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CaliforniaFirst Providing Financing for Commercial Building Clean Energy Projects

Paul Nastu

Fourteen California counties and 126 cities have launched the nation’s largest PACE program, a financing tool to help commercial property owners reduce their buildings’ energy and water use.

The CaliforniaFIRST program, which is a program of the California Statewide Communities Development Authority, allows commercial property owners to use municipal bonds to finance energy efficiency, water efficiency and renewable energy upgrades – which the owners repay through a special assessment on their annual property tax bill. Through a public-private partnership, private capital will be used to supply the upfront funding for the work, so that local government budgets will not be burdened.

CaliforniaFirst says there is huge potential for energy and cost savings in the commercial building market:  “According to U.S. Department of Energy researchers, if all U.S. businesses and institutions conducted cost-effective upgrades, they could reduce their average energy use by 25%.  The total cost of this work would be more than $100 billion – which would be offset as a result of lower energy bills.”

“Commercial PACE gives businesses a great option for pursuing energy efficiency projects that may have previously been out of reach,” said San Diego County Supervisor Dianne Jacob.  “The County’s partnership with CaliforniaFIRST provides a mechanism for participants to start spending less money on energy bills and more back into the business.”

This financing mechanism, called Property Assessed Clean Energy (PACE), was pioneered by the City of Berkeley for its residential owners in 2008.  The residential energy upgrade platform ran into regulatory headwinds in 2010.  But commercial PACE programs have since been launched in local jurisdictions including San Francisco, Los Angeles County and Washington, D.C.

“Building owners are very interested in saving money and energy,” said Beau Engman, Vice President of Commercial Energy Solutions at Johnson Controls, Inc.  “What has been lacking up until now was affordable upfront capital to do the work.  We see PACE as a promising means of financing deep commercial energy efficiency upgrades.”

The program is administered by Oakland’s Renewable Funding. CaliforniaFIRST is a program of the California Statewide Communities Development Authority (CSCDA). CSCDA is sponsored by the California State Association of Counties and the League of California Cities.  More than 500 California cities, counties and special districts are members to CSCDA.



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