This past fall, Washington, D.C., made headlines when it utilized property-assessed clean energy (PACE) funding to add solar, high efficiency energy and water systems, and LED lighting to the Phyllis Wheatley YWCA affordable housing complex as part of a $17 million renovation. The YWCA redevelopment is the first project to use PACE financing for a U.S. Department of Housing and Urban Development (HUD) assisted mixed-finance public housing property. Despite growing from a few million dollars in project closings in 2008 to nearly $2 billion in projects in 2015, PACE has more commonly been used by commercial buildings or individual homeowners. The YWCA project and those like it set a new path for PACE to be utilized by affordable housing programs, and allows for the economic benefits of clean energy to be felt by those who need it most.
The U.S. Department of Energy-funded CivicPACE team is working to make PACE financing available for low-income housing and other civic institutions nationwide. Through this initiative, the CivicPACE team — The Solar Foundation, Urban Ingenuity, and Clean Energy Solutions Inc. — provide a critically needed tool for directly addressing the underwriting and access challenges inherent in PACE financing for tax-exempt organizations on projects that are otherwise economically and environmentally beneficial.
As the President of the Business Council for Sustainable Energy (BCSE), I’m excited that our member companies and associations represent many of the clean energy technologies eligible to take advantage of PACE financing. This is one more arrow in the proverbial quiver needed to deliver increased deployment of these affordable and accessible clean energy and energy efficiency technologies.
The PACE financed solar and energy efficiency upgrades to the Phyllis Wheatley YWCA housing complex will take the renovated facility beyond basic building code. Project improvements include: solar PV, efficient HVAC systems, heat recovery system, LED lighting, Energy Star appliances, and low-flow water fixtures. In total, the renovations will reduce energy use across the complex 24 percent and lower water use 47 percent to create nearly $6,000 in reduced annual operating costs and a net $90,000 utility savings over the project lifetime. The combination of added renewable energy and energy efficiency improvement will reduce annual emissions by 114 metric tons of CO2.
In a recent conversation with BCSE-member Jared Blum, President of the Polyisocyanurate Insulation Manufactures Association (PIMA), he commented that the utilization of the PACE program in assisted, public housing is priming the pump of initiatives to take sustainable building practices into heretofore ignored markets, and benefitting a population for whom such improvements can enhance their quality of life.
PACE legislation, which allows building owners to finance clean energy upgrades as a line item on property tax bills, is on the books in 31 states and D.C., but projects have been largely limited and mainly on commercial properties. Tax-exempt entities represent a significant opportunity to expand the use of PACE in these states as well as provide funding for valuable improvements to organizations that may otherwise not have a viable funding source and may benefit the most from resultant economic savings. Nonprofits also contain the potential for significant solar energy deployment.
There are 1.6 million nonprofit organizations in the U.S. according to the 2012 Nonprofit Almanac, 52.2 percent of which are estimated to be property owners per The Urban Institute. Using Environment America’s estimate that 60 percent of U.S. commercial roof space can support solar PV and the Solar Energy Industries Association’s average non-residential system size of 100 kW, there is the potential to access 50 gigawatts of new commercial solar capacity on civic institutions. Certainly, there will be technical and other unforeseen barriers to reaching our sustainable energy future, but CivicPACE and similar innovative financing tools can help get us there faster.
On March 24, 2016, the Business Council for Sustainable Energy will be hosting the CivicPACE Team, leaders in sustainable energy, and a representative from the Washington, D.C., Department of Energy and the Environment to discuss the YWCA project and how more disadvantaged communities can connect with sustainable energy through PACE financing. REGISTER HERE
Lead image: Commercial-scale solar. Credit: Shutterstock.