Thursday, February 28, 2013

PACE (Property Assessed Clean Energy) Program

Article 6 of the Cavendish Annual Report (page 10) is asking whether  the voters will designate the Town of Cavendish as a Property Assessed Clean Energy (PACE) District.  To help voters understand what PACE is, the following information has been provided by CCCA.

Key PACE Components
• Innovative financing mechanism for energy improvements through the creation of a
Special municipal assessment district.

Costs the town and the residents NOTHING except for those who use the program.

• PACE focuses on residential energy efficiency and renewable energy improvements.

Major Benefits of PACE Program
• Provides an alternative form of financing for energy efficiency and renewable energy –
especially for people with limited ability to borrow money.

• Investments in energy efficiency and renewable energy support the creation of local jobs
– such as weatherization contractors and solar installers. The more financing
opportunities available – the more energy work for local, qualified contractors.

Basic Program Mechanics
1. A property owner identifies specific energy improvement(s) to make, and applies for the program.

2. If approved, the property owner enters into an assessment contract with Cavendish,
which pays the contractor when work is complete and places a lien on the property.

3. The property owner repays the town as an assessment on the property tax bill over 10, 15, or 20 years, on the same schedule as the town’s tax bill and collected in the same
manner. If the property is sold before the assessment is fully paid, the obligation to pay
stays with the property and it is repaid by the new owner, or it can be paid off in full
with no penalty.

Program Administration
Cavendish can administer PACE or it can contract with Efficiency Vermont to perform
most of the administrative functions. The service costs are incorporated into the
assessments charged to program participants and are not borne by the taxpayers.

Amount of Financing Available Per Home
The maximum amount that can be financed is 15% of the assessed value of the property,
capped at $30,000. The total amount financed by PACE plus any outstanding mortgages
on the property cannot exceed 90% of the assessed value.

Eligible Energy Projects
• PACE can finance renewable energy or energy efficiency improvements as well as repair
or health and safety measures that may be required to secure the energy savings.

• Improvements must be permanently attached to the property and the “net energy”
requirements for the building must be actually reduced. Efficiency projects include
insulation, air sealing, windows, doors, heating systems, etc.

• Eligible renewable energy projects include solar hot water systems, biomass energy
heating systems (e.g. wood pellets/chips and cord wood), small wind systems, microhydro, solar electric system (photovoltaic), and solar space heating systems.

Town Meeting Vote
Voters at town meeting must approve establishing a PACE district. Voters are not
approving the expenditure of any funds or approving their own participation in the
program. An affirmative vote creates the district and thus the opportunity for residents
who decide to do so -- to take advantage of the PACE financing mechanism.

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