Clean energy features like solar panels will soon be less of a financial reach for commercial and industrial property owners in Ann Arbor. The city will be the first community in the state of Michigan to launch a PACE (Property Assessed Clean Energy) program. PACE programs allow local governments to finance qualifying energy efficiency and alternative energy installations at commercial properties via bond issues. Property owners then repay the loans through special property tax assessments over several years.
A commercial property is any structure that's not a single-family home, a duplex, or certain townhouses, says Wendy Barrott, community energy coordinator for the city of Ann Arbor and staff member of the Clean Energy Coalition. That would include, for example, apartment housing with three or more units, places of worship, and fraternity housing.
"It's a wonderful economic development tool. It also creates jobs because the people who are doing the audits or the retrofits, they're hiring people," Barrott explains. "Another likely outcome is that businesses are going to be more successful because their energy costs are going to be reduced, and we hope that makes Ann Arbor a more attractive place to do business. And it also helps Ann Arbor reach its long-term goals with energy efficiency and greenhouse gas reduction."
The city has a loan loss reserve fund balance of just under $400,000 and that can be leveraged at a 10 to 1 ratio, "so theoretically it's around $4 million for this first round of funding," Barrott says. After the first round of funding, the city has committed to raise up to $10 million a year for the
PACE program, she adds.
Projects in the range of $10,000 to $350,000 per property owner are allowed. Energy information must be tracked on a monthly basis and submitted twice a year. The city will track energy savings through a database.
A partial list of qualifying projects includes: Energy analysis; insulation and weather sealing; lighting and lighting controls; heating, ventilation and air conditioning equipment and controls, door and window replacements; solar photovoltaic panels; wind turbines; ground source heat pumps; and combined heat and power systems.
Barrott estimates Ann Arbor has 31 million square feet of commercial floor area and spends $130 million on energy annually - all of which leaves the community. If every commercial property owner increased energy efficiency by 20%, very doable with a mid-level retrofit, she estimates that would put another $26 million in greenbacks into the local economy.
The electricity savings would also be equal to the electricity that could be generated by 39 Barton Dams.
A public hearing and a formal resolution to adopt the PACE program are scheduled for October 3. At that point the city will be able to accept applications, Barrott says.
As part of the application process, property owners must have an energy audit done, at their own cost. In certain cases, a previous audit will waive that requirement. Owners may also choose to have the cost of the audit rolled into the assessment.
She anticipates that approved applicants could be underway with their projects by spring.
Source: Wendy Barrott, community energy coordinator, city of Ann Arbor, and staff member, Clean Energy Coalition
Writer: Tanya Muzumdar
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