Green Innovations

Developing renewable and clean technology companies in New York

Thursday, March 25, 2010

NYS approves municipal loan program for solar

New York State joins 14 other states in the country to pass legislation authorizing municipal loan programs for renewable and energy efficiency improvements on homes and Businesses. Called PACE (Property Assessed Clean Energy) financing, these municipal programs allow homeowners to go solar and make efficiency improvements without any upfront cost.

The programs are entirely voluntary.  There is no requirement for either municipalities to create PACE programs or for homeowners to participate in them.  Both the New York Senate and Assembly voted unanimously in favor of amending state law to authorize municipalities to establish PACE programs, and the legislation was signed into law by the Governor.  Recognizing the model's job creation and economic benefits, the federal government has also recently announced that US $454 Million in Recovery Act funds will be made available to support PACE programming.

Under the PACE program, cities or counties set up special clean energy finance districts capable of issuing low-interest bonds. Participating homeowners use the bond money to cover the costs of renewable energy and energy efficiency improvements and pay the loan back through a long-term assessment on their property taxes.This arrangement spreads the cost of those energy improvements out across a 20-year payment plan that is easily transferable to the next property owner if the current resident decides to move. The property tax assessment is typically less than the electricity bill savings generated by the new solar system, delivering immediate cost savings to the homeowner.The programs are entirely voluntary: there is no requirement for either municipalities to create PACE programs or for homeowners to participate in them.

PACE programs are now allowed by state law in California, Colorado, Florida, Louisiana, Maryland, Nevada, New Mexico, New York, Ohio, Oklahoma, Oregon, Texas, Vermont, Virginia and Wisconsin.