Baltimore County News
Public-private partnership eliminates upfront costs
County Executive Kevin Kamenetz announced today that Baltimore County plans to enable a special financing mechanism to make it much easier for businesses to switch to renewable energy sources and install energy-efficient HVAC and building management systems.
At his request, the County Council introduced legislation Tuesday night to enable Property Assessed Clean Energy financing, also referred to as PACE loans. A PACE program would enable commercial building owners to secure loans from private lenders with no upfront costs and pay them back through a surcharge on their real property tax bill for up to 20 years. The PACE loan would remain with the property upon a change in ownership.
“This is a great, business-friendly strategy that helps promote green energy jobs and business competitiveness while reducing greenhouse gas emissions,” said Kamenetz. “The PACE loan model means commercial property owners can more easily benefit from lower energy costs and reduced operating and maintenance expenses as well as increased property values.”
PACE loans would be available Countywide to commercial, industrial, agricultural, hospitality, retail and multifamily properties to access funding for energy-efficient and renewable energy upgrades.
“When we talk to business owners who are trying to expand, energy costs are always on their radar,” said Economic and Workforce Director Will Anderson. “We’re excited about the prospect of having PACE loans because when businesses can cut long-term energy costs, it helps everyone who lives, works and plays in Baltimore County.”
The proposed legislation would allow commercial property owners to use PACE loans to install solar energy equipment, geothermal energy devices, wind energy, water conservation equipment, high efficiency HVAC equipment, building energy management systems and more. In addition to equipment costs, a PACE loan could also cover the cost of energy audits, project development and installation, permitting fees, and other related costs.
“PACE financing is a proactive way for County government to remove financial barriers that can keep businesses from benefitting from readily available green energy cost savings, plus it brings tangible environmental benefits,” said County Council Chair Vicki Almond.
“This would be a very effective sustainability initiative since we anticipate a strong response from the commercial sector, who are large-scale energy consumers,” said Energy and Sustainability Program Coordinator, Ayla Haig. “The fact that PACE would eliminate upfront capital costs and allow businesses to spread out payments makes a big difference in terms of feasibility. Businesses could also leverage utility rebate programs and tax credits for eligible projects, enhancing the financial benefits.”
PACE loan terms
Under the County’s proposed legislation, PACE loans secured through a private lender must have a minimum value of $5,000 and not be more than 20% of the full cash value of the property, as determined by State Department of Assessments and Taxation. Loans would be nonaccelerating for terms up to 20 years, and repayable through a surcharge on the real property tax bill. If a property owner defaults on their PACE loan, the County would not be responsible in any way to cover the deficit.
For more information on the proposed PACE program, businesses may contact Energy and Sustainability Program Coordinator, Ayla Haig at 410-887-5854 or email@example.com.
Background on PACE loans
In 2014, the Maryland General Assembly authorized local governments to establish their own PACE financing program for commercial property owners (Senate Bill 186). In order for commercial property owners to take advantage of this financing mechanism, a local government must pass legislation to authorize commercial PACE for private lenders and to have the surcharge be paid through the property tax bill.
PACE announcement complements County’s solar and renewable energy strategy
On August 29, Kamenetz announced the County’s plans to reduce its electricity consumption by 15% within five years, while establishing a goal to use renewable energy sources to generate or displace at least 20% of County government’s electric demand by 2022.
He also announced a partnership with SolarCity to host solar panels arrays at four County sites. The solar energy systems, which together total 21 megawatts, will produce local clean energy, helping to reduce greenhouse gas emissions, support green energy jobs and reduce air pollution. The systems are expected to avoid the emission of more than 482,000 metric tons of CO2 over the 25-year project lifespan, which is equivalent to removing about 100,000 cars from U.S. roads for one year, or equivalent to the amount of CO2 sequestered by more than 12 million trees.
More about Baltimore County’s sustainability and energy initiatives
More information about Baltimore County’s sustainability and energy initiatives can be found online at http://www.baltimorecountymd.gov/Agencies/environment/sustainability/