As a result of legislation passed last week by Governor Andrew Cuomo, New York State’s Property Assessed Clean Energy (PACE) financing program has been expanded to now apply to a wider variety of energy efficiency and renewable energy measures. PACE is a financing option that permits building owners to pay for energy saving improvements over longer periods of time, sometimes up to 20 years. This annual charge is incorporated into their real property tax bills. Energize NY, a non-profit local development corporation, manages the program across the state.
Unlike traditional financing options, PACE eligibility is not based on traditional credit metrics. Financing under PACE is available for up to 100% of the project’s cost and can be combined with other financing. PACE is available in 39 municipalities across the state.
The recently passed law amends the original PACE law from 2009 and allows financing for more of the associated costs of clean energy improvement. Originally, the law limited PACE financing to 10% of the property’s overall value, too low to cover the costs of many energy-saving measures. This 10% cap put the financing option out of reach for many building owners in parts of the state. The new amendment eliminates this limit and creates more flexibility on the amount of financing available to commercial property owners.
Furthermore, the new amendment allows PACE to finance remote net metering solar projects on commercial properties. These will allow properties which are not good candidates for solar power to receive renewable power through a system located on another property. The new law also allows for the use of New York State funds, in addition to federal funds, to provide credit support for the PACE program.
In coordination with the new legislation, The New York State Energy Research and Development Authority (NYSERDA) has released a new set of Commercial PACE Guidelines which broaden the range of energy saving improvements qualifying for PACE. This is all in an effort to drive greater use of efficient, clean energy within the state.