Although many of us would love to incorporate renewable energy into our homes and make those energy efficiency improvements that will lower our utility bills, the upfront financing needed can be the roadblock that makes it seem impossible. Today marked a huge win for homeowners as the PACE legislation was signed into law, providing an opportunity for Minnesota homeowners to make those green dreams come true.
Read more below (information via Fresh Energy)
PACE: Financing Small Renewable & Efficiency Projects
Among homeowners and small business owners who clearly understand the long term financial and environmental benefits of installing small renewable energy projects and energy efficiency improvements, one of the biggest hurdles is the up-front cash expenditure needed. One innovative approach is a concept called PACE (Property Assessed Clean Energy). PACE is a low-interest funding mechanism that a municipal financing district or finance company may choose to offer to homeowners or small businesses to cover the up-front costs. The loans are then repaid over a set period of time via an annual assessment on the property tax bill.
The concept is not a new one; it is very similar to tax assessments made for new sidewalks or streetlights, but only applies to an individual property where the improvement is made. The PACE strategy can result in annual individual savings outweighing the annual individual assessments. PACE adds a financing option to individual debt or home equity debt. One advantage is that it avoids the need to utilize personal credit for the loans.
15 other states have already passed legislation that enables local entities to implement PACE financing. This year Fresh Energy has been working to pass PACE legislation in Minnesota - HF 3109 and SF 2720 - to help spur small-scale renewable and efficiency projects and create clean energy jobs. Recently the bill was incorporated into the Omnibus Jobs Bill, H.F. 2695; passed by both houses; and signed in to law by the Governor on April 1, 2010. PACE will help create jobs, improve the housing and building stock in our communities, and lessen demand for energy - thereby reducing the need for expensive new power plants and transmission lines. We eagerly anticipate implementation of this legislation.