A report prepared by Carbon Washington members and funded by the Carbon Tax Center says that loans tied to property (rather than individuals) would help propel clean energy and energy-efficiency measures — but Washington State’s constitution prohibits them.
The report is called “Washington State Climate Change Education and Policy Exploration.” The section on “Barriers to Property-Assessed Clean Energy Programs in Washington State” explains how property-assessed clean energy — or PACE — programs work.
Such programs provide “financing for clean energy and energy efficiency measures for commercial and residential buildings, in which the financing is attached to the property, not the owner. As of mid-2017, nineteen states have active PACE programs with funded projects, and another fourteen states, plus Washington D.C., have active PACE legislation.” PACE programs address a critical contributor to our carbon footprint — aging, inefficient buildings.
The report says the PACE approach has been effective. “Since 2009, commercial PACE programs have financed an estimated 1,030 projects, providing approximately $400 million in financing for energy updates. During the same period, residential PACE programs have financed over 150,000 projects through $3.7 billion in home upgrades.”
About half the upgrades deal with energy efficiency, such as HVAC systems, LED lighting, installing energy efficiency appliances, and water conservation upgrades. In second place: renewable energy upgrades (mainly solar panel installations). These upgrades dramatically reduce the energy and environmental impacts of the renovated buildings.
PACE has been discussed in Washington State, but a thorough public review of the opportunity for Washington to enact such a program has not been undertaken until now. Unfortunately, PACE financing is not available in Washington, nor is it likely to be without amending the state’s constitution. PACE attaches the loan bill to the property tax and uses the authority of the state as a financial entity to collect the loan payments. The constitution prohibits the state from acting as a creditor or a loan pass through in a provision commonly referred to as “lending of the state’s credit.”
The report’s authors consulted constitutional law experts about a potential work-around. The bottom line: “The only resolution for this structure of the program appears to be a constitutional amendment.”
The report was researched and written by Megan Conaway, Rheanna Johnston, Kyle Murphy and Blake Wedekind.