C-PACER Legislation Passes in Washington State!
Over the past two years, members of the Shift Zero PACER Task Force have led extensive stakeholder engagement and advocacy for enabling Commercial PACER financing in Washington State – and we are excited to share that HB 2405 successfully made it over the finish line in the 2020 legislative session! A broad and diverse coalition of supporters came out to testify and speak with legislators, and the bill passed with strong bipartisan support.
- We would particularly like to acknowledge the strong support of the Building Owners and Managers Association (BOMA), the Mechanical Contractors Association of Western Washington, the Solar Installers of Washington, and the Washington State Emergency Management Association, as well as the Shift Zero members who actively supported the bill.
- We would also like to thank Rep. Davina Duerr and Sen. Liz Lovelett for their sponsorship and support, as well as Rep. Beth Doglio, who championed the bill last session.
- The Shift Zero task force on C-PACER will continue meeting to discuss outreach and support needs to Washington counties that may be interested in implementing a C-PACER program.
C-PACER Financing in Washington
Since 2010, nearly $1 billion have been invested in commercial building improvements in more than 20 states through an innovative economic development tool called Commercial Property Assessed Clean Energy (C-PACE). Fourteen more states have recently passed PACE enabling legislation and are now developing PACE programs.
In Washington state, a growing coalition of economic development, private industry, social justice, and environmental stakeholders is coming together to develop and support legislation to enable Commercial PACE in Washington, adding an “R” to PACE to emphasize that this type of financing can also cover resilience measures, such as seismic retrofits, stormwater measures, and fire protection, in addition to clean energy and efficiency.
|Understanding PACE||Washington Status||Take Action|
PACE financing is a rapidly growing financing tool that enables building owners to pay for critical building improvements that make their properties more valuable by reducing operating expenses, improving the health of occupants, and strengthening long-term sustainability. PACE financing provides a way for local governments and private lenders to cooperate on loans secured by the property tax obligation, similar to a local improvement district. The debt does not appear as an obligation on the building owner’s balance sheet, and the repayment obligation stays with the property rather than the owner whenever the building is sold.
With PACE financing, private lenders fund improvements in new and existing commercial, industrial, non-profit, and multi-family buildings that improve their long-term economic and environmental sustainability through:
|Energy & water efficiency||Renewable energy||Seismic hardening|
|Fire protection||Flood readiness||Energy storage|
PACE loans follow well-regulated underwriting practices to ensure that the equipment pays for itself over the financing term. PACE financing is secured by placing a lien on the property for the term of the debt, which typically lasts 15-25 years. This long term allows property owners to invest in efficiency improvements that raise net operating income and increase property values, where other forms of financing typically would not be cost effective for making such facility investments, especially for short-term holders of commercial properties. Property owners and municipalities have no obligation to participate, so there is no concern on their part if they find PACE financing is not right for their building or community.
SAVE MONEY – Property owners are more focused today than ever before on energy and water conservation. PACE helps reduce utility bills by lowering energy costs. Long term pay back can make PACE-funded projects immediately cash flow positive.
SPUR ECONOMIC DEVELOPMENT – PACE funded projects create more jobs and economic activity. According to the 2011 study by ECONorthwest, every $1 million in project spending results in 15 new jobs and $2.5M in economic output.
MEET CLIMATE GOALS – PACE helps communities achieve important energy and water conservation goals. Efficiency projects upgrade old equipment which reduces energy use, while renewables replace fossil fuels and reduce greenhouse gas emissions.
More than 30 states have passed PACE enabling legislation since it was first developed in 2008.
In Washington state, previous interest in PACE had been stymied by the misconception that our state constitution prohibited PACE. Fortunately, a thorough legal analysis [Read the memo] recently demonstrated that by bringing in private capital, PACE is allowable in Washington and does not violate any local “lending of credit” prohibitions that were of previous concern.
Commercial PACER legislation is critical to unlocking this powerful economic development tool. A PACER lien is paid back by the property owner as a special assessment on their property tax bill. This innovation is fundamental to bringing the security that capital providers need to be able to unlock this market and bring needed investment to Washington’s commercial, industrial, non-profit, and multifamily building stock.
Get in touch. Contact firstname.lastname@example.org and our PACE in Washington experts will get back to you.
View Other Shift Zero Task Force Initiatives:
- Building Electrification
- 20 by 2020 Building Challenge
- Energy Performance Disclosure and Upgrade at Point of Sale
- PACE (Property Assessed Clean Energy) Financing
- Energy Code Roadmap
- Zero Net Carbon Policy Toolkit
Featured Image: zHome | Issaquah, WA
Architect: David Vandervort Architects | Builder: Ichijo USA
Project Partners: City of Issaquah, King County, Built Green, Puget Sound Energy, Port Blakely Communities, and WSU Energy Extension
Photo courtesy of zHome