New York State Approves Municipal Loan Programs for Solar

New York State lawmakers this week, as part of their special session on the road to passing a budget, unanimously passed 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.

Both the New York Senate and Assembly voted unanimously in favor of amending state law to authorize municipalities to establish PACE programs. 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. The deadline for municipalities to apply for federal PACE funds is December 14, 2009.

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.

Advocates at the national grassroots organization Vote Solar applauded the Governor, New York legislators, and Rep. Steve Israel (D-NY) for their leadership in passing this exciting piece of clean energy legislation.

“PACE programs effectively remove the single greatest barrier to solar adoption – upfront cost. That makes PACE an incredibly powerful tool for driving new economic opportunity, supporting green job growth and making real progress in the fight against climate change,” said Shaun Chapman, east coast campaigns director for Vote Solar.

“Thanks to leadership from Governor Paterson and the State Legislature, New York can now take advantage of this innovative approach to clean energy finance. Congressman Israel also deserves special recognition for his particular commitment to advancing this bill and New York’s renewable energy future. I look forward to seeing local governments throughout the state implement PACE and pass its many benefits on to New Yorkers.”

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