As an alternative to potentially high-interest bank loans, Ann Arbor's Property Assessed Clean Energy (PACE) program – through which the city finances qualifying energy efficiency and alternative energy installations at commercial properties via bond issues – is now underway. Ann Arbor is the first community in Michigan to have a
program in effect.
Projects in the range of $10,000 to $350,000 per property owner are allowable and include such items as energy analysis; insulation and weather sealing; lighting and lighting controls; heating, ventilation and air conditioning equipment and controls, door and window replacements; solar photovoltaic panels; wind turbines; ground source heat pumps; and combined heat and power systems. Owners then repay the loans through special property tax assessments over several years.
No formal applications have been received yet, but the city is working with three owners whose applications are imminent and also plans on working with several other interested parties this month, says Wendy Barrott, CEC staff member and Ann Arbor's community energy coordinator.
"The Clean Energy Coalition, under contract with the city of Ann Arbor, is out there talking to property owners, business owners, people who already have their energy audits in hand – anyone who would benefit from this program," Barrott says. "We're making a one-on-one outreach to them."
Property owners must have an energy audit done, at their own cost, as part of the application process. A previous audit will waive that requirement in certain cases. Owners may choose to have the audit expense rolled into the assessment.
Four million dollars will be made available over the next six months, and the city has committed to bond up to $10 million over the next year, says Barrott. Should demand over the next six months exceed the $4 million available, "...I'm sure the city will probably re-examine the need and adjust the program to meet the demand."
Also in the pipeline is a possible residential PACE program. That legislation is currently working its way through the Federal Housing Administration, a requirement before adoption at the state level. "I know that there is a commitment on behalf of the city to form a coalition and seek to get residential [PACE], then add it to Michigan's enabling legislation," Barrott explains. "That's coming. It's not resolved yet at the federal level, but we are watching that closely so we can work on it at the state level when it's appropriate."
Source: Wendy Barrott, CEC staff member and community energy coordinator for the city of Ann Arbor
Writer: Tanya Muzumdar