A bill has been introduced in the House that could help localities take advantage of creative clean energy financing mechanisms.
HB 654 (Mugler) authorizes the Department of Mines, Minerals and Energy (DMME) to sponsor a statewide clean energy financing program. More specifically, this legislation would enable DMME to engage with a private entity in order to develop and administer a statewide Commercial PACE program.
PACE (Property Assessed Clean Energy) is an innovative financing mechanism that enables low-cost and long-term funding for energy efficiency, renewable energy, and water conservation projects. The appeal of PACE is that it can cover up to 100% of a project’s upfront hard and soft costs, and then can be repaid on the property tax bill over a period of up to 30 years, enabling longer payback periods that can be cash flow positive from day one. PACE financing is repaid as an assessment on the property’s regular tax bill and is processed the same way as other local public benefit assessments (such as sidewalks or sewers).
So far in Virginia, several localities have enacted their own individual PACE programs. Arlington County was the first local government in the Commonwealth to establish a Commercial PACE program, and soon after Loudoun County and Fairfax County followed suit. While the programs in Arlington County and Loudoun County were designed for renewable energy and energy efficiency projects, Fairfax County’s program is the first to include resiliency and stormwater measures.
Since these first PACE programs were rolled out, other localities have begun to develop their own PACE programs (list of localities here). Additionally, many more have expressed a desire for a statewide program that could be opted-in to. HB 654 will provide that means.
VACo will support this bill as it makes it way through the General Assembly this session.
VACo Contact: Chris McDonald, Esq.