PACE PAYS TO GO GREEN: Funding Program Makes Smart Home Improvements Doable
Dec 04, 2014 09:55PM
By Lauressa Nelson
Through the Property Assessed Clean Energy (PACE) program, Walton County is leading the Panhandle in securing convenient, affordable financing opportunities for residential, multi-family, commercial and industrial property owners to fund improvements that reduce energy consumption, create renewable energy on-site or strengthen the property against windborne damage.
Unlike a traditional loan, the financing obtained through PACE is based on the building’s fair market value, rather than personal credit ratings; property owners can borrow up to the limit of the equity in their property and obtain long-term financing for up to 100 percent of all costs associated with the qualifying improvement(s).
The loan is repaid on the borrower’s property tax bill through a special, non-ad valorem assessment over a period of up to 25 years. The annual assessment may be escrowed by the mortgage lender or paid in a lump sum with the property tax bill. As soon as the improvements are made, the property owner begins saving money through reduced energy costs and lower property insurance premiums, which means the enhancements help pay for themselves. The administrative fees and interest for the loan are incorporated into the cost of the improvements and are often cheaper than comparable financing available through contractors, with interest rates varying between 5.5 percent and 7.5 percent.
In the long term, property owners benefit by continuing to save long after the improvements have been paid off. If the owner sells the improved property, the repayment obligation either transfers to the new owner or can be paid off as a condition of the sale.
“To find out how much you qualify for, you can apply online at EvestFlorida.com for a $25 application fee,” says Veronica Cross, a senior outreach consultant for PACE. “Before funding the project, the agency needs a detailed bid from one of the approved contractors so that we can determine if the improvement meets all the qualifications. Applicants can choose to finance any percent of the project up to the approved funding amount and view an amortization schedule before choosing the terms.
They are still eligible to use additional funding sources and to receive any other incentives, such as tax credits, that are available to them.” EvestFlorida.com provides links to tax incentives, and Cross advises that the approved vendors typically know the current status of available incentives. “Everyone involved in PACE is also lobbying for other incentives. And with the savings on energy bills and homeowner’s insurance, the return on investment starts immediately.”
History of PACE
The Florida PACE funding agency was created in June 2011 by general law to facilitate the funding, financing, marketing and management of a statewide uniform and scalable program that is easy for counties and cities to utilize while protecting themselves from liabilities and staffing expenses. The legislation allows individual residential and commercial property owners to voluntarily seek financing for certain energy or wind-resistance improvements. Because the program is completely voluntary and uses no government funds or tax revenues, a private funding agency was created to develop and implement it.
PACE is available nationwide. Walton County is one of the first in Florida to subscribe to the program, administrated by the funding agency eVEST Florida, which is working with government leaders in other counties and municipalities to make the program more widely available. So far, other counties in Florida that have subscribed are Gulf, Gadsden, Jefferson, Nassau, Clay, Flagler and Marion, as well as the cities of Tamarac and Kissimmee.
Qualifications for Improvements
There are three categories of qualifying improvements: installations that increase energy efficiency, generate renewable energy or mitigate wind damage. When meeting with a PACE contractor or consultant, the owner may choose one or more of the improvements and will be provided details about what will enable the greatest benefit to the building.
Improvements that conserve or increase efficient use of electricity, natural gas, propane or other forms of energy comprise but are not limited to heating, ventilation and air-conditioning (HVAC) systems; lighting retrofits and controls; energy recovery systems; high-efficiency pumps and motors; generators; sealing and insulation; and daylight harvesting.
Upgrades or additions that produce energy through renewable resources include but are not limited to solar/photovoltaic, thermal, geothermal and wind-powered systems.
Wind mitigation improvements comprise strengthening the roof deck attachment, creating a secondary water barrier to prevent water intrusion, installing storm shutters, reinforcing roof-to-wall connections and more.
In Walton County, property owners can choose from more than 25 approved vendors at EvestFlorida.com. The contractor will evaluate the desired improvement to make sure that it will increase efficiency or conservation. The qualified improvements should lower utility expenses or reduce insurance premiums and increase the comfort and value of the home or business.
Panhandle Leaders in Energy Efficiency
The Panhandle can be proud of its local companies that are leading the way in increasing energy efficiency. Here are a few of the contractors that offer improvements that can be financed through PACE.
Erin LaGrosse, who co-founded Gulf Coast Insulation (GCI), in 2009, describes why spray foam insulation is an approved PACE program improvement. “Spray foam is the most energy-efficient insulation material available because it stops all heat transfer and waste that can be lost throughout the home in many different ways,” she explains. “Many homes have cellulose or fiberglass insulation. Spray foam is newer and slightly more expensive but offers greater energy savings than other materials because it completely adheres to the building’s structure and therefore provides a complete air seal.”
Made from pest-resistant, recycled materials, spray foam is eco-friendly and lasts for the life of home; it never shrinks, sags, deteriorates or loses R value, a measure of the insulation’s efficiency. In Florida, spray foam is approved as a method of improving wind uplift protection from hurricanes.
PACE will accept other insulation options, but if the property owner already has other insulation, spray foam is the upgrade option, so that the property owner starts saving immediately. Using the energy savings calculator available at GulfCoastInsulation.com can help people determine the amount of savings they’ll earn.
Gulf Coast Insulation stays on top of the latest local rebate offers and federal tax credit opportunities, including the Gulf Power Rebate Program and Chelco’s Co-Op Connections. Active duty or retired members of the military also receive a discount directly from GCI. LaGrosse advises that IRS.gov is the best place to look for information about the most current federal tax incentives available.
Heating, Air Conditioning and Ventilation Systems
Doug Wagner, co-owner of Emerald Air, has recently completed the process to become a PACE-approved vendor. Emerald Air provides two main qualifying improvements, geothermal HVAC systems and Everclean Green technology.
“Geothermal HVAC systems provide the highest level of operating efficiency in the industry and save homeowners money by conserving energy, because they use the Earth’s constant temperature to absorb and dissipate heat,” explains Wagner. In addition, because geothermal systems use polyethylene pipes buried beneath the ground instead of copper condensers, the risk of theft for copper is eliminated, saving insurance companies thousands of dollars. Geothermal HVAC systems qualify for a 30 percent federal tax rebate, as well as local utility company rebates.
Wagner is enthusiastic about Everclean Green, an innovative, relatively new technological advance in the HVAC world that can be installed on any existing or new HVAC system to increase its efficiency by up to 35 percent. The process uses invisible energy fields called broadband electromagnetic energy. By replacing the filter with Everclean Green technology, organic debris (germs, household dust and toxins) in the HVAC system are exposed to electromagnetic wavelengths and hydroxide and then converted into a benign gas and moisture. “This technology results in improved air flow and system efficiency, so that the HVAC system performs better and produces the purest quality of indoor air,” remarks Wagner.
Gulf Coast LED Lighting, LLC, in Gulf Breeze, has been a PACE-approved contractor for about one year. According to co-owner Don Richards, one of the most recommended improvements is retrofitting two- and four-tube fluorescent fixtures to LED, which can yield a 50 to 75 percent energy savings. Once a property is converted to LED lighting, the return on investment can be between 35 and 80 percent in less than three years. “In commercial buildings, depending on the size of the installations, we have seen energy savings of up to $1,500 per month,” remarks Richards.
LED lamps can be installed into existing fluorescent housings and do not require replacing the ballasts. Because LED tubes operate at an ambient temperature of between 75 and 85 degrees Fahrenheit, they do not waste energy through heat loss, nor do they add to the room’s summer cooling load. The LED lights used by Gulf Coast are 100 percent recyclable, contain no mercury, do not emit radiation or any dangerous UV rays and do not require special disposal. Best of all, LEDs are practically maintenance-free for 50,000 hours, so users spend less time and money buying and replacing bulbs.
Compass Solar had been actively campaigning for the PACE funding program for years before it arrived in Walton County, and the company has been on board as an approved vendor since the program’s inception.
Regarding the types of PACE improvements that Compass Solar recommends, Marketing Director Amy Vogt points out, “All energy efficiency updates are important, and then solar can take care of the rest. There are all sorts of solar products available, from solar photovoltaic, which is the creation of electricity, to solar lighting, fans and vents, thermal water heating and even solar parking lot lights.”
Vogt notes a 12 percent or better return on investment (ROI) that pays for itself in about six years. “We target system sizes that will offset 50 to 90 percent of the property owner’s electric bill,” she explains, adding that the ROI and energy savings depend greatly upon the size of the system installed. “Solar is a good investment on many levels; it allows the property owner to become more energy independent, protecting them from future utility rate hikes and saving them money. At the same time, it increases the value of the property and is good for the planet,” Vogt affirms.
In addition to the energy savings, CompassSolar.com provides links to the available a number of rebate and tax credit offers available for solar installations. With a 30 percent federal tax credit to businesses and residences for solar water heaters and solar photovoltaic, as well as rebates for solar water heating through Gulf Power, it seems that those that switch to solar have quite a few ways to pay themselves.
To view PACE Florida’s full program criteria, application instructions and approved contractor listing, visit EvestFlorida.com/faqs. For more information, call Veronica Cross at 866-558-3180 or email [email protected]. Natural Awakenings will host an information session on Jan. 7 at the East of Eden Resort and Spa, 234 Dog Hobble Ln., in Santa Rosa Beach.