PACE financing helps New York meet energy goals
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New York State will boost its support of Property Assessed Clean Energy (PACE) financing to help meet Gov. Andrew Cuomo’s energy and climate goals.
The state has made recommendations to strengthen the existing Energy Improvement Corporation (EIC) administered commercial PACE program, and added support for a new New York City Energy Efficiency Corporation (NYCEEC) administered C-PACE program.
A broad coalition of energy and environmental groups and businesses applauded the New York State Research and Development Authority (NYSERDA) and the New York Department of Public Service (DPS) for their support of these key policy tools that will help to meet Gov. Cuomo’s ambitious energy efficiency target for the state. In less than a decade, PACE, a free-market financing tool facilitated by a unique public-private partnership, has become one of the most successful drivers of energy-efficiency and renewable-energy improvements to homes and other buildings in U.S. history.
In a new white paper titled “New Efficiency: New York,” NYSERDA and DPS recommended that the state "promote the statewide availability of Residential PACE financing with appropriate, necessary consumer protections and regulation of PACE administrators in New York." The white paper notes that "NYSERDA and EIC recently worked with the legislature to amend New York’s PACE enabling legislation to make the State’s C-PACE market more accessible to property owners, third-party capital providers, and clean energy developers, which should help the C-PACE market achieve scale more quickly."
“The Cuomo administration has set the stage for New York to launch a residential PACE program, bring C-PACE to New York City, and strengthen its existing C-PACE program throughout the rest of New York, which is great news for all building owners, local contractors and manufacturers, and communities interested in reducing emissions and saving energy,” said PACENation Executive Director David Gabrielson. "PACE can play an important role in helping New York achieve its ambitious renewable and energy-efficiency targets. We fully support the creation of a residential PACE program with robust consumer protections, including the ability to pay standards, that serves homeowners and strengthens local communities. We're excited that commercial PACE will soon be available statewide.”
Based on a unique public-private partnership model, PACE financing empowers building owners to make energy and efficiency improvements and pay for them over time at a competitive, fixed interest rate through an additional, voluntary line item on their property taxes.
Since its adoption a decade ago, the owners of over 200,000 homes in California, Florida and Missouri have used PACE financing to go solar, install efficient HVAC systems and insulation, replace inefficient windows and doors, and make other qualifying upgrades.
Because PACE spurs demand for local contractor services, it’s estimated that PACE has also created more than 40,000 good-paying local jobs in communities across the United States. PACE-financed improvements are also projected to save homeowners billions of dollars on their utility bills while reducing greenhouse-gas emissions by millions of tons. Importantly, because PACE financing relies on private capital, these economic and environmental benefits are achieved at no cost to local government budgets.
Iain Campbell, Managing Director, Rocky Mountain Institute (RMI), said, "RMI welcomes NYSERDA's recommendation to create a Residential PACE program in NY which will provide homeowners in the state an energy-efficiency, clean energy, and resiliency financing tool. We believe creating and enabling a Residential PACE program in the state with the requisite consumer protection best practices will be a win-win solution for all New Yorkers. Residential PACE will not only help bolster economic development in the state by creating local jobs but also help the state in achieving its climate goals using private capital. Homeowners will be the biggest beneficiaries of such a program and can have access to longer-term energy efficiency and clean energy financing as they look to retrofit their homes to be more energy efficient, comfortable, and resilient."
New York's EIC administered C-PACE program now serves over 40 municipalities throughout the state, with more enlisting. New York City, however, requires City legislation, which the Cuomo Administration supports. Nationwide, C-PACE financing is offered in 20 states and the District of Columbia and well over 1,000 commercial, industrial, not-for-profit, multi-family housing and agricultural properties have benefited from PACE financing.
Mark Thielking, Chairman of the Energy Improvement Corporation, said, “PACE Financing provides an important tool to the building owners of New York State by financing the upfront cost of improvements that reduce fossil fuel energy usage and lower costs while improving New York's communities. Energize NY is ready to help accelerate the adoption of clean energy improvements and achieve Governor Cuomo's 2025 energy efficiency targets by facilitating PACE Financing within our member municipalities."