Over $100 million in capital available through PACE program
Jason Stringer, program planning consultant for the Wisconsin Energy Conservation Corporation, says the state’s PACE program has over $100 million of capital available for financing energy efficiency projects.
PACE -- or property assessed clean energy -- is a financing tool that commercial property owners can use to support investment in energy efficiency upgrades like new HVAC systems, new windows or doors, better insulation and sealing, as well as renewable energy.
“The projects are paid for through utility bills and operating cost savings, so in many cases, the projects will pay for themselves,” Stringer told WisBusiness.com. “It’s got tremendous intrinsic value there, but we’re also promoting sustainability to some extent too.”
WECC is the program administrator for PACE, and facilitates meetings of the commission overseeing the program, which is made up of directors from each county. It also maintains the program’s guidelines as it reviews projects, and recruits capital for participation.
As of this week, 27 Wisconsin counties have approved PACE financing.
Jon Hochkammer, director of insurance operations at the Wisconsin Counties Association, has played a major role in getting the program adopted at the county level all over the state.
“It’s economic development, with no taxpayer dollars involved in it whatsoever, no liability issues for the county,” he said. “It also promotes energy efficiency and energy conservation, which is a good thing as well.”
Hochkammer says it takes four or five visits, on average, to get a county onboard.
“Jon is helping promote, and really helping introduce us to counties,” Stringer said. “That’s really where the work starts. We have a statute, we have a program, and the next step is to get local units of governments to make that financing tool available.”
PACE financing is originated by a private lender, but secured by a property tax assessment, Stringer says. The counties have to authorize the use of their taxing authority for this purpose.
Getting counties to buy in is so important, he says, because PACE Wisconsin offers potential for uniform, consistent application of the financing tool across the state.
“This is important for not only the counties but also the participants in PACE Wisconsin,” Stringer said. “We’re able to work with all these jurisdictions, all these different counties, municipalities, and offer a uniform approach… That’s really attractive to the private sector and lenders.”
Currently, the central task for leaders of PACE Wisconsin is to continue to spread awareness to stakeholders like building owners, lenders and contractors. Each of these groups gets something different out of it.
Stringer says for contractors, it’s a tool to sell more work and larger jobs. For building owners, he says it’s a good way to increase the value of the buildings and boost their cash flow.
“PACE has a lot of unique features to it that knock down barriers to reinvestment in buildings,” he said. “Today, it’s all about getting projects done and educating the market.”
Hochkammer says getting buy-in from local lenders is key, because PACE requires commercial properties with mortgages to get mortgage lender consent -- a restriction he sees a “safety net” in the program.
One local qualified lender, McFarland State Bank, sees this as an opportunity for new potential business, Hochkammer said.
“When they look at projects, they’re already thinking, ‘Since you need mortgage lender consent, wouldn’t it make sense if we had that mortgage on that property?’” he said. “They’re being very active and aggressive with promoting the program -- we’d love to see more banks like that get involved and create more competition.”
Stringer gives credit to a host of partners in the PACE Wisconsin effort, including the PACE Milwaukee program, which he says set the bar for undertaking a statewide expansion.
“We saw that activity, and we thought, ‘Well, they’re doing it in Milwaukee, we have a state statute, let’s put something together so the rest of the state can benefit,’” he said. “That’s where Von Briesen and Roper entered.”
He says the law firm had been involved in PACE financing around the country and knew how it worked, so their involvement supported the development of the organizational documents passed at the county level.
That program framework was approved by the League of Wisconsin Municipalities and the Wisconsin Counties Association. Stringer says the state Office of Energy Innovation and Green Tier Legacy Communities also supported the effort.
Hochkammer says the effort was more difficult in early 2016 when the program was just getting off the ground, but with 27 counties signed on and conversations taking place with others that could join, that momentum is carrying PACE forward.
“Jason and I are willing to go anywhere and talk to anybody about this,” he said. “We believe it’s really the right thing to do.”
--By Alex Moe