Milwaukee is allowing commercial building owners to fund energy efficiency improvements through a commercial Property Assessed Clean Energy (PACE) program.
Milwaukee’s Economic Development Corporation is working with California-based Clean Fund to finance the energy efficiency projects for commercial buildings via PACE.
While some PACE programs allow local governments to sell bonds and use the proceeds to help property owners make energy efficiency improvements; and then the improvements are paid back as part of the building owner’s property taxes, John Kinney, CEO of Clean Fund said the Milwaukee model is a little different.
“The distinction is: this is not Milwaukee putting up public funds,” said Kinney. “This is private capital funds.” Clean Fund expects to invest about $100 million over three years. The city is helping by allowing the loan payments to be re-paid on building owners’ property tax bills over 20 years.
Kinney said financing is an obstacle for building owners because it’s sometimes difficult to borrow for an energy efficiency improvement, using HVAC equipment for example, as the collateral. But property taxes, on the other hand, are very attractive collateral for lenders.
Clean Fund will be working with Milwaukee-headquartered Johnson Controls.
“They (Johnson Controls) are not exclusive, but they are going to be the leader in identifying energy efficiency improvement projects and completing them,” said Kinney.
PACE in Milwaukee is part of the city’s new sustainability plan, ReFresh Milwaukee, which includes a pledge by the city that 5 million square feet of commercial building space will cut its energy intensity 20 percent by 2020.