Last month GBA presented an overview of the Recovery Through Retrofit Report, an analysis prepared by the White House that identified three barriers to the formation of a national retrofit market and three ways those barriers could be overcome.
On Monday, the New York State legislature, with the support of Governor David Peterson, took aim directly at one of those barriers – inadequate access to retrofit financing – with the passage of a bill authorizing municipalities to establish programs that will finance energy efficiency improvements, including the installation of renewable-energy systems, across the state.
The financing mechanism, known as Property Assessed Clean Energy (PACE), is supported by federally funded programs, including the Department of Energy’s State Energy Program. PACE has already been adopted for use by dozens of municipalities, including some in New York, and also has been authorized for full deployment by 14 other states.
Advancing green financing
Financing for PACE programs is raised through bond issues. Homeowners tend to favor PACE loans because the application process is fairly simple, transaction costs are relatively low, and the loan payments, which are added to the property tax bill of the house being upgraded, are spread out over relatively long period of time – usually 15 to 20 years.
New York lawmakers hope the new bill will not only reduce the state’s carbon footprint, but encourage the creation of jobs in the energy efficiency and renewable energy fields. And if energy efficiency advocates have their way, the bill will be just a first step toward eroding barriers to retrofit financing.
“PACE is a powerful tool for advancing energy efficiency retrofits, creating badly needed jobs and reducing global warming pollution,” Ashok Gupta, director of energy policy for the Natural Resources Defense Council, said in a statement. “New York has taken an important first step on PACE and we look forward to working with the legislature and the governor to quickly expand the scope of this bill beyond PACE programs relying on federal assistance.”