SB 77: Property Assessed Clean Energy (PACE) Bill

No. of Jobs

10,500

Category

Expanding jobs in the new economy

Proposal

This bill will spur the creation of thousands of jobs and reduce the cost of consumer and small business loans for energy improvements - a benefit for workers, consumers, businesses, and the environment.

Summary

This bill will create a state program to standardize Property Assessed Clean Energy (PACE) programs to lower financing costs, enhance investor receptivity of the PACE bonds, and make PACE improvements more attractive to home and business owners. The bill will authorize a $50 million reserve fund available as credit enhancements for qualified PACE financing programs to further lower financing costs.

Background

One of the most promising new financing mechanisms for property improvements is called Property Assessed Clean Energy. PACE allows commercial and residential property owners to finance energy retrofits using bonds and/or loans, with repayment via assessments added to their property tax bill. Using the PACE loans, home or commercial property owners can lower energy bills and generate positive economic returns.

The measures instituted through this bill will help PACE loans attract more financing at less expensive rates. The benefits of accelerating PACE lending include the following:

• More jobs - Estimates indicate the program could help leverage $1 billion in private investment revenue and create 9000 job-years of direct employment and up to 20,000 job-years of total employment. This will assist one of the hardest hit labor markets – construction workers.
• Increased state revenue – Increasing the installation of both energy efficiency products and renewable energy generation could provide an estimated $54 million in new state revenues. Sales tax is generated on purchased equipment, while greater employment generates income tax and lowers unemployment insurance costs.
• Homeowners and small business owners will save money – both residential and commercial building will have lower energy bills, while experiencing lower financing costs for the improvements.
• More available income - The cash savings equals more disposable income and increased profits. Research by Next10 shows every dollar diverted from energy bills and into disposable income has 50 times more economic value.

Less pollution — California’s building stock will see a significant improvement in energy efficiency, reducing energy demand and pollution.

Read the Bill