A Baltimore Sun article (2016-12-18) reported that 11 Maryland counties now support the Property-Assessed Clean Energy (PACE) financing program. The program allows commercial properties to pay more in local property taxes to finance green energy and energy efficiency projects. The local government than sends the additional payment to lenders that provided the costs for the energy improvements. The program allows projects that might not otherwise be fiscally feasible, provides added security to lenders, and allows lenders to charge lower interest rates over a longer period of time. The risk of default (and potential foreclosure) remains with the property owner and there is no additional exposure for a participating local government. The article noted that Maryland, the District of Columbia, and 18 other states have ongoing PACE programs. From the article:
Maryland passed laws in 2009 and 2014 that enabled counties and Baltimore City to adopt ordinances for PACE lending in their jurisdictions.
A year ago, only a handful of counties had gone through that effort, but in 2016, the program has grown to cover nearly half the state.
Anne Arundel, Garrett, Howard, Kent, Montgomery and Queen Anne’s counties are now ready to accept PACE loan applications. Baltimore City and Baltimore, Charles, Frederick and Harford counties have passed legislation authorizing the program but still are developing the administrative processes to handle it.
Of other local jurisdictions, Prince George’s County is exploring its own legislation, but Carroll County officials are not considering joining the program.
Local government leaders say the program is a low-risk, low-cost way for jurisdictions to promote energy efficiency — and potentially generate new tax revenue. The building improvements can raise property values permanently, at least in theory.