C40 in newly-launched “alliance” to standardize, advance PACE financing programs globally
In an effort to make financing for energy upgrades of commercial buildings more widely available and accessible, C40 has joined leaders and experts in Property Assessed Clean Energy (PACE) financing to share and standardize the use of this innovative mechanism with C40 Cities around the world.
The “Commercial Clean Energy Financing Alliance” includes the C40, in partnership with the Clinton Climate Initiative (CCI), the City of San Francisco, Los Angeles County, the California Statewide Communities Development Authority, and the Florida Green Finance Authority, and also has support from influential private stakeholders in the PACE market including Wells Fargo, Johnson Controls, Clean Fund, and Renewable Funding.
Scott Henderson, Director, Finance, C40-CCI, said of the Alliance’s model PACE program:
“PACE is fundamentally a local government initiative that leads to significant energy savings and the creation of construction and engineering jobs,” “We believe the Alliance’s model PACE program – and its use of industry best practices – will further standardize PACE financing, making it more attractive to building owners, capital providers and contractors as they work across jurisdictions.”
PACE financing is an important tool in encouraging and rewarding commercial property owners for owning and managing more sustainable buildings. PACE programs help owners pay for the upfront costs of energy upgrades, such as solar PV panels and energy and water efficiency measures, which the property owner then repays over time through a voluntary tax assessment. Voluntary tax assessments attach to the property, not the owner, and can extend project paybacks for up to 20 years. The attractive rates and longer payback periods of PACE financing allow property owners to undertake deeper investments that yield deeper energy cost savings.
C40 is facilitating the global reach of the Alliance by offering the group’s expertise and tools to cities in the C40 Sustainable Infrastructure Finance (SIF) Network, an action-oriented working group of C40 cities that are exploring, sharing and forging innovative approaches to climate finance. The SIF Network, which launched in March 2012, is co-chaired by the Cities of Chicago and Basel. Alliance members commit to sharing their knowledge, best practices, and tools for PACE program implementation with interested cities. This support might include sharing transaction documents to reduce program start-up costs; advising on legislative strategies; or defining standardized approaches to investors and mortgage lenders.
Mayor Ed Lee of San Francisco, which is a member of both the Alliance and the C40 SIF Network, had this to say:
“San Francisco has been a driving force for PACE adoption, allowing our local commercial building owners an opportunity to pay long-term for upfront energy efficiency savings. By working together with other major California PACE leaders, we hope to set standards and guidelines that will make it easier and more cost-effective for commercial property owners everywhere to make energy improvements.”
Together the Alliance members have existing programs that represent more than 100 local governments and approximately two-thirds of the population of California. By working collaboratively – and in partnership with private sector contractors, financial providers, and others – the Alliance members’ existing programs will create the largest joint energy financing market for private buildings in the U.S. Offering support and expertise to other global cities interested in PACE, the Alliance stands to greatly advance the global green building movement.