I HAVE had the pleasure of meeting a lot of people on Guam who would love to go solar or install some means of energy efficiency to help lower their energy costs, but simply have no way of coming up with the extra cash to pay for it. It’s that old catch-22 situation that if I had the money to install these systems I could save money, but my energy costs keep rising and with my everyday expenses there is simple no way to come up with the money. Although regional banking institutions will loan monies now for solar energy and energy-efficient systems, the finance term is usually five to seven years and for most households that are struggling already to make ends meet, this is usually very cost prohibited. But what if there was a program that would amortize this loan for up to 20 years at a low interest rate with no money down – wow! Please sign me up.
PACE – Property Assessed Clean Energy – is an innovating way to finance energy efficiency and renewable energy upgrades to residential and commercial buildings. Interested property owners evaluate measures that achieve energy savings and receive 100 percent financing for these measures while repaying the loan as a property tax assessment for up to 20 years. Owners of these properties under the PACE program can eliminate upfront fees and greatly reduce their energy bills with very low cost financing which greatly overcome the challenges otherwise faced by the costs associated with these technologies
PACE was first introduced in the United States in 2008. Today there are 31 states and the District of Columbia that have adopted legislation that enables local governments to offer PACE benefits to building owners. This community initiative creates permanent private sector jobs, strengthens our local economy and helps Guam become less dependent on fossil fuel. The PACE program is also increasing property values. Data shows that PACE homes are less likely to default and many studies have found that homes with energy efficiency and renewable energy upgrades sell at higher prices relative to those without.
The steps needed for Guam to become the first territory and enable every homeowner or business owner the ability to own an energy-efficient or renewable energy system through a PACE program are as follows: establish public policy promoting renewable energy and energy efficiency as a means to enable every credit-worthy building owner the means to lower their energy bill, and in turn, lower the carbon foot print and help to create a third industry here. Building owners who voluntary participate in the program can hire an experienced energy auditor, which can be found through the Guam Renewable Energy Association membership, to provide the building owner with a full audit and proposal. The government provides financing for the project typically by selling bonds secured solely by payments from the property owners. The building owners receive financing from the government and agree to repay the loan usually through a property tax assessment for a 20-year term.
Everyone wins with PACE. The building owner has a renewable energy system that now enables the owner to become cash flow positive from day one; in some situations, cutting their energy bills by up to 40 percent. The community wins by lowering the carbon footprint of Guam and benefiting from not only a cleaner world, but the buildup of a viable third industry that Guam truly needs.
And the government wins by providing the people of Guam with smart policy that will provide everyone with the opportunity to investment in renewable energy and our children’s future.