Efficiency Vermont Makes Plans for New Financing Opportunity

Efficiency Vermont has been offering energy efficiency programs for many years, and we have heard from our customers the need for more creative ways to help pay for all types of energy-related building improvements. Act 45, passed by the Vermont State Legislature in May 2009, allows Vermont communities to establish property assessed clean energy (PACE) districts to make it easier for building owners to invest in energy efficiency and / or renewable energy projects in existing homes and businesses.[1] This new program will allow for longer participant re-payment terms, which may encourage more customers to undertake energy efficiency projects.

If a municipality approves the creation of a PACE, property owners can choose to opt in to town's newly created special assessment district. To date, Burlington, Halifax, Newport, Putney, and Westminster have all voted to approve the creation of a PACE district. The municipality funds the district through bonds or other appropriate financing mechanisms, and the participating property owner can access funding for eligible energy efficiency and renewable energy projects and then pay back the cost as a regular municipal assessment on their property tax bill. Act 45 allows for this repayment (excluding any past due balances) to transfer to the new property owner at the time of sale if the buyer and seller agree.

The cost of the PACE program is borne solely by the participating property owners and not as an added cost to the municipality's general budget. Repayments are calculated to recover the costs of the program over a term that is less than the useful life of the installed efficiency measures or renewable energy project, weighted by cost.

To be eligible for PACE financing, a property owner must have an analysis performed to quantify the project costs and energy savings and estimated carbon impacts of the proposed energy improvements, including an annual cash-flow analysis. This analysis may be conducted by Efficiency Vermont or Burlington Electric Department (in Burlington), as Vermont's designated Energy Efficiency Utilities or other qualified entities designated by participating cities and towns. All analyses will be reviewed by Efficiency Vermont or Burlington Electric Department. 

Efficiency Vermont, in conjunction with BED, has also developed a list of the eligible measures for improvements financed under this program, which can be found below. We have also provided a printer-friendly copy of the eligible projects list (pdf 208kb).

Other Incentives and Rebates Available

PACE is a way of paying for major energy improvements to a property and participating in PACE does not exclude a property owner from obtaining existing rebates, incentives, and credits. Participating property owners should obtain all available discounts before determining how much financing they may choose to request through the PACE program. Find out more about potential rebates, incentives, and credits for on the Ways to Save and Rebates page of this website. Burlington property owners should visit the BED website.

Technical assistance and incentives from Efficiency Vermont and Vermont Gas System will be available to eligible projects to help reduce costs as well as current federal tax credits through ENERGY STAR® and State incentives for renewable energy  projects. Visit the Database of State Incentives for Renewables & Efficiency for more information.

Eligible Projects for Vermont Property Assessed Clean Energy (PACE) Financing

Act 45, the Vermont Energy Act of 2009, states that "energy efficiency projects shall be those that are eligible under section 3267 of this title."

§3267. ELIGIBLE ENERGY EFFICIENCY PROJECTS

Those entities appointed as energy efficiency utilities under subsection 209(d) of Title 30 shall develop a list of eligible energy efficiency projects and shall make the list available to the public on or before July 1 of each year.

Eligible energy efficiency improvement projects shall be limited to:

• measures or combinations of measures that are permanently attached to the property for which PACE financing is being secured;
• measures that reduce the net energy requirements of the affected building;
• energy-related repair, health and safety measures that may be required to be included in a comprehensive energy efficiency improvement project to secure the energy savings of the project.

Based on Vermont experience, efficiency measures that meet these requirements may include the following, subject to project-specific costs and savings assessment:

Eligible Renewable Energy Projects

Renewable energy projects and / or measures may be eligible for PACE financing, either alone or in combination with eligible efficiency measures, provided they fall under the definition in subdivision 8002(2) of Title 30, where "renewable energy means energy produced using a technology that relies on a resource that is being consumed at a harvest rate at or below its natural regeneration rate," specifically including "flammable gases produced by the decay of sewage treatment plant wastes or landfill wastes and anaerobic digestion of agricultural products, byproducts, or wastes," but excluding "solid waste, other than agricultural or silvicultural waste," any "form of nuclear fuel" and hydroelectric energy from a plant over 200 MW.

Based on Vermont experience, the most likely types of projects to be able to use PACE financing are listed below. It should be noted, however, that for most of these types of projects, only solar water heating is likely to be supportable with financing alone. Other small-scale renewable energy projects will likely need to have their installed cost reduced by owner investment, grants, tax credits, or other funding sources to the level where annual savings can cover the annual financed payments. Efficiency measures, when combined with renewable energy measures, may also help a combined package to meet minimum benefit / cost requirements.