Financing Energy-Saving Improvements Through The Florida Green Energy Works PACE Financing Program
Who we are - Local governments: - Lantana, Mangonia Park and City of West Palm Beach - Chambers: - Greater Boynton Beach Chamber of Commerce - Central Palm Beach Chamber of Commerce (includes Lake Worth) - EcoChamber
Who we are
Our Program Two components: Green Business Certification Program Voluntary Financing for Energy Saving Improvements
What is PACE? Property Assessed Clean Energy Voluntary low cost energy financing program Administered through an Interlocal Authority (the Florida Green Financing Authority) Funds are provided to complete energy efficiency, renewable energy, water efficiency and wind resistance projects Repayment is through property tax bill over terms up to 20 years
Why do it? Wasted energy means wasted money. Avoid large upfront costs. Pay over time. Reduce operating costs. Benefits both owners and tenants. Major green points!
PACE Benefits Long term and safe financing for property owners to develop energy and water efficiency improvements Promotes Green initiatives and Sustainability within City Reduces environmental impacts within City (commercial sector greenhouse gas emissions) Economic development: Puts construction sector to work Increases property s value, promotes economic development opportunities and activity (can increase in TIF funding with property value increases) Increase in building and construction permits and fees, EcoNorthwest Study (April 2011) for every $1Million in spending = $10Million in gross economic output + $1Million in tax revenue + 60 jobs
PACE Status in Florida Additional municipalities and counties are presently moving on PACE. Numerous local governments across the state are actively evaluating options (Panhandle to the Keys)
Florida Green Finance Authority By executing the Interlocal Agreement, Delray Beach gives property owners access to PACE financing Lantana & Mangonia Park created the Florida Green Finance Authority pursuant to Section 163.01 & 163.08, Florida Statutes (WPB signed on 6/11) Contemplated by grant Administer the Program Insulates underlying local governments from risk No cost to join the Authority, but should the City withdraw from the Authority within the first two years, there is an opt-out fee of up to $17,500 to cover the up-front legal and other costs of establishing the Authority.
Role of the Authority Authority s role is administrative: Bears program costs for participating governments Market the Program Approve projects for financing Match property owners with investors Manage levy and collection process with property appraiser and tax collector Assure investors receive repayment Inviting partnership with cities and counties to opt in by standard Interlocal Agreement
Eligible Properties Commercial properties (not residential) Office Hotel Retail Multifamily housing Restaurant Churches and private schools Located in a participating jurisdiction Lantana Mangonia Park More soon
Eligible Improvements Dozens of eligible technologies Goal: Reduce total energy costs by 20% Energy efficiency Windows, doors Insulation Roofing Refrigeration Elevators Pool pumps and heaters
Eligible Improvements Renewable energy Solar photovoltaic Wind turbines Water Efficiency Irrigation systems Toilets Wind Resistance Restaurant equipment Roof deck / bracing Building envelope upgrades High impact windows and doors
Financing Amounts
Steps Only property owners who want to participate complete initial application & eligibility review Energy or water or wind-resistance improvement review (owner responsibility) FGEW underwriting Line up funds and obtain lender consent Execute documents (financing agreement) Complete project and receive funds
Steps Repayment of financing agreement is through voluntary non-ad valorem assessments on annual property tax bill If property is sold, assessment remains in place through the remaining term of the financing agreement.
Simple online application
Keys to Success Only those who want to participate received financing and are assessed Projects must generate sufficient savings to pay for the improvements, Projects that are good candidates for financing will be cash flow positive in year 1 (cost savings are greater than payments on the assessment) and Owner remains eligible for other rebates and incentives.
Sample Project Financing Property: 40,000 sq ft grocery Energy Usage: 2,000,000 kwh / yr Annual Energy Costs: $250,000 per yr Cost of Improvements: $100,000 (HVAC, LED lighting, insulation)
Sample Financing Financed amount: $108,895 (includes closing costs; interest is capitalized) Interest: 7% Term: 10 years Annual payment: $15,984 Energy savings (20%): $50,000 NET SAVINGS: $34,016 / year * Additional rebates and depreciation may also be available.
Contractors Simple application to become a registered contractor for the program Receive leads for qualified applicants Contractors responsible for negotiating deals directly with owners
Landlords and Tenants Owners and tenants need to cooperate to achieve positive outcome for both Where tenant pays utilities and taxes are passed through, tenant will pay cost of financing and get the benefit of savings For gross leases, landlord pays financing cost and realizes savings on utility bills Sample lease amendment language available
Banks Mortgage holder s consent is required PACE projects make existing buildings into better collateral and improve the cash flow of borrowers Existing lenders are invited to extend credit with the additional collateral of a PACE assessment lien
Thank You! Any questions? Florida Green Energy Works Program (855) FL-WORKS www.floridagreenenergyworks.com c/o: Florida Green Finance Authority info@flgfa.org