The state of Michigan is on the verge of exploding with PACE projects, according to Andy Levin, president of Levin Energy Partners LLC. Levin, who promotes PACE through the company’s Lean & Green Michigan program, says nearly 10 energy management improvement projects in Michigan have taken advantage of PACE, with five to 10 more coming this year.
PACE – the Property Assessed Clean Energy Program – offers property owners long-term loans for energy upgrades at fixed interest rates that owners can repay through their property tax bills. The program is currently financing as much as $450 million in projects in the US, according to Levin (via Crains Detroit).
Whitney Restaurant to Save $450K
The owner of the historic Whitney Restaurant in Detroit spends about $95,000 in electricity and $25,000 in natural gas annually, but with a PACE loan of more than $860,000 that will pay for a more efficient heating and cooling system, the restaurant expects to save big. The new systems are expected to save $86,000 in annual utility costs – a 25% savings – but will also significantly reduce the $100,000 per year the restaurant spends on maintenance for mechanical systems.
Overall, the Whitney can expect to save about $450,000 over 20 years.
In addition to new heating and cooling systems, the Whitney will get 1,600 LED chandelier bulbs, 214 new storm windows, and new building controls and kitchen equipment.
The Whitney is the first energy improvement project in Detroit’s Wayne County to receive financing from PACE.
Petros PACE Finance closed on the $863,130 loan with The New Whitney Real Estate. Petros is one of the first specialty finance firms in the US to dedicate all of its resources to the commercial PACE market nationwide, the company says.
Garfield Metro Medical Building to Increase Tenancy
A 20,000 square-foot building in Clinton Township is also beginning an energy-efficiency project financed by PACE. The upgrades to the buildings’ heating and cooling systems, lighting, controls and window insulation, are expected to save up to 20% or more on utility bills, owners say.
The building’s HVAC and lighting systems are 30 years old and the cost of replacing them could be prohibitive for the family-owned building. Last year, the family explored bank financing but wasn’t able to make it work. The $249,000 PACE project will not only allow for vital upgrades, but will help the family increase occupancy from about 60% to as much as 90%.
Not All of Michigan Participates
But PACE programs don’t exist in every region of the state, as they must be approved by local governments. For example, housing developer Jeffrey Dombrowski is attempting to lead clean energy programs in West Michigan, but a key question will be whether city or county officials permit PACE financing. Local officials say there isn’t sufficient interest among developers. “The ability to learn PACE and what it means is a little daunting,” Dombrowski admits. Still, he believes it is only a short time until PACE is embraced in that region (via Midwest Energy News).