Property Assessed Clean Energy, or PACE, is a long-term financing tool facilitated through local governments, allowing commercial property owners in Michigan to undertake energy efficiency, water efficiency, and renewable energy upgrades. Property owners receive 100% pre-funding for energy saving upgrades on their facilities. Local governments facilitate PACE financing by allowing commercial property owners to repay private lenders via a special assessment on their property tax bill. To take advantage of PACE financing, the property owner signs an agreement with a private lender and the local government, and the loan repayment is then added to the property owner's tax bill. Using such a tool, local governments can help reduce property owners' operating expenses, drive economic development, protect the environment, and increase property values.
Lean & Green Michigan allows municipalities to create a PACE district at no cost, with no need for new government staff or lengthy RFP processes, with access to private capital -- and to do all of this cooperatively with other local governments.
The process for joining Lean & Green Michigan is easy:
|GO-IT-ALONE PACE DISTRICT||LEAN & GREEN MICHIGAN™|
|Start-up||Municipality hires new staff or retains outside entity through RFP process.||Municipality simply votes to join Lean & Green Michigan via its normal legislative process.|
|Cost to municipality||Jurisdictions have paid anywhere from $150,000 to $2,000,000 to start a district.||None. The cost of running Lean & Green Michigan is incorporated into the financing of each deal.|
|Legal||Municipality must pay for legal counsel, whether inside or outside.||Legal fees are included in each project and are financed by the property owner, so the government pays nothing out of pocket.|
|Funding||Municipality typically tries to issue "PACE bonds" to raise funds to finance property owners' energy projects. There is not a track record of success nationwide.||Lean & Green Michigan brings significant private capital to the table to fund energy projects on a free market basis.|
|Regional cooperation||Each county, city or township creates its own rules and funding system, leading to a patchwork of districts that don't work together.||Counties, cities and townships join together to create one efficient system that works for small and big companies alike and attracts lenders by creating a large pool of projects to finance.|
|Overall model||Traditional model of each local government doing its own thing.||Public-private partnership where local governments, property owners, lenders and contractors collaborate to create a large market for energy efficiency and renewable energy finance.|