As a mayor, I start every day thinking about how our city can create the conditions for more economic growth, job creation and investment in our neighborhoods. And I know the same goes for mayors across the state. Along with the administration and leaders on both sides of the aisle, our number one priority is making Connecticut the best state in the country for families and businesses to build their future.
And while there are many existing economic development tools we can use, there’s a new idea moving its way through Hartford that could have a substantial impact for Connecticut small businesses and homeowners—with positive benefits for our environment, too.
It’s an innovative financing solution called Property Assessed Clean Energy, or PACE. With PACE financing, homeowners can make much-needed home improvements with no upfront costs and pay for them over time through an additional line item on their property tax bill. This innovative form of financing can only be used for work that increases the energy efficiency, water-saving and clean energy potential of a home, like replacing an old water heater or a broken HVAC system with certified, efficient products.
These upgrades can often lower utility bills, and PACE can give households access to home improvements that may be out of reach with other financing options. The most important criteria when applying are the amount of equity in the home and the homeowner’s proven track record of on-time mortgage and tax payments.
By opening the door for more Connecticut households to make home improvements of this kind, there will be more demand for local services. The businesses in the home improvement sector tend to be smaller and their employees are practicing specialized trades. PACE would mean more work in this sector, which translates to more job creation. And these are jobs that can’t be outsourced or automated, and tend to pay family-supporting wages.
It’s estimated that PACE financing would create 2,400 jobs and have a $440 million impact on the Connecticut economy in the first four years. It’s projected that more nearly 17,000 Connecticut homeowners would take advantage of PACE financing, making improvements that would save them more than $325 million on their utility bills over time. These projects would also put a significant dent in the state’s climate-changing emissions, reducing them by more than 350,000 tons.
The program would be run by the Connecticut Green Bank, which already runs a nearly identical program for commercial buildings. PACE also brings an extra level of local governance because each city and town would have to proactively vote to make the financing available to its residents.
Finally, the PACE bill currently being discussed at the Capitol would require the Green Bank to develop consumer protection measures modeled on guidelines released by the Department of Energy just last year. That would give Connecticut the strongest standards in the country when it comes to know-before-you-owe disclosures, live phone calls to confirm homeowners understand financing terms and requirements for PACE providers to resolve and remediate any issues that arise after a project is completed. That’s a form of protection that you’re never going to find with other types of financing.
With all these benefits, it’s easy to see why there’s such broad support for moving this policy forward. At a recent hearing about PACE in the legislature’s Energy and Technology Committee, over twenty different local businesses, industry groups, labor unions, environmental organizations and local government associations—including the Connecticut Conference of Municipalities and the Connecticut Council of Small Towns—voiced their support for bringing this public-private partnership model to our state.
It’s encouraging to see Hartford get creative and put forth innovative solutions, especially since it’s cost-neutral and voluntary for communities. We need more good ideas like PACE that give a boost to our small businesses, get more people working, empower our citizens to invest in their communities, and lead to a healthier environment. PACE programs are a win-win (or more like a win-win-win-win) and legislators should waste no time putting this good idea to work for cities like ours.
Neil O’Leary is the Mayor of Waterbury.