Provides Funding for Loans to Property Owners for Renewable Energy Improvements and Systems
TRENTON – Legislation sponsored by Senate Environment and Energy Committee Chairman 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 approved yesterday by the Assembly.
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.
“The NJ PACE bill would set up a tried-and-true financing system where municipalities could assist their residents in making their homes more energy efficient with improvements such as more efficient windows, boilers or air conditioners or with alternative energy improvements such as wind turbines or solar systems,” said Senator Smith (D-Middlesex). “The municipalities would provide the money for the improvements and then collect a special assessment from the taxpayer while collecting the quarterly tax bill. Most municipalities are already using this system to make public benefit improvements to curbs and sidewalks.”
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 assessment payments 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.
“Not only will this system provide homeowners with the cheapest possible financing since EDA funds are tax-exempt and with the lowest-available interest rates, it will also provide homeowners with energy efficient homes, saving them money on their monthly electric, gas or water bills,” Senator Smith added. “Simultaneously, the municipalities would benefit with homes that are more valuable, which would be reflected in the tax assessment. Most importantly though, they would see the properties and homeowners in their communities moving towards greener, sustainable living.”
The bill passed the Assembly 45-25-1. It was approved by the Senate in June and now heads to the Governor’s desk to be signed into law.