Update on PACE Legislation in New Jersey

A number of organizations, including the new Coalition for PACE in New Jersey and ourselves, have been involved in working with the state legislature to craft a new law that will address the Governor’s concerns — as stated in last year’s Conditional Veto — and open the way to a robust Property Assessed Clean Energy (PACE) industry in New Jersey. We currently anticipate that PACE will become available for commercial properties — which includes “industrial, agricultural, or commercial property, [multifamily] residential property with five or more 5 dwelling units, or property owned by a tax-exempt or nonprofit entity, including schools, hospitals, institutions of higher education, or religious institutions” — sometime this fall.

The potential significance of this — the result of a four-year effort to make PACE workable in New Jersey — should not be underestimated.

PACE financing makes it possible to undertake “deep retrofits” of buildings — significant improvements in energy efficiency, renewables, and resiliency — in a way that is immediately beneficial for the property owner, the investor, and the community. PACE, which saw $2.5 billion worth of work done in the past few years — involving 105,000 buildings, and creating 25,000 jobs — is proving to be an important economic development tool in a number of states across the country.[1]

As a nonprofit, our own principal focus is the use of PACE, and other innovative financing tools, particularly in distressed and underserved communities as well as in other low and middle-income areas. Here PACE has the opportunity to be more than just a contributor to the capital stack of very large commercial projects, that reduce greenhouse gas emissions and energy costs on a major scale— it can also help to revitalize entire communities.

The major challenge, once the new law is signed, will be to educate NJ’s 565 municipalities, and to persuade them to pass the ordinances needed to enable local PACE programs. We have presented the benefits of the program to many municipalities and counties, and we’re currently offering a draft model Resolution which can be introduced in advance of PACE in order to establish a common framework for the program.

Our goal is to provide a standardized statewide open-market platform as a turnkey solution at no cost to the municipality or the taxpayer. “Open platform” means that New Jersey PACE can arrange the financing for contractors and building owners, or they can bring their own financing to the table.

PACE uses the Special Assessment mechanism, which is only available through the municipal property tax system, to make mainstream investment secure and attractive for major quality upgrades in energy use and building resiliency, thereby effectively enabling us to strengthen and improve our entire built environment. Because every PACE project is local, it also means local jobs and increased local economic activity, connecting sustainability and prosperity in ways that reinforce each other.

And because there is so much work to be done — to make our physical structures more efficient and less polluting while also improving their comfort and performance — there are opportunities for expanding the entire clean energy and building industry, supporting the development of new technologies, new investment opportunities, and new and highly satisfying professions.

We will be working hard over the next several months to get the word out about PACE to municipalities, contractors, property owners, and investors. We offer clear and unbiased informational materials, educational presentations, and we invite you to get involved. There’s a depth of resources at this web site and at our Alliance site. If you want to be among the first to know about the status of PACE legislation, join our mailing list or contact us to do co-marketing, or to become a sponsor. And stay tuned. We’ll be providing complete and up-to-date information about what you can do as soon as the new legislation is approved.

[1]  These statistics include both residential and commercial PACE. Figures for commercial PACE alone across the country are: $250M in improvements in 750 buildings, creating 3,000 jobs. While residential PACE is clearly outpacing commercial, Governor Christie does not appear to be willing to include residential PACE in legislation, so our current bill approves only commercial PACE in New Jersey for the time being. 

For extensive and current information on PACE across the country, visit www.PACENation.us.

2 thoughts on “Update on PACE Legislation in New Jersey

  1. Please email the most updated information on NJ-PACE financing status and process. We are a commercial solar developer based in PA and do a lot of work in NJ. We’ve worked to finance projects in CT with their PACE program.

    Thanks

    1. Hi Andreas:

      Happy to do so, and we’ll post it to the site as well. Very simply, the current amending legislation (A2080, S1570) has been postponed until the New Year, and is unlikely to be acted upon by the Governor until March or April. If it is signed, we will move forward with a statewide administrative platform that we will seek to have adopted by all interested NJ municipalities.

      In the meantime, we are developing a new, alternative, financing model, called DREAM (stands for “Deed-Restricted Resiliency and Energy Affordability Measures”) that does not require state legislation or municipal approval. As far as we know this has not yet been tried anywhere; we have a patent pending on it, and hope to make it available throughout the US in 2017. If you have an immediate project, please contact us about it.

      Thanks, Jonathan Cloud, Executive Director, New Jersey PACE.

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