Louisiana Property Assessed Clean Energy (PACE) FINANCING MODEL FOR ENERGY EFFICIENCY, RENEWABLE AND SOLAR TECHNOLOGY.

Transcription

1 Louisiana Property Assessed Clean Energy (PACE) FINANCING MODEL FOR ENERGY EFFICIENCY, RENEWABLE AND SOLAR TECHNOLOGY December 10, 2009

2 The Landscape & Challenge Governments view clean energy projects key to: Reducing energy costs and carbon emissions reduc?on goals Providing green jobs and economic s?mulus Buildings are responsible for 35% of energy use and carbon emissions in the U.S. $520B investment in EE by 2020 would yield savings of $1.2T and 1.1 gigatons of GHG. (McKinsey Report, 2009) Greatest barrier to adop?on for exis?ng buildings is the upfront capital cost of clean energy projects

3 Property Assessed Clean Energy (PACE) Financing Solu?on to Upfront Cost Barrier Installa?on of clean energy projects with no upfront costs Capital costs repaid on property tax bill up to 20 years Technology agnos?c (solar PV, energy efficiency, HVAC, etc) Property type agnos?c (residen?al, commercial, industrial) 3

4 How PACE Works $$ Upfront Project Cost through Bond Issuance Local Agency (City, Parish, or Development Authority) $$ Repaid on Property Tax Bill Property Owner (Residen?al, Commercial, or Industrial) Voluntary Program established by local agency that allows property owners to install solar and energy efficiency projects with li_le or no upfront cost. Municipality in partnership with a program team and private capital provides project costs through bond issuance. Costs repaid by property owners on property tax bills for up to over 20 years.

5 PACE Financing Benefits Property Owners No upfront costs; costs paid by issuance of municipal bond Transferable; property tax obliga?on transfers to new owner if property is sold Interest por?on of annual repayment is tax deduc?ble 20 year financing term matches benefits stream U?lity bills decrease due to energy savings Ci?es and Coun?es Ci?es and coun?es can meet their climate and energy goals Municipal bond financing mechanism known to local governments and bond market Tax neutral and no exposure to a city s General Fund Promotes local green economic development and job crea?on 100% opt in program with no costs to property owners who do not par?cipate 5

6 PACE Programs & Legisla?on 4 programs launched in late 2008 and early 2009 in California and Colorado 9 programs under development in California 13 states have passed legisla?on to implement municipal clean energy program 6

7 PACE Program Federal Government Support ARRA allows ITC tax credits for municipal financing $2.3 Billion Energy Efficiency Conserva?on Block Grant funding available to support launch of PACE Waxman Markey bill provides addi?onal incen?ves for clean energy municipal financing Clinton Global Climate Ini?a?ve and VP Biden both announced the PACE financing model as key to retrofit of na?on Whitehouse issued PACE policy framework 7

8 PACE Program Local Support Renewable Funding to be named as New Orleans Solar America City Partner and will receive grant money to assist with design and legal costs associated with the PACE program in Louisiana approximately $185,000 PACE Program will be named as a key tool in the Louisiana Department of Natural Resources Submi_al to the state and will include a funding request to support the development of the program 8

9 Louisiana Opportunity Popula3on Owner Occupied Units An3cipated Annual Bond Issuance State 4,344,053 1,093,882 $437M Baton Rouge 301,016 46,571 $18.7 M New Orleans 224,555 50,743 $20.2 M * Assumes 2% penetration and $20K project

10 Louisiana Legal Considera?ons Legal Authority SB 244, authored by Gautreaux and signed by Governor 7/6/09 Authorizes crea?on of sustainable energy financing districts by local government and provides for issuance of bonds and property assessment programs for solar and energy efficiency projects District must be formed by Parish or City Exis3ng Mortgage Contract Homestead Exemp3on

11 Louisiana Implementa?on Team Legal: Jones Walker Legal Authority, Process, & Documents Design: Renewable Funding Crea?ng economies of scale Program aligned with local community Financing: Renewable Funding & Sisung On demand bond financing for small projects Bond underwri?ng & placement Marke3ng: Renewable Funding & Community Organiza<ons Property Owner outreach and customer service Customized materials and website plaoorm Administra3on: Renewable Funding Aligning stakeholders Reducing burden and costs to local government

12 Louisiana Process District Formation: City or parish creates sustainable energy financing district and adopts resolution to join LCDA PACE Program Program Launch: LCDA in partnership with local agencies and program team launches PACE program Property Owner Application: Property owners voluntarily sign-up for financing and install clean energy projects Project Financing: Proceeds from PACE Bond issued by LCDA provided to property owner to pay for energy project Repayment: Property owner repays bond through property tax bill up to 20 years

13 Program Team Contacts Renewable Funding Mimi Frusha, COO Sisung Capital John Mayeaux, Vice President Jones Walker Fred Chevalier