OAKLAND COUNTY — A new financing tool to fund environmentally friendly upgrades to reduce energy costs could soon be available for Oakland County businesses to take advantage of.
Through a resolution which is supposed to be finalized and approved Oct. 26, the county will become a PACE (Property Assessed Clean Energy) program district through Lean and Green Michigan.
“It’s a financing tool to help businesses do energy retrofits and get more favorable terms with banks to get longer terms for paybacks,” said County Commissioner Dave Woodward, D-Royal Oak. “The payback has to be less than the energy savings on the project.”
Projects eligible for PACE include heating, cooling, lighting, insulation, solar panels, fuel cells, motors and other technologies that produce energy.
The program offers 100 percent financing, which can be paid back over 20 years through a special assessment on property taxes.
Buildings eligible are commercial, industrial, agricultural, nonprofits and multi-family residential.
“This is a complete gamechanger, because the whole problem with clean energy retrofits is you may be wasting money at your business, but you’re not about to fix it because it will cost a lot of money and you won’t break even for 10 or 12 years. Most companies or nonprofits, they just can’t do something like that,” said Andy Levin, the president of Lean and Green Michigan.
Woodward explained that if a business owner saves $2,000 a year in energy costs after completing the upgrades, the payments on the loan for the project must be less than $2,000 a year. Levin said the contractor must guarantee that energy-saving costs will be greater than loan repayments.
“So it’s a win-win to the business immediately by reducing energy costs, their costs are lower than what it actually costs to do, and it promotes job creation and saving the environment,” Woodward said.
There are already 19 counties throughout Michigan that are PACE districts, as well as nine townships or cities, which are all located in Oakland County. The program began in 2010, and Southfield became the first municipality to participate.
“I really care about Oakland County personally, plus it is the second most populous county in the state and a real economic engine and center of economic innovation in the state,” Levin said. “It’s important for everyone that Oakland County participates in PACE.”
Levin said the program has grown because it is focused on business, not politics.
“This whole project that we’ve been working on is above or separate from politics. It’s really nonpartisan. It’s just good business and it doesn’t use any taxpayer dollars,” Levin said. “It’s a willing property owner, a willing contractor and a willing lender coming together to do something that benefits all of them.”
Levin said his organization has been working with the county for about a year to create the PACE district. A resolution for it was introduced in late September and could be approved at an Oct. 26 Board of Commissioners meeting.