PACE & RECAP : Financing Renewable Energy

PACE & RECAP:

Financing Renewable

Energy

Michelle Hickey, ISEA Program Coordinator

Illinois Solar Energy Association

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Economics of Solar - PACE & RECAP

7/15/2010 Illinois Solar Energy Association

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In the first year net REVENUE of $919.44

What is PACE?

Property Assessed Clean Energy

Enables local governments to finance renewable energy and energy efficiency

projects on private property.

Property Assessed Clean Energy

Enables local governments to finance renewable energy and energy efficiency

projects on private property.


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How PACE Works


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Local Agency

(City or County)

Property Owner

(Residential, Commercial, Industrial)

Provides upfront Project $$ through Bond

Issuance

Loan paid on Property Tax Bill

Property Owner Benefits

• Eliminates upfront costs

• Payments tied to property, not owner

• Save $ on energy bills

• Interest portion of annual repayment is tax deductible

• 20-year financing term matches payback

• Eliminates upfront costs

• Payments tied to property, not owner

• Save $ on energy bills

• Interest portion of annual repayment is tax deductible

• 20-year financing term matches payback


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City/County Benefits

• JOB CREATION

• Meet climate and renewable energy goals

• No debt or credit risk

• Saves money for residents

• 100% opt-in program with no costs to non-participating property owners

• JOB CREATION

• Meet climate and renewable energy goals

• No debt or credit risk

• Saves money for residents

• 100% opt-in program with no costs to non-participating property owners


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Installer Benefits

• JOB CREATION

• Eliminates #1 Barrier to Sales – Upfront cost

• Close more sales

• Reduces focus on ROI

• JOB CREATION

• Eliminates #1 Barrier to Sales – Upfront cost

• Close more sales

• Reduces focus on ROI


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ILLINOIS SB 583

PACE STATE ENABLING LEGISLATION

A municipality may enter into voluntary agreements with the owners of property within the municipality to provide contractual assessments to finance the installation of

distributed generation renewable energy sources or energy efficiency improvements that are permanently fixed to real

property.


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Effective January 1, 2010

ILLINOIS SB 2505

PACE Financing

Property owners may enter into an agreement with Counties & Municipalities (C&M) to finance energy improvements

C&M may levy property taxes in connection with green energy service areas

C&M may issue bonds and may sell, assign or pledge those bonds to the Illinois Finance Authority.


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ON HOLD

ILLINOIS SB 2482

PACE Financial Component

• Amends the IL Finance Authority Act

• Amends Counties Code and Municipal Code

• Amends Special Service Area Tax Law in Property Tax Code

• Provides power to purchase special service area bonds related to green energy special service area projects

• Allows any unit of government to issue special service area financing


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ON HOLD

Where is PACE Now?

Last July, the Federal Housing Finance Agency told Fannie Mae and Freddie Mac to stop underwriting mortgages with PACE assessments.

February 10th – D.C. Staffer briefing on PACE

Many organizations and states are urging Congress to take action and allow states to start PACE programs


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PACE Programs


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PACE Resources

• www.PACENOW.com

• www.Renewfund.com

• Database of State Incentives for Renewables

and Efficiency (DSIRE)


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IL Policy Resources

• Illinois General Assembly• Learn about bills, sponsors, and bill status

• Illinois Board of Elections• Find your legislators and their contact info

• Environmental Law & Policy Center• Midwest’s leading public interest environmental legal advocacy and eco-business

innovation organization

• Illinois Environmental Council• Track bills and legislative updates


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RECAP - Renewable Energy Certificate Aggregation

Program

• ISEA program available to members

• Pays $200/ 2011 Solar REC

• Grid-tied PV systems• Preference to small

systems (<10 kW)


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RECs

Represents the property rights to the environmental, social, and other non-power qualities of renewable

electricity generation.

A REC, and its associated attributes and benefits, can be sold separately from the underlying physical electricity associated with a renewable-based generation source.

EPA Definition


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04/22/23Illinois Solar Energy Association

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Energy & RECs

SRECs

1 MWh solar energy = 1 SREC

For every 1 MWh (1000 kWh) of energy produced by a Photovoltaic system, 1 Solar Renewable Energy

Certificate (SREC) is produced

Average 5 kW system annually generates

6000 kWh = 6 MWh = 6 SRECs

7/15/2010 Illinois Solar Energy Association

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Price of SRECs

2011 Price is $200• Cap of 160 SRECs• 40 PV systems

applied• At Capacity

2010 Price $135• Purchased ~169 SRECs• 30 PV systems• Total payout = $22,767

2009 Price $65• Purchased ~84 SRECs• 20 PV systems• Total payout = $5,437


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Price of SRECs

Need more states to open market up to IL SRECs

Illinois RPS with 6% carve out for solar will help for big installations

Sustainability Plans with teeth


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Thank you!


1281 E Brummel Ave

Elk Grove Village, IL 60007

312-376-8245

www.illinoissolar.org

[email protected]

Documents

PACE & RECAP : Financing Renewable Energy