DePauw student recommends PACE
To the Editor:
Suppose there was a program that would put unemployed Putnam County residents back to work, reduce Putnam County's carbon emissions and save participants in the program money on energy costs. Suppose this program already existed in 23 states across the country. Would you want Indiana to become the 24th state to adopt this program? There is no need to discuss this in hypothetical terms. A program exists that would do all of those things, and it is currently being considered by the Indiana General Assembly.
The program is called PACE (Property Assessed Clean Energy), and it provides funding for energy efficient improvements to homes and commercial buildings. PACE is a voluntary program. For those wishing to retrofit their homes with new energy efficient windows or renewable energy equipment like solar panels, the high upfront cost is a significant obstacle to overcome. PACE would allow property owners to spread this high upfront cost over a period of twenty years, making energy efficiency more affordable. It gives local governments the ability to issue bonds or receive federal grants to fund these types of projects.
The property owners repay the loans through special assessments on their property. It is basically an optional, minimal increase in property taxes that is outweighed by the long-term savings that result from the increased energy efficiency.
Though PACE has bipartisan support from mayors and governors across the country, the program has run into problems both in Indiana and the U.S. After concerns were raised by Fannie Mae and Freddie Mac, the Federal Housing Finance Agency issued a statement in 2010 on the priority lien status of PACE programs, which has essentially halted most PACE programs in America.
In Indiana, opposition from banks and other lending agencies has sent one PACE bill (HB 1457) to a summer study committee. The other PACE bill (SB 260) has been amended to exclude bonding authority and the priority lien.
Due to the fact that PACE is an optional program, the numerous benefits it would provide if enacted cannot be realized unless local governments opt into the program. Without bonding authority or the priority lien status it seems unlikely that any local government will be able or willing to enact a successful PACE program.
Hopefully the House will amend the bill to include both of these elements, reconcile the bill with the Senate version and pass a respectable PACE bill this session.
If PACE were enacted this year, commercial PACE programs could begin immediately and we would have a residential program ready to begin when the FHFA hold is lifted. Otherwise, residents of Putnam County, as well as Indiana in general, will not be able to enjoy the benefits of PACE.
Resident of Bainbridge, IN