July 16, 2013
New funding for renewable energy projects to become available
The City of Cincinnati is planning a financing program, PACE– Property Assessed Clean Energy, which will help Cincinnati’s businesses invest in renewable energy and energy efficiency projects. The cost of an energy project is advanced as a loan and assessed against real property. Loan payback, then, takes on the characteristics of a mortgage.
PACE supporters emphasize that the energy savings will outweigh the cost of the project. In addition, PACE facilitates investment in advantageous projects that frequently have payback times with a more distant horizon vis-à-vis demands, for a quick ROI. All project costs – from engineering to permits to construction – can be rolled into the original loan. In theory, a project can be built with little or no upfront capital.
Solar panels atop Findlay Market
The owner of an office building, for example, might want to invest in major energy upgrades. That cost would be added to tenants’ rents, but rents would be beneficially impacted by lower energy costs. If the building were sold before the bonds were paid, the new owner would take over bond payments.
In Cincinnati, program funding will be handled by the Port Authority. If an office building owner has a project, the Port would be approached as financier. Upon approval, the Port would advance the money to the building owner. The property tax on the building would increase. That increment would be paid to the Port so that new loans could be funded. Supporters expect most PACE projects will be $250,000 +. The payback period can be as long as 30 years. However, payback cannot extend beyond the expected or engineered life of the project. Cincinnati is finalizing the operational details for PACE.
Citing PACENow‘s definition of PACE, the City’s motion states:
Major benefits of PACE are that it: saves consumers money on utility bills; is tax neutral, with no exposure on the general fund; promotes local jobs; conserves fossil fuels; improves air quality; and reduces C02 emissions.
Watch for updated announcements about PACE this fall. The City is developing a list of projects interested in PACE funding. If this is an opportunity that would help with your commercial building, please contact Tom Ewing at 513-579-3176 or firstname.lastname@example.org.
Interested in Cincinnati's efforts to become a greener city? Check out City Beat's April article, Shades of Green: 10 Reasons Cincinnati is Greater Than You Think. The piece highlights a new website from Green Umbrella, partner of the Chamber's Agenda 360 initiative, that offers a comprehensive list of green happenings around the city.