Property Assessed Clean Energy (PACE) Bond Financing
ECMD teamed with the New Mexico Association of Counties (NMAC) to help develop standards, model ordinances, and guidelines in order to help New Mexico’s counties implement Property Assessment Clean Energy Bond (PACE) financing. PACE financing is an innovative approach to spreading out the costs of energy improvements over a long period. This has the effect of greatly reducing the up-front costs of renewable energy while more closely matching the costs of an energy improvement with the provided benefit on a year to year basis. PACE programs have been implemented across the country and new programs are being formed rapidly.
Energy Financing Districts enable local governments to raise money through the issuance of bonds to fund clean energy projects. The financing is repaid over a set number of years through a “special tax” or “assessment” on the property tax bill of only those property owners who choose to participate in the program. The financing is secured with a lien on the property, and, like other taxes, is paid before other claims against the property in the case of foreclosure. There is little or no up-front cost to the property owner, and if the property is sold before the end of the repayment period, the new owner inherits both the repayment obligation and the financed improvements. Programs have the potential to create energy savings for property owners and supply capital to a growing section of New Mexico’s economy.
In the 2009 legislative session, New Mexico’s lawmakers passed two bills that enable the creation of PACE programs on the county level. Through Senate Bill 647 and House Bill 572, county and municipal residents can secure the up-front capital to pay for a renewable energy system and pay it back through a line item on their property taxes.
Currently, NMAC is developing materials to assist counties in successfully organizing and financing PACE programs. Once the materials are complete, NMAC and ECMD will be providing PACE workshops to further support counties and municipalities.