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.
Illinois Solar Energy Association
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How PACE Works
Illinois Solar Energy Association
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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
Illinois Solar Energy Association
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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
Illinois Solar Energy Association
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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
Illinois Solar Energy Association
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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.
Illinois Solar Energy Association
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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.
Illinois Solar Energy Association
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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
Illinois Solar Energy Association
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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
Illinois Solar Energy Association
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PACE Programs
Illinois Solar Energy Association
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PACE Resources
• www.PACENOW.com
• www.Renewfund.com
• Database of State Incentives for Renewables
and Efficiency (DSIRE)
Illinois Solar Energy Association
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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
Illinois Solar Energy Association
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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)
Illinois Solar Energy Association
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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
Illinois Solar Energy Association
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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
Illinois Solar Energy Association
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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
Illinois Solar Energy Association
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Illinois Solar Energy Association
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Thank you!
Illinois Solar Energy Association
1281 E Brummel Ave
Elk Grove Village, IL 60007
312-376-8245
www.illinoissolar.org