In an article highlighted on NJSpotlight as part of an end-of-the-year series of reflections by former NJ governors, Governor Jim Florio writes:
A relatively new program — PACE, which stands for “Property Assessed Clean Energy” — has taken hold in places like Connecticut, California, and Florida and is literally funding thousands of necessary energy efficiency and green energy projects with private capital. And a project in Livingston, New Jersey, is now in its early stages.
The essence of a PACE program is its use of a municipal special property tax assessment to attach the financing to the property, not the owner. This assessment mechanism uses a municipal-government power, but does not cost the municipality a dime. Typically, these projects more than pay for themselves through energy savings, and they provide greater self-sufficiency and reliability, as well as more comfortable and more resilient buildings.
In fact, more than 30 states have now adopted PACE legislation, and in several it has already resulted in significant private investment. Connecticut, which launched a state-funded program in January of 2013, already has $15 million of projects completed, and $100 million more in the pipeline — in less than a year.
In New Jersey a new nonprofit – New Jersey PACE – is launching a state-wide initiative to offer a PACE program to each of the State’s 565 municipalities. NJPACE will bring together property owners, contractors, and investors to facilitate “deep retrofits,” as well as renewable energy systems, for commercial, industrial, and major nonprofit property owners such as hospitals and universities. The aim is to have projects pay for themselves with energy savings resulting in no out-of-pocket expense to the property owner — an obvious win-win.
Recently NJPACE began exploring whether its unique financing mechanism has applicability to so-called resiliency projects that have become so necessary in the aftermath of superstorm Sandy. Legislation to permit that use is now making its way through the Legislature.
In these tough fiscal times for governments across the spectrum, we should be doing everything we can to encourage private investment in societal goals. PACE and programs like it offer hope.
Mr. Florio served as NJ’s governor from 1990 to 1994, and was responsible for a number of important environmental and social reforms. See a brief bio here.