B3.3 Property Assessed Clean Energy (PACE)
Develop and adopt commercial PACE program. Assess whether residential PACE is still desirable and, if so, how local and state policymakers could pursue a legislative solution or state constitutional amendment to develop a PACE program.
Washington passed HB 2405 during the 2020 Legislative Session, granting the Department of Commerce the authority to create a voluntary Commercial PACE program that counties may choose to participate in. In order to participate in the program, a county must pass an ordinance adopting the program. (Thurston County has done that.) The counties or the Department of Commerce may choose to have the program administered by “a public, quasi-public, or private third-party entity.” The MRSC has a couple of posts about other issues in implementing the law.
These programs make the repayment of a loan for an energy efficiency improvement into a lien on the property, which is repaid through the property tax billing process, and stays as an obligation of the new owners if the building changes hands. Thirty seven states and territories have established PACE programs.
In the 2019 Legislative session, local Representative Beth Doglio proposed a bill (HB 1796, with Senate companion SB5730) to authorize this financing for energy efficiency, water conservation, and renewable energy as well as for resiliency projects in agricultural, commercial, and industrial properties, and in multifamily properties with five or more units. There are details about the bill and the issues about its legality under Washington’s Constitution at www.waclimateleg.info/hb1796. The ShiftZero Coalition did research in support of the bill.
Alberta has a PACE program for residential and commercial clean energy upgrades. Calgary and some other municipalities are adopting it.
PACENation is a non-profit that tracks residential and commercial PACE programs across the country and provides resources and advocacy for PACE financing.
The Texas PACE Authority (TPA) is a state-wide authority that administers PACE on local municipalities’ behalf. Texas passed enabling legislation (amending the Texas Local Government Code) in 2013 that permits counties and municipalities to work with the private sector to pursue PACE as a method for financing water and energy efficiency improvements.
Multnomah County PropertyFit is a Commercial PACE (C-PACE) program that will finance up to 100 percent of the cost of energy efficiency or energy generation improvements. The program also offers financing for new construction if the project exceeds energy code by 15 percent. Multnomah County Board of Commissioner authorized the program in September 2015, and collaborates with the Portland Development Commission and the Energy Trust of Oregon, with the Development Commission serving as the program administrator.