 2009 ” ”

5. U.S. Vice President Biden“
We are going to make it a lot easier to borrow money. We are doing this by encouraging communities to give you the option to pay the expense of retrofitting your home by paying it back on your property taxes. ” ”
U.S. Vice President Biden
October 2009

6. Architects of PACE
Contracts cover 200+ local governments; 25+ million people
Contracts in 8 U.S. States
Offices in 6 U.S. States
Leading Provider of PACE design, administration, financing, and tech services

7. Berkeley’s Approach -- PACE

8. PACE: Simple, Effective Tool
City or county
creates type of
land-secured
financing district
or similar legal
mechanism
Property owners
voluntarily sign-up
for financing and
install energy
projects
Proceeds from
PACE
bond or other
financing provided
to property owner
to pay for energy project
Property owner
repays bond
through property
tax bill
(up to 20 years)
How does it work? It’s simple. First, a city or county creates a land-secured financing district.
Property owners can choose to sign up for financing and then hire a contractor to install their energy project.
Then, the city issues a PACE Bond to finance the work and uses the proceeds from the bond to send a check to to property owner to pay for energy project.
Finally, the property owner pays the contractor for the work and then repays bond through a small assessment on their property tax bill.

9. What can PACE Fund? Types of Improvements Types of Buildings
Solar photovoltaic
Solar hot water
Ground source heat pumps
Lighting
Windows
High efficiency boilers, furnaces, and air conditioning
Insulation and air sealing
Cool roofs
Grey water systems
Other energy saving improvements
Types of Buildings
Residential (both single-family and multi-family)
Commercial (e.g. office buildings, restaurants, shopping malls, etc.)
Manufacturing

10. Key Benefits for Local Governments
Helps meet
energy and
climate goals
Tax neutral and
no risk to
government funds
Promotes local jobs
Many taxpayers are skeptical of new government programs – especially when they hear that the program originated in Berkeley, California. But PACE is popular with local governments because it is tax neutral and has no exposure for the General Fund.
As I’ve described, PACE is also one of the best and fastest tools for local governments to reach their climate change goals.
But perhaps most importantly – at least right now in the midst of the Great Recession – is that PACE financing programs help create jobs QUICKLY. How many jobs will this program create? Let me show you an estimate …

11. Key Benefits for Property Owners
Saves money on utility bills
Long repayment term and competitive interest rates
Repayment transfers to new owner
We’ve talked a lot about benefits to the city. But the big question for every property owner is: will I save money?
Each person will need to do their own assessment, but many if not most homeowners will save money through PACE financing.
Another big benefit of PACE financing is that it is not based on personal credit. The application takes only a few minutes – and mainly deals with whether you have paid your property taxes on time over the previous three years.
Also, if you sell your home, the new owner automatically assumes payments – just like if it were a school bond or some other municipal bond. So you are not stuck in the position of making a big investment in your home that you can’t recoup when you move.

12. Legal Structure

13. States that have passed PACE enabling legislation

14. PACE Enabling Legislation
Example: California’s AB 811
Passed in 2009
Amended 1911 Improvement Code to expand the scope of Contractual Assessment Financing
Expanded eligible measures to include privately owned renewable energy and energy efficiency improvements that are permanently attached to real property (including residential, commercial, and manufacturing)
This bill allowed for aggregation of municipalities

15. Program Administration

16. Administrative Flow Process Flow
Program Team informs and educates prospective participants. Participants apply.
Program Administrator processes applications and reviews projects. Approval granted.
Program Administrator provides customized legal documents.
City/County/District places Assessment on property.
City/County/District issues Pooled Bond.
Pooled Bond purchased by a private investor.
Property Owner receives notice to proceed, installs approved project.
Project is confirmed and owner receives payment. RF

17. Financial Structure

18. Key Strategies to Fund Program
Key Financing Elements
Key Strategies to Fund Program
Capital Provider
Municipal Bond Market
Government Funds
Private Financial Institutions
Security
Senior Property Lien
Municipal Credit Enhancements
Repayment Mechanism
Property Taxes
Utility Bill
Separate Billing

19. PACE Abroad

20. PACE Outside the U.S. Melbourne, Australia Vancouver, Canada
Commercial PACE program
Passed new legislation
No bonding capacity, working with private banks
Planned to launch by end of Q1 2011
Vancouver, Canada
Single and multi-family residential PACE program
Amendment needed to pre-existing authority
Planning stage

21. Key Strategies to Fund Program
PACE’s Potential for India
Key Strategies to Fund Program
Demand
Jawaharlal Nehru National Solar Mission
1,000-2,000 Grid PV by 2013
Feed-in Tariff
National Mission for Enhanced Energy
Perform Achieve and Trade mechanism
Lack of sufficient financing mechanisms
Legal Structure
No existing tax assessment authority
Financing Structure
Property taxes
Nascent municipal bond market

22. Key Strategies to Fund Program
Next Steps
Key Strategies to Fund Program
Identify potential security and repayment structure options
Work with legislators to adapt existing legal structure or create new authority
Work with financial institutions to identify appropriate security, financial structure, and capital source
Partner with local governments to pilot

23. Kelley McKanna| kelley@renewfund.com |+1(510) 451-7910
We all know the challenge of climate change. PACE financing is one of the best tools we have to make immediate progress toward meeting our climate change goals. It takes advantage of the best aspects of public-private partnerships to allow individual homeowners and business owners to save money, reduce carbon emissions and create jobs. That’s why so many state and local governments around the country have adopted it in the last year. I’d be happy to address any questions you might have.