Issues & AdvocacyState

Connecticut Green Bank Starts First Statewide PACE Financing Program for Energy Efficiency
By Zachary Hart, Manager, State Relations

Connecticut moved ahead with its plan to institute a statewide Property Assessed Clean Energy (PACE) financing program to fund energy efficiency and renewable energy projects for commercial buildings. PACE bonds are essentially loans given to property owners for energy improvements to property. The loan is typically paid back over a period of 10-20 years through a special tax assessment on the property. For a simple explanation of how PACE financing works, visit PACENOW’s website.

Connecticut’s Clean Energy Finance and Investment Authority (CEFIA) is a statewide “green bank” that will manage statewide PACE bonds and package and sell them in secondary capital markets. The CEFIA overcame what has been the biggest hurdle in implementing PACE, opposition by mortgage lenders, by directly engaging the Connecticut Bankers Association and individual banks in discussions on the opportunity and risk in PACE financing.

The success of PACE financing should be important to architects because it is one of the most promising financing vehicles for “deep energy retrofits” of commercial buildings. Deep energy retrofits are energy efficiency projects in which greater savings, ranging from 40-50%, are sought through an integrated design approach. In order to pull off savings of this magnitude, an architect’s holistic knowledge of building design and project management experience are essential tools. If PACE financing can overcome opposition by the banking industry on a nation-wide scale, architects will have the opportunity to enter into a new and promising area of practice.

Back to Issues and Advocacy News