A new program that would make it easier for businesses to finance energy improvements is on its way.
The Connecticut General Assembly last month approved the creation of a Commercial Property Assessed Clean Energy (C-PACE) program to make getting clean and efficient energy loans simpler. The program is scheduled to launch in early 2013.
“The cost of energy in Connecticut is a big pressure in this state, both for very large and very small businesses,” said Eric Brown, director of energy and environmental policy at the Connecticut Business and Industry Association. “Becoming more energy efficient is one of the best ways to reduce energy costs.”
Building off programs in roughly 30 states, C-PACE will offer commercial and industrial businesses low, fixed-rate loans tied to businesses”™ property taxes. Cities in Connecticut will have to opt into the program through the Connecticut Clean Energy Finance and Investment Authority (CEFIA), which will design and oversee the project.
According to the New England Clean Energy Council ”“ whose leadership greatly supports the program ”“ reducing energy consumption by 20 percent in one of every 10 buildings in Connecticut would:
Ӣ create 1,230 direct jobs and 6,150 indirect jobs;
Ӣ reduce energy bills by $43 million per year;
Ӣ generate $6.5 million in state and local tax revenue annually; and
Ӣ save 273 million kilowatt hours of electricity annually.
Brown said businesses have been very interested in efficient energy upgrades, but that finding the initial capital has been the No. 1 barrier.
“Times are tough and there is not a lot of capital around for investment,” Brown said. “Energy costs are one of the most significant costs to a competitive business. Things they can do to save on their energy costs are going to be important for them to remain viable and competitive.”
Working on PACE programs around the country, Jessica Bailey, an energy program officer with the Rockefeller Brothers Fund, predicted that the Connecticut program would be very successful because of its two unique qualities. First, that it would be managed on a statewide platform through CEFIA instead of by individual cities and second, because of the support from the banking community.
Connecticut is the first state to have worked with the banking community on the program from the onset. By including the banking, municipality and business communities, the program is to be beneficial for everyone, Bailey said. Bankers will have secured loans through property tax repayments, cities will have reduced their energy consumption and businesses will have reduced their energy bills, saving money in the long run.
“The Connecticut program has learned from examples around the county,” Bailey said. “That”™s why I think the program in Connecticut will be quite successful.”
The largest PACE project under way is in Sonoma County, Calif. Late last month the program”™s chief administrator testified to a U.S. Senate committee that wide-scale PACE program adoption might be the single most effective measure that can currently be taken in the area of energy efficiency.
“In the past three years, (PACE) property owners have completed more than 1,600 energy efficiency projects and 1,000 solar installations,” said David Sundstrom, auditor and controller in Sonoma County. “This has given Sonoma County one of the highest kilowatt-hour per capita solar energy production rates in the country.”
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