If we ignore self-generation, three policies are at the center of increasing local control of energy: deregulation (“customer choice”), municipal aggregation (“city choice”), and municipal utilities (“city ownership”). Two recent articles highlight the relative value of these policies quite clearly. The Citizens Utility Board (CUB) of Illinois, a nonprofit ratepayer advocacy organization, just released a… Continue reading
Viewing the energy efficiency tag archive
Click here for a more detailed article. ILSR Senior Researcher John Farrell presents to a big crowd at “Green Ideas and Ham,” a breakfast policy forum in Minneapolis, about the opportunity for the city to dramatically increase its control over its energy future. In a short time, the city’s monopoly energy contracts with its electric… Continue reading
Does a Riverside County, CA, residential energy financing program put thousands of homeowners on a collision course with the Federal Housing Finance Agency (FHFA)? In a proposed rule-making, the FHFA has suggested that Property Assessed Clean Energy (PACE) policies represent a threat to the safety and soundness of mortgages held by government-backed Fannie Mae and Freddie… Continue reading
After effectively suspending residential PACE energy efficiency and renewable energy municipal financing programs in 2010 and then being taken to federal court and required to do a revised rule making, the Federal Housing Finance Agency (FHFA) released its revised ruling on PACE programs [pdf] today. Did they repent from their 2010 assertion that PACE presented… Continue reading
Minneapolis Star Tribune – May 23, 2012 Minnesota spends more than $20 billion a year on energy — primarily importing polluting fossil fuels — and the state’s utilities typically lobby against decreasing our dependency. This hampers our economy and harms our environment. Fortunately, cities don’t have to rely on the Legislature to stand up for… Continue reading
Your mind-blowing chart of the day, courtesy of Arne Jungjohann at the Heinrich Böll Foundation. Source for U.S. use; source for German use; used U.S. average household size of 2.6. Continue reading
With state enabling legislation, cities and counties are being given the authority to establish municipal financing programs for clean energy and energy efficiency investments in their communities. Commonly referred to as property assessed clean energy (PACE) financing, it allows homeowners and businesses to implement dramatic improvements in efficiency and/or renewable energy and repay those investments over a long-term via a special property tax assessment or via a utility bill. Continue reading
Property-assessed clean energy (PACE) financing launched three years ago with great promise. The premise was simple: pay for building energy efficiency and on-site renewable energy with long-term property tax assessments, aligning payback periods and financing terms. The residential program’s rapid expansion came to a screeching halt in mid-2010 when the Federal Housing Finance Agency told lenders that Fannie Mae and Freddie Mac would not buy mortgages with PACE assessments on them.
Commercial PACE was left alive, and programs for business and industry are finally getting scale.
In September, the Carbon War Room announced a business consortium would provide $650 million in financing for commercial energy efficiency and renewable energy improvements for two regions: Sacramento, CA, and Miami, FL. San Francisco announced a similar program in October, with $100 million in private funding. For comparison, the largest operational PACE program to date in Sonoma County, CA, has completed $50 million in retrofits.
An interesting difference in the new programs is that they inject private capital into PACE programs that were often envisioned as publicly financed (e.g. using municipal revenue bonds). It’s a welcome development, however, since public sector programs had grown slowly – if at all – since the FHFA decision to curtail residential financing.
The opportunity in commercial PACE alone is enormous. The Pacific Northwest National Laboratory estimates that building energy consumption could be cut by 15-20% in the United States with the right technologies and tools. Since buildings represent 40% of energy use, beefed up commercial PACE activity could be a big step in the right direction.
For more on the residential program and attempts to revive it, visit PACENOW.org.
A short slide deck providing a “101″ on Property Assessed Clean Energy (PACE) financing, a status update on the legal challenges, and some of the policy design issues we explored in our report on Municipal Financing Lessons Learned.
With a ruling that the Federal Housing Finance Agency (FHFA) must do a formal rulemaking on its 2010 decision to torpedo the innovative local finance tool for energy efficiency and clean energy retrofits, a federal judge gave Property Assessed Clean Energy (PACE) financing new life.
Earlier this year, it looked as if prospects were bleak for PACE in 2011, with some progress on Commercial PACE and a new director at advocacy organization PACENOW, but agonizingly slow steps on federal legislation and litigation.
Today’s ruling means FHFA has to start over, but it does not overturn the agency’s 2010 advisory against PACE, leaving the program in limbo until the formal rulemaking is complete. Here’s hoping PACE finally wins through, a great tool for saving energy and creating jobs at the local level.