PACE Financing Program to Help Property Owners Pay for Complying with the New GHG Emissions Cap on NYC Buildings
- April 29th, 2019
On Thursday, 4/18/2019, New York City Council approved the Intro. 1253-C bill, an annual cap on greenhouse gas emissions for buildings 25,000 square feet and larger in the city. Starting in 2024, buildings will need to comply with the newly established emission allowances. For every year the building is not in compliance, it will pay a penalty of $268 per square foot multiplied by the difference between the building’s emissions limit and the reported emissions. The emissions standards differ depending on the building’s occupancy type. More stringent limits are set for 2030-2034 with an advisory board tasked to establish the requirements for 2035 to 2050. For example, a 543,000 square foot building that emits 8,613 tonnes of CO2 would see a potential penalty of $1,077,139.12 in 2024 and $1,649,048.44 in 2030.
Intro. 1252-A titled Establishing a Sustainable Loan Program was also approved on Thursday, 4/18/2019, which is a Property Assessed Clean Energy (PACE) financing program “for the purpose of providing certain building owners with funding for the installation of renewable energy systems or energy efficiency improvements.” Renewable energy systems are defined in the filing as an energy generating system for the production of electric or thermal energy by means of renewable resources such as solar, thermal, wind, geothermal, etc. Energy efficiency improvements are renovations or retrofits to a building that reduce overall energy consumption, therefore decreasing the building’s overall greenhouse gas emissions. In order to acquire a loan, the renewable energy systems must be determined to be achievable through a feasibility study and the energy efficiency improvements must be thoroughly evaluated through an energy audit.
The amount that a property owner can borrow will depend on whether the property is owned by an individual or an entity. As an individual owner, the principal amount of the loan cannot exceed 10% of the real property value. A commercial entity or not-for-profit owner’s loan will be based on the overall property value, projected savings and project cost. Loans borrowed through the PACE must be repaid through a separate line item charge on property tax bills. The administering agent of these loans will then measure, verify and report on the installation and performance of the renewable energy system and energy efficiency improvements.
EnergyWatch’s watchwire utility data management and reporting platform automatically acquires your invoice data, calculates GHG emissions based on various emission factor sets (including what’s outlined in Intro. 1253), and provides reports to analyze potential penalties so we can collectively evaluate energy management and procurement options now and in the future. Contact us or take a look at our solution brief to learn more.