Illinois recently enacted the Property Assessed Clean Energy Act, Public Act 100-0077, which gives local units of governments (e.g. counties, cities and villages) the authority to establish and administer Property Assessed Clean Energy (PACE) programs. Under a PACE program, certain property owners are able to obtain financing to make energy efficiency-enhancing or renewable energy improvements to their property and repay such financing via periodic assessments against their property. Moreover, new renewable energy systems financed through a PACE program could conceivably qualify to participate in the Illinois Power Agency’s renewable energy credit (REC) procurement program and receive payments for the RECs they produce. The new law sets forth rules for the establishment and administration of PACE programs throughout Illinois.
A local unit of government that elects to establish a PACE program must either administer the PACE program itself or designate a for-profit or a not-for profit entity as PACE program administrator to administer the PACE program on its behalf. Although the local units of government have some freedom to tailor their PACE program to their specific policy objectives, all PACE programs will have the following features:
Once a PACE program has been established, eligible record owners of commercial, industrial, non-residential agricultural or multi-family (containing five or more units) residential property may apply for funding. Homeowner’s or condominium associations are not eligible to apply for funding under PACE programs.
Any funding acquired by eligible property owners from a PACE program must be used for (A) the installation or modification of (i) an alternative energy improvement related to charging electric or hybrid vehicles, (ii) an energy efficiency improvement (which is broadly defined) or (iii) a water efficiency improvement; or (B) the acquisition, installation or improvement of a renewable energy system that is affixed to a stabilized existing property (not new construction). A qualifying renewable energy system could include, for example, a roof top solar panel array or underground geothermal system to generate energy for the property. Recipients of funding under a PACE program will repay the principal amount of funding plus interest via assessments against the benefit real property, and any assessment under a PACE program will constitute a lien against the property until paid in full.
Other key features of PACE programs include:
Bryan Cave LLP is available to assist with a local unit of government’s initial implementation of its PACE program. Concurrently, our Firm can assist owners of commercial, industrial, non-residential agricultural or multi-family (containing five or more units) residential property in their preparation to take advantage of PACE program funding if and when it becomes available, and with consideration of and participation in the Illinois Power Agency’s REC procurement process .
For questions or more information, contact the author, B. Eddie Lowry at 314-259-2530 or Bryan E. Keyt at 312-602-5036, or any member of Bryan Cave’s Real Estate or Energy and Natural Resources teams. You may also contact us through the direct link to our Website, Bryan Cave’s Real Estate or Energy and Natural Resources teams. Bryan Cave LLP makes available the information and materials in its Website for informational purposes only. The information is general in nature and does not constitute legal advice. Further, the use of this site, and the sending or receipt of any information, does not create any attorney-client relationship between us. Therefore, your communication with us through this Website will not be considered as privileged or confidential.