Program Would Provide Loans to Property Owners for Renewable Energy Improvements and Systems
TRENTON – Legislation sponsored by Senator Bob Smith that would provide financing for municipalities that wish to facilitate the purchase of renewable energy systems or energy efficiency improvements by property owners was released today by the Assembly Telecommunications and Utilities Committee.
The bill (S-1406) would establish the “New Jersey Property Assessment Clean Energy (NJ PACE) Municipal Financing Program” in the New Jersey Economic Development Authority (EDA) and the New Jersey Board of Public Utilities (BPU). The EDA would establish low-cost sources of financing, such as qualified energy conservation bonds and investment from public utilities and private capital sources, for property owners in participating municipalities to purchase renewable energy systems and energy efficiency improvements.
“By providing loans to property owners, NJ PACE will provide New Jersey municipalities with the resources they need to strengthen their communities by increasing the usage of clean and safe renewable energy,” said Senator Smith (D-Middlesex). “These loans will make it affordable and sensible for businesses, families and local communities to invest in renewable energy sources, reducing their energy costs and protecting the environment.”
To participate, municipalities would apply to the BPU for entrance into the program. They would then be eligible to borrow funds from the EDA for use for financing and installation of renewable energy systems and energy efficiency improvements either by individual property owners or by groups of property owners who wish to participate jointly in a community renewable energy project. The loan would be secured by a special assessment on the improved property.
In case of improvements that include solar energy systems, property owners would also receive a solar renewable energy credit through the BPU which would be used as partial repayment to the municipality for the loan. The municipality would in turn use the solar renewable energy credits as partial repayment to the EDA.
Proceeds from the sale of the solar renewable energy credits and the special assessments payment received from the municipalities to the EDA would be used to pay bondholders and investors as well as to provide financial incentives to municipalities to participate in NJ PACE.
“This program is a win-win for communities throughout New Jersey,” Senator Smith said. “Not only will it reduce the energy costs for local property owners by providing them with access to renewable energy sources or energy efficiency improvements, but it will also increase the values of improved properties. This will benefit the municipalities, all while creating local jobs and protecting the environment. This legislation will assist New Jersey communities in becoming ‘green and sustainable.’”
The bill was approved by the full Senate in June.