A program to help finance green energy for commercial buildings is nearing approval from the Board of Supervisors, pending an attorney general’s opinion expected next month.
The Commercial Property Assessed Clean Energy Program allows building owners to take out loans secured by a voluntary lien against their property to finance clean energy projects, such as installing solar panels on the roofs of buildings. The program is intended to provide more financing for clean energy projects, which typically take longer to pay for themselves than the typical commercial real estate loan that owners might use. While commercial real estate loans may be paid off over five to 10 years, Louduon’s PACE loans will have 30-year terms.
Those loans are made by private lenders, administered by a third party, and backed by a special lien against the property, which carries with the property if it is sold. Supervisors are waiting for an opinion from Attorney General Mark Herring on whether the county may legally delegate the billing, collection and enforcement of those loans to a third party before moving ahead.
Vice Chairman Ralph M. Buona (R-Ashburn) said he expects the attorney general will rule it can, but that it’s prudent to wait and be sure. If Herring does not agree, the county would have to edit the ordinance before passing it. He pointed out amending an existing ordinance can take as long as writing a new one.
“I think it’s prudent to wait one month and maybe save a year,” Buona said. “We’ve waited this long, one month will be OK for us.”
As the county began writing its ordinance, some supervisors were concerned about putting taxpayer money on the line with the program. County Chairwoman Phyllis J. Randall (D-At Large) said Loudoun’s program keeps county money out of it. Buona, who was an early skeptic of the program, said all his concerns had been allayed.
“We do have some things to do along the way, but let me say again, we have done more in the space of the environmental sustainability space than I think anybody realizes,” Randall said.
She and other supervisors were also thankful to Gerry Gurgick, who has pushed Loudoun to adopt the program for years.
“We would absolutely not be here if it were not for you, so thank you so much,” Randall said.
The county’s plans were hailed by environmental activists and people involved in PACE financing. Natalie Pien called the program “extremely timely.” Scott Dicke said Loudoun’s program could be a reference for other municipalities. Cliff Kellogg, executive director of the C-PACE Alliance, said this kind of program has already been used to move more than $25 million in financing at D.C. United’s new home, Audi Field.
And Ethan Elser, vice president of financing and administration firm PACE Equity, said passing the ordinance will help restart a stalled green project in Loudoun.
“The sooner we can get PACE passed in the county, the sooner we that we can get the project restarted and built and added to the tax base,” Elser said.
The program’s advocates also hope the county will eventually go a step further and open it up to large residential projects such as apartment complexes and condominiums.
“I do hope that in the future we’ll add multifamily back into our PACE program,” Gurgick said. “It is really no different than hotels from every aspect that I’ve ever worked as a developer.”
Loudoun is one of the first Virginia jurisdictions to craft a Property Assessed Clean Energy ordinance. Supervisors voted 8-0-1, Geary M. Higgins (R-Catoctin) absent, to take the issue back up in February for a final vote.