MISSOURI FORUM
By Erin Noble
In May, the Missouri General Assembly passed Property Assessed Clean Energy (PACE), a green jobs proposal that makes going green even easier for Missourians.
Up-front cash is often the main barrier preventing people from pursuing efficiency or renewable energy projects like replacing an old HVAC system or installing solar panels. The PACE program creates a huge new market for upgrades and thousands of green jobs in Missouri. The yearly savings on energy bills from the PACE projects outweigh their yearly property assessment, which makes these upgrade projects immediately cost effective.
So how does it work? The PACE program is a financing tool that allows homeowners to pay for energy efficiency improvements and renewable energy installations through a property assessment on their taxes over 20 years. The PACE model provides little risk for lenders as the loans are assessed to the property, carry a fixed interest rate, and stay with the house so if the owner moves the person who purchases the property becomes responsible for the remaining amount.
PACE is a locally implemented program. After a city or county decides to implement a PACE program they set up a Clean Energy Development Board (CEDB). The Board is then charged with designing the program, issuing the low risk bonds, and overseeing which applications are funded. Once a CEDB has been established, home or business owners can begin to apply for PACE financing. Before a Missourian receives PACE financing, however, a certified energy auditor determines which improvements would best save the homeowner money on their energy bills. The audit must show that the estimated savings on energy bills over the life of the assessment will be greater than the cost of the project.
Developed in 2007, PACE enabling legislation has already been passed in 21 states, allowing cities and counties in those states to establish PACE programs. Although the Missouri General Assembly has passed PACE, Governor Nixon still must sign the bill into law. If Nixon signs PACE, cities and counties can begin implementing the program. Then, the demand for certified energy auditors, energy efficient technology manufacturers, and insulation, window, solar, and HVAC installers will greatly increase. In fact, PACE is expected to create 160,000 skilled-labor green jobs nationally -- jobs that cannot be outsourced.
Beyond creating jobs, PACE helps homeowners lower their energy bills and increase the value of their homes through the upgrades. Home energy experts claim that homes with efficiency upgrades have been shown to spend fewer days on the market and sell for higher amounts.
PACE can also help to slow the financial and environmental drain placed on Missouri’s economy from importing and burning coal. According to a recent report from the Union of Concerned Scientists, Missouri currently imports more than 99 percent of the coal used in its power plants. This costs Missouri $1.13 billion a year. This money could, instead, be spent in the local economy either through job creation or local business investments.
Low-income housing, which often has the most desperate need for energy retrofits, can greatly benefit from the program since families who often do not qualify for traditional financing may instead qualify for PACE.
The Missouri Legislature should be applauded for approving PACE. Now the governor must do his part in making the PACE program a reality for Missouri communities. It will save homeowners and businesses money; it will help protect our environment; and it will create thousands of green energy jobs.
-------------------------------------------------------------------------------------Up-front cash is often the main barrier preventing people from pursuing efficiency or renewable energy projects like replacing an old HVAC system or installing solar panels. The PACE program creates a huge new market for upgrades and thousands of green jobs in Missouri. The yearly savings on energy bills from the PACE projects outweigh their yearly property assessment, which makes these upgrade projects immediately cost effective.
So how does it work? The PACE program is a financing tool that allows homeowners to pay for energy efficiency improvements and renewable energy installations through a property assessment on their taxes over 20 years. The PACE model provides little risk for lenders as the loans are assessed to the property, carry a fixed interest rate, and stay with the house so if the owner moves the person who purchases the property becomes responsible for the remaining amount.
PACE is a locally implemented program. After a city or county decides to implement a PACE program they set up a Clean Energy Development Board (CEDB). The Board is then charged with designing the program, issuing the low risk bonds, and overseeing which applications are funded. Once a CEDB has been established, home or business owners can begin to apply for PACE financing. Before a Missourian receives PACE financing, however, a certified energy auditor determines which improvements would best save the homeowner money on their energy bills. The audit must show that the estimated savings on energy bills over the life of the assessment will be greater than the cost of the project.
Developed in 2007, PACE enabling legislation has already been passed in 21 states, allowing cities and counties in those states to establish PACE programs. Although the Missouri General Assembly has passed PACE, Governor Nixon still must sign the bill into law. If Nixon signs PACE, cities and counties can begin implementing the program. Then, the demand for certified energy auditors, energy efficient technology manufacturers, and insulation, window, solar, and HVAC installers will greatly increase. In fact, PACE is expected to create 160,000 skilled-labor green jobs nationally -- jobs that cannot be outsourced.
Beyond creating jobs, PACE helps homeowners lower their energy bills and increase the value of their homes through the upgrades. Home energy experts claim that homes with efficiency upgrades have been shown to spend fewer days on the market and sell for higher amounts.
PACE can also help to slow the financial and environmental drain placed on Missouri’s economy from importing and burning coal. According to a recent report from the Union of Concerned Scientists, Missouri currently imports more than 99 percent of the coal used in its power plants. This costs Missouri $1.13 billion a year. This money could, instead, be spent in the local economy either through job creation or local business investments.
Low-income housing, which often has the most desperate need for energy retrofits, can greatly benefit from the program since families who often do not qualify for traditional financing may instead qualify for PACE.
The Missouri Legislature should be applauded for approving PACE. Now the governor must do his part in making the PACE program a reality for Missouri communities. It will save homeowners and businesses money; it will help protect our environment; and it will create thousands of green energy jobs.
Noble is director of Renew Missouri, a project of the Missouri Coalition for the Environment a 501(c)(3) nonprofit organization.
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Copyright (C) 2010 by Missouri Forum. 7/10
