PA Senate Bill Could Unlock Energy Potential in Commercial Buildings

February 6, 2017By: Lindsay Baxter
PEC Blog

 

In recent weeks, announcements from the federal level have deflated the spirits of many environmentalists and climate advocates. And while it may seem that many in power are against the efforts of those of us who work in climate protection and clean energy, ever the optimist, I’d like to think there are opportunities to tie our work to what is important to these would-be opponents: job growth, strong businesses, and a robust tax base.

I believe SB 234 (P.N. 255), introduced last week and sponsored by Senators Blake and Reschenthaler, presents one such opportunity. The proposed legislation would enable local government entities, such as economic development agencies, to establish PACE financing programs for energy efficiency, renewable energy, and green infrastructure in the commercial sector.

PACE, a tool used successfully in other parts of the country, stands for Property Assessed Clean Energy. In short, this form of financing ties the responsibility for repayment to the property itself, rather than to the individual owner. This can unlock the opportunity for deep energy retrofits and renewable energy projects with longer pay back periods because the owner doesn’t have to worry that if s/he moves locations before receiving the full return on investment s/he will still need to pay off the financing. Instead, the next owner, who will enjoy the benefits, and often cost-savings, resulting from the project, will also be responsible for repaying the balance of the loan. For well-structured projects, the monthly savings often equal or exceed the monthly repayment fee.

This specific legislation also allows for the use of PACE financing towards green infrastructure improvements, which might include green roofs, permeable pavement, or tree plantings, for example, to reduce stormwater runoff. While these types of improvements do not result in cost-savings in the same way that energy efficiency projects do, in municipalities with stormwater fees, reducing impermeable surface area reduces the property owner’s burden, resulting in actual cost savings.

I believe legislation like this should appeal to parties that aren’t traditionally environmental advocates for a number of reasons. For one, it’s all about unlocking the potential of the private sector. It simply sets up a financing tool, then gets out of the way and allows businesses to determine the best way to utilize that tool in their own self-interest.

Second, it allows for the creation of additional green jobs in Pennsylvania. According to a recent report, more than 66,000 Pennsylvanians are employed in clean energy. Unlike many industries, this employment number is growing every year. And, it sounds cliché, but these jobs are inherently local and cannot be outsourced. Plus, these jobs are spread across every county in Pennsylvania, urban and rural alike.

Finally, because this bill simply allows for the creation of PACE financing programs, it gives local municipal leaders freedom to choose what program works best for their individual community.

I hope that in the coming months we see more legislation introduced—and hopefully passed—that makes it easy for even unlikely supporters to back clean energy.

 

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