PACE & RECAP : Financing Renewable Energy

1. PACE & RECAP: Financing Renewable Energy Michelle Hickey, ISEA Program Coordinator Illinois Solar Energy Association

2. Economics of Solar - PACE & RECAP In the first year net REVENUE of $919.44 Illinois Solar Energy Association

3. What is PACE? Property Assessed Clean Energy Enables local governments to finance renewable energy and energy efficiency projects on private property. Illinois Solar Energy Association

4. How PACE Works Provides upfront Project $$ through Bond Issuance Local Agency (City or County) Property Owner (Residential, Commercial, Industrial) Loan paid on Property Tax Bill Illinois Solar Energy Association

5. Property Owner Benefits • Eliminates upfront costs • Payments tied to property, not owner • Save $ on energy bills • Interest portion of annual repayment is tax deductible • 20-year financing term matches payback Illinois Solar Energy Association

6. City/County Benefits • JOB CREATION • Meet climate and renewable energy goals • No debt or credit risk • Saves money for residents • 100% opt-in program with no costs to non-participating property owners Illinois Solar Energy Association

7. Installer Benefits • JOB CREATION • Eliminates #1 Barrier to Sales – Upfront cost • Close more sales • Reduces focus on ROI Illinois Solar Energy Association

8. ILLINOIS SB 583 PACE STATE ENABLING LEGISLATION A municipality may enter into voluntary agreements with the owners of property within the municipality to provide contractual assessments to finance the installation of distributed generation renewable energy sources or energy efficiency improvements that are permanently fixed to real property. Effective January 1, 2010 Illinois Solar Energy Association

9. ILLINOIS SB 2505 PACE Financing • Property owners may enter into an agreement with Counties & Municipalities (C&M) to finance energy improvements • C&M may levy property taxes in connection with green energy service areas • C&M may issue bonds and may sell, assign or pledge those bonds to the Illinois Finance Authority. ON HOLD Illinois Solar Energy Association

10. ILLINOIS SB 2482 PACE Financial Component • Amends the IL Finance Authority Act • Amends Counties Code and Municipal Code • Amends Special Service Area Tax Law in Property Tax Code • Provides power to purchase special service area bonds related to green energy special service area projects • Allows any unit of government to issue special service area financing ON HOLD Illinois Solar Energy Association

11. Where is PACE Now? • Last July, the Federal Housing Finance Agency told Fannie Mae and Freddie Mac to stop underwriting mortgages with PACE assessments. • February 10th – D.C. Staffer briefing on PACE • Many organizations and states are urging Congress to take action and allow states to start PACE programs Illinois Solar Energy Association

12. PACE Programs • BerkeleyFIRST Program • Boulder County ClimateSmart Loan Program • Palm Desert Energy Independence Program • Sonoma County Energy Independence Program Illinois Solar Energy Association

13. PACE Resources • www.PACENOW.com • www.Renewfund.com • Database of State Incentives for Renewables and Efficiency (DSIRE) Illinois Solar Energy Association

14. IL Policy Resources • Illinois General Assembly • Learn about bills, sponsors, and bill status • Illinois Board of Elections • Find your legislators and their contact info • Environmental Law & Policy Center • Midwest’s leading public interest environmental legal advocacy and eco-business innovation organization • Illinois Environmental Council • Track bills and legislative updates Illinois Solar Energy Association

15. RECAP - Renewable Energy Certificate Aggregation Program • ISEA program available to members • Pays $200/ 2011 Solar REC • Grid-tied PV systems • Preference to small systems (<10 kW) Illinois Solar Energy Association

16. RECs Represents the property rights to the environmental, social, and other non-power qualities of renewable electricity generation. A REC, and its associated attributes and benefits, can be sold separately from the underlying physical electricity associated with a renewable-based generation source. EPA Definition Illinois Solar Energy Association

17. Energy & RECs Illinois Solar Energy Association

18. SRECs 1 MWh solar energy = 1 SREC For every 1 MWh (1000 kWh) of energy produced by a Photovoltaic system, 1 Solar Renewable Energy Certificate (SREC) is produced Average 5 kW system annually generates 6000 kWh = 6 MWh = 6 SRECs Illinois Solar Energy Association

19. Price of SRECs • 2011 Price is $200 • Cap of 160 SRECs • 40 PV systems applied • At Capacity • 2010 Price $135 • Purchased ~169 SRECs • 30 PV systems • Total payout = $22,767 • 2009 Price $65 • Purchased ~84 SRECs • 20 PV systems • Total payout = $5,437 Illinois Solar Energy Association

20. Price of SRECs • Need more states to open market up to IL SRECs • Illinois RPS with 6% carve out for solar will help for big installations • Sustainability Plans with teeth Illinois Solar Energy Association

21. Thank you! Illinois Solar Energy Association 1281 E Brummel Ave Elk Grove Village, IL 60007 312-376-8245 www.illinoissolar.org contactisea@illinoissolar.org Illinois Solar Energy Association