Minnesota launches PACE program with three projects in Minneapolis. This unique statewide program will allow local governments to enter into PACE programs.
Minnesota’s statewide commercial Property Assessed Clean Energy (PACE) financing program officially launched with the unanimous council approval of three PACE-funded energy efficiency and solar projects in Minneapolis.
PACE financing allows property owners to finance energy-related improvements to their buildings with affordable, long-term capital. Minnesota state law allows local units of government to enter into joint powers agreements to create PACE programs. Under this innovative arrangement, commercial, industrial, nonprofit and multi-housing property owners can take on voluntary special assessments to finance energy efficiency, renewable energy, or electric vehicle infrastructure improvements to their properties. PACE allows companies the opportunity to maintain a positive cash flow while investing in energy upgrades at no cost to taxpayers.
PACE has been implemented in different ways throughout the country, with Minnesota taking a unique approach to it. PACE MN financing is provided by the sale of revenue bonds to third-party capital providers, resulting in a public-private partnership that relies almost entirely on private capital. In 2012, Bremer Bank became the first community bank in the United States to fund a PACE project. Bremer Bank has since agreed to provide up to $10 million in PACE financing through PACE of Minnesota. Within programmatic limitations, up to 100% of a project cost can be financed via PACE.
“PACE financing is a great tool that helps building owners make smart investments in their properties and cut their utility bills through energy efficiency and solar technologies,” said Eutectics CEO Jeremy Kalin, who helped build the PACE MN platform and facilitated its first PACE projects. “PACE is not a subsidy, it’s simply good policy,” said Minneapolis Councilmember and Community Development Committee Chair Lisa Goodman, in urging her colleagues to support the first three PACE projects in the city.
Minneapolis has now joined the list of communities across the country with approved PACE financing for solar and energy efficiency projects. The first three approved PACE projects in the state totaled $685,495 in energy improvements for a life sciences building, a neighborhood grocery store, and an industrial supplier and remanufacturer.
Excelen – Center for Bone & Joint Research and Education, in downtown Minneapolis, invested in new mechanical equipment, upgrades, and building controls. As a result of PACE financing, Excelen was able to double the total scope of energy efficiency and deferred maintenance projects in their building. Along the same lines, Longfellow Market used PACE financing to install new energy efficient lighting and mechanical systems.
Crankshaft Supply went a step further with PACE financing. “As precision manufacturers, Crankshaft already had a clean and efficient operation, so going solar was their natural next step – and without PACE it would not have happened”, said Rob Appelhof, President of Cedar Creek Energy. They installed a 40 KW solar system on the roof of their remanufacturing facility in North Minneapolis, with the help of Cedar Creek Energy.