Property Assessed Clean Energy (PACE) Solar Financing in Alberta

What is PACE and how can it help you install solar power?

Property Assessed Clean Energy (PACE) Solar Financing in Alberta

What is PACE and how can it help you install solar power? 

 

The Government of Alberta (GoA) recently announced Bill 10: An Act to Enable Clean Energy Improvements.  Through this bill, municipalities will be allowed to establish an affordable way to finance solar power systems.

Through PACE, municipalities will pay for clean energy upgrades and the homeowner will pay that back over a long period of time through an addition to their property taxes.

Benefits of PACE

PACE provides residential, commercial and agricultural properties the opportunity to take advantage of clean energy upgrades without the need for up-front payment or gross interest rates. Essentially, PACE removes the largest barrier of entry for solar panel installations and energy efficiency upgrades. 

As solar power systems and energy efficient products generally pay for themselves over time, PACE allows for immediate savings through long-term amortization periods.  The ‘long’ payback period of solar panels is now irrelevant since an average home or business may realize savings that are greater than the annual/monthly payments. 

How PACE works?

PACE is voluntary – if a homeowner does not want clean energy upgrades, there is no obligation and property taxes will remain the same as before.  

If one chooses to take advantage of clean energy upgrades,

·         An agreement with the municipality will be completed.  Municipalities will each need to pass a bylaw to enable PACE financing.

·         Municipality will pay for the solar power installation, most likely through a list of certified contractors similar to the Residential and Commercial Solar Program

·         Homeowner pays the municipality back through annual/monthly property taxes

·         Owners will save hundreds or thousands of dollars per year due to solar power and/or energy efficiency upgrades

What projects are eligible?

PACE will apply to residential, commercial and agricultural properties.  Individual municipalities must pass a PACE bylaw to administer the program; what municipalities will participate remains unknown.  

Bill 10 is focused on water conservation, energy efficiency upgrades and renewable energy.  Examples of eligible projects include:

·         Solar panel installations in Alberta

·         High-efficiency heating and cooling upgrades

·         Upgraded insulation

·         Energy efficient windows and doors

Who is paying for this?

One concern is that this will result in higher taxes for everyone.  This is not the case as the program is voluntary – only those that want clean energy upgrades or solar panels installed will pay more on their taxes.  

Municipalities will either use existing capital to finance the projects or use third-party investors to front the capital investment.

Why isn’t this part of the carbon tax?  The carbon tax revenues are allocated from the provincial government.  Property taxes are assessed from individual municipalities.  The cross-over is the reason for new legislation being needed.  By separating the two, it allows homeowners and business owners the choice to install solar panels and energy efficiency upgrades through a voluntary program.

How to get started with PACE

For individuals and businesses to get started with PACE, the GoA must pass Bill 10.  Following this, consultation will occur with various stakeholders to optimize the legislation for all participants.  Once an agreement is in place, the GoA will work with municipalities to pass PACE bylaws which will then open the program to the public. 

Complete PACE legislation is expected to be open in early 2019.

Conclusion

The legislation is still in the early stages of development and many details are yet to be determined.  When fully announced, PACE will impact solar power installations in Alberta in a major way allowing average people to take advantage of clean energy without large capital investments.

Questions, comments or concerns? We would love to hear your thoughts on this.

Hit the buttons below to contact us/get a free solar quote or to read more articles.

Contact Us/Free QuoteRead More on Solar