The idea for the program, Property Assessed Clean Energy (PACE) originated in Berkeley, and San Francisco will begin implementation in March. Through the program, $150 million dollars in bonds will be available for property owners who want to make renewable energy, energy efficient and water conservation improvements. The loan is then paid off through a voluntary assessment on the property taxes over the course of 20 years. The loan stays with the property, rather than the homeowner. The new homeowner will also reap the energy efficiency and reduced utility bills as the previous homeowner.
The money from the bonds are meant to off-set the high upfront costs of installing renewable energy improvements, such as installing solar panels. Residents are given the option of switching to renewable energy even if the transition to do so would normally not be financially possible. This can have a remarkable impact on our greenhouse gas emissions. The graphic below, from the Pew Center on Global Climate Change, illustrates the huge amount of energy that buildings in the United States use.
Figure 1: Buildings Share of U.S. Primary Energy Consumption (2006)
PACE advocates also claim that this can be a way to stimulate the economy and create green jobs, while meeting the needs of residents who are eager to make energy efficient improvements to their properties or transition to renewable energy. However, the huge upfront cost is often cited as a significant barrier to making these upgrades. This program solves that problem while also ensuring that people of different means are able to reap the benefits of lower utility bills and reduced emissions.
All of this happens without demanding additional funding from municipalities. When the economy suffers, it is easy to neglect or set aside concerns about the environment in an effort to create more jobs or stimulate economic growth. This program prevents local governments from having to make that choice without depleting their limited financial resources.
The support for PACE programs has been significant. Scientific America named it one of twenty ideas that will change the world, and 16 states have adopted similar programs. This includes the city of Milwaukee in Wisconsin, with a program named Me2.
With so much support behind this program, and its seemingly win-win method of achieving environmental protection, creation of green jobs and environmental justice all without relying on extra funding from cities with limited financial resources, should Minnesota consider adopting PACE for its cities?