Hawaii PACE Financing Bill

SUBHEAD: Property-Assessed Clean Energy (PACE) Financing reduces energy costs for homeowners, small businesses.

By staff on 10 February 2010 in Hawaii 24/7 - 
(http://www.hawaii247.org/2010/02/10/reducing-energy-costs-for-homeowners-small-businesses)


 
Image above: Detail of painting "Island Home" by westside Kauai artist martin Wessler with mashup solar panel included by Juan Wilson. From (http://wesslerfineart.com/dataviewer.asp?keyvalue=13774&subkeyvalue=379143&page=WorksZoom). Note: Image (with inserted solar panels) has been removed at the request of the artist. 


Following a round of in-person meetings with the mayors of Maui, Kauai and Hawaii Island, Lt. Gov. James R. “Duke” Aiona, testified in support of a program that would lower energy costs for homeowners and small businesses, create green jobs, stimulate the economy and reduce the state’s reliance on foreign fossil fuel.

The state Senate Committee on Energy and Environment passed legislation supporting the program. The bill (SB 2815) would allow the proceeds of state-issued bonds to be lent through professional energy services companies to commercial and residential property owners for the installation of renewable energy and energy-efficient systems. The loans are then repaid over time through an annual or semi-annual county property tax assessment, which would be amortized over a 20-year repayment period.

“I applaud the Senate committee members for their thoughtful consideration in passing this bill,” Aiona said. “The key to this program is improving access to clean energy for residents and small businesses who otherwise would not be able to afford the up-front costs. By removing this major barrier, demand will increase, spurring competition and creating green jobs.”

Each property owner who receives financing through the program will be responsible for repaying the loan via a special assessment linked to property tax payments on the improved property. If the property is sold or transferred during the repayment period, the obligation will transfer with the property, which means the liability stays with the property, not the original owner.

The benefit of the program is that it removes barriers to making a long-term investment on a property that an owner may wish to sell before the full value of the investment is recovered.

Aiona traveled to Maui to meet with Mayor Charmaine Tavares and other county officials about the program. Last week, the Lt. Governor traveled to Hawaii Island and Kauai to meet with Mayor Billy Kenoi and Mayor Bernard Carvalho, Jr., respectively.

Lingle proposes Clean Energy Investment Bonds By on 26 January 2010 in Renewfund -  
(http://www.renewfund.com/node/259)
 
Gov. Linda Lingle announced in her State of the State Address a proposal to empower property owners across the state to help create a green jobs sector through the establishment of a new program called Hawaii Clean Energy Investment Bonds.

Similar programs, which already exist in 15 states, assist residential and commercial property owners with the upfront costs of installing clean energy systems or energy efficiency upgrades by allowing them to borrow the money from the state and then repay the loans over a period of years via an annual assessment on their real property tax bill.

This program spurs both immediate job creation and economic activity, and moves Hawai‘i closer to the goal of 70 percent clean energy by 2030.

The HCEI Bonds program to encourage a green jobs sector is just one of the economic recovery proposals the Lingle-Aiona Administration will be implementing in the months ahead.

TITLE: A BILL FOR AN ACT RELATING TO CLEAN ENERGY BONDS.

PURPOSE: To establish a Hawai‘i Clean Energy Investment Bond Program for renewable energy system and energy efficiency improvements on residential and commercial properties.

JUSTIFICATION: The initial capital investment required by property owners to install renewable energy systems and energy efficiency improvements on residential and commercial properties is a significant barrier to reaching the State’s clean energy targets. As such, employing innovative financing to remove known barriers and stimulate enterprise in the clean energy sector is beneficial to the public.

A Hawaii Clean Energy Investment bond, also known as a “HCEI” bond, is a bond where the proceeds are lent to commercial and residential property owners to finance small renewable energy systems and efficiency improvements; and owners then repay their loans over a prescribed time period via an annual assessment on their property tax bill. The liability to repay the bond is attached to the property, rather than to the individual, as an assessment on real property. HCEI bonds can be issued by states or local governments, and the proceeds can be typically used to retrofit both commercial and residential properties.

Fifteen other states have already established clean energy bond financing or loan programs and two other states have pending legislation.

Assisting renewable energy projects and investments in Hawaii can provide jobs, as well as long-term energy, environmental, and economic benefits. Moreover, this measure is compatible with the goals and objectives of the Hawaii Clean Energy Initiative and is for the benefit of the public. This measure will increase energy security, provide economic diversification, provide increased career opportunities for Hawaii residents, and attract funding and investment into the State.

Impact on the public: Provides an additional financing option to residential and commercial property owners to install renewable energy systems and energy efficiency improvements on their property.
Impact on the department and other agencies: The Department of Business, Economic Development and Tourism will be responsible for implementing and administering the HCEI Bond Program. The Department of Budget and Finance will be responsible for issuing general obligation bonds.

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2 comments :

Brad Parsons said...

They changed them. They're not PACE bills anymore. Will report more soon.

Brad Parsons said...

February 19, 2010
Hawaii Clean Energy Bonds: HB 2643 & SB 2815

Yesterday, HB 2643 moved through the House Finance Committee. Prior to yesterday, on the Legislative website were both versions of the bill, all testimony, committee reports, etc. I read all of those and was going to use them to do a report on this relatively short bill. When I looked back at it today, all of that documentation is not available on the Legislative site except for the original version of the bill, which is no longer the current version of the bill.

So, a quick, accurate summary from memory. First, this is no longer a formal PACE program being proposed. This is Hawaii's version of it. The bond fund set up by the bill is $50 million to start. PV, Wind, even Solar Water Heaters and some efficiency measures are covered by the bill. Micro Hydro is not. Both residential and commercial properties can qualify under this program. Testimony did indicate that that could dillute available funding for residential. On the mainland this type of program has been used mostly for PV on residential, but here by the way this bill is written, I see this program most effectively being used to finance residential Solar Water Heaters on a large scale.

The bill does not get into much detail and leaves the details of implementation and management of the program up to DBEDT. DBEDT mentioned they will have to work with the County governments to implement the property tax aspect of the payback. DBEDT will also have to work with a local technical authority on each island for inspecting and approving the technical aspects of each installation. Nowhere was it said, but I think DBEDT should be responsible for qualifying the homeowner, because some of the local utilities do not have a vested interest in fostering distributed generation such as this. One of the Reps. from Kauai, by the way, was absent from the vote yesterday. The bill mentions that this clean energy bonding program does not negate the Counties from doing their own formal PACE program potentially with more funding using their own bonding authority.

Overall, I view this bill as just a start, where the Counties of Hawaii have thusfar been afraid to venture on their own.

SB 2815 in the Hawaii Senate has been referred to, but not yet scheduled by the Ways and Means Committee.

Labels: DBEDT, Hawaii Clean Energy Bond financing, Not Micro Hydro, Not PACE, PV, SB 2815, small wind, solar water heaters

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