Over the last two years, PACE (Property Accessed Clean Energy) financing has been hit with many pitfalls including issues with Fannie and Freddie. A new, dynamic, implementation method for cities and counties has arisen that works with Public Owned Utilities (POUs), Independently Owned Utilities (IOUs) and local governments, to meet California’s 33% statewide renewable portfolio standard established by AB 32, to be achieved by 2020. This implementation method also will operate to supplement the Energy Commission’s standards promulgated under SB 1368.
In order to meet the goals and objectives of the landmark AB 32 and SB 1368 laws and ensure the greatest environmental and economic benefits to the State and its citizens, it is clear that work will have to be done to simultaneously generate renewable energy at existing and future buildings. Private equity organizations, POUs, IOUs and local governments can play a major role in the financing and constructing of these off-utility-site improvements.
The proposal would entail establishing a methodology for private equity organizations, POUs and IOUs to work with cities and counties, to generate wind and solar energy at existing and future residential and non-residential buildings throughout the State. Such cooperation working with the utilities and Public Improvement Districts (PIDs), would permit the granting of a credit to utilities to meet the renewable energy portfolio standard of achieving 33% renewable energy by 2020. The utilities and the PIDs would assist in the construction and/or financing of individual building renewable energy systems, thus earning renewable energy credits toward the 33% goal.
The firm, Freilich & Popowitz, has come up with an innovative methodology for individual property owners to voluntarily join PIDs, established throughout cities and counties, to finance the construction of on-site renewable energy systems by virtue of utility cooperation in the issuance of PID bonds. The entire system is supportable through the “negawatts” saved by the property owners from their existing power usage rates, which is sufficient to finance and amortize the renewable energy system installation and operation costs. With cooperation by the utilities, in covering any defaults by property owners, the bonds will be bankable and will not require extraordinary interest rates to be saleable. The savings to the utilities from not having to generate all of their renewable energy from existing power plants, or building new plants, would far exceed the cost of covering the few properties that fail to maintain assessment payments to the PID. The system is far superior to the current PACE program sought to be utilized by local governments throughout the State.
Freilich & Popowitz www.freilichpopowitz.com are the leading land use attorneys and planners in California and the nation and has worked in multiple land use and sustainable, green development and renewable energy systems for over 250 state, county and city governments throughout the nation.
An authhor of the recent book, From Sprawl to Sustainability: Smart Growth, New Urbanism, Green Development and Renewable Energy (American Bar Association 2010), Robert Freilich was successful in establishing the growth management movement in the United States in developing and litigating the constitutionality of the first growth management system in the New York Court of Appeal and U.S. Supreme Court. Freilich & Popowitz have also represented over 20 California clients, public and private, in developing growth management and sustainability systems.
Francie Finn Energy Consultant firstname.lastname@example.org