Clean Fund Completes First Financing for Edina, Minnesota Commercial PACE Program
Edina Pioneers Low Cost PACE Program Structure
San Rafael, CA – April 10, 2012 – Clean Fund, a leading provider of Property Assessed Clean Energy (PACE) finance, has completed the City of Edina’s first PACE financing through the Edina Emerald Energy Program. The funding of a 27kW photovoltaic system for Grandview Tire & Auto is the first privately-financed commercial PACE transaction outside of California. Minnesota’s PACE legislation enables long-term private financing for energy improvements through a special tax assessment structure.
“The launch of this commercial PACE program in America’s heartland is a big milestone for clean energy finance,” says John Kinney, CEO of Clean Fund. “The example of a small city in Minnesota creating a quality program with minimal expense should inspire other cities and counties looking to promote local clean energy job creation.”
Requiring only $11,400 in direct expenses to establish, the Edina Emerald Energy commercial PACE program sets a major precedent for other cities and counties contemplating programs of their own. “Local property owners and energy equipment contractors made this program happen in collaboration with the Edina city government,” said Lynn Hinkle, Policy Director for the Minnesota Solar Energy Industries Association. “When the City Manager and Mayor saw they could promote job creation, stronger businesses and environmental progress without using city money, they became PACE program advocates.” On an ongoing basis program expenses will be recouped through project fees.
The inspiration for the Edina commercial PACE program came from Bradley Hanson of Blue Horizon Solar and Rick Murphy, Grandview’s general manager. Grandview Tire & Auto had already invested heavily in energy efficiency improvements and was looking for the type of long-term financing enabled by PACE in order to add solar power. The two quickly gained broad support for program development, with the Edina Energy Commission, Minnesota Pollution Control Agency, Minnesota Solar Energy Industries Association and Minnesota Department of Commerce all contributing to the final program proposal.
Edina’s PACE program is initially for commercial properties only, allowing the city to defer the larger expense required to develop a residential PACE program. The commercial-only approach also allows the program to use an “open market” or “owner arranged” financing model, which allows property owners to source capital from a provider of their own choosing. In the case of the Grandview Tire & Auto solar project, Rick Murphy of Grandview negotiated financing terms with Clean Fund. The City of Edina then privately placed a bond with those terms with Clean Fund. The city used the funds from the bond sale to reimburse Blue Horizon Solar for project costs, while Grandview assumes an obligation to repay the bond via a special property tax assessment for the 10-year term of the financing.
“The Edina PACE project got our immediate attention because it’s a new approach to getting commercial PACE programs in place quickly, without a lot of government staff time, and at minimal dollar cost,” noted David Gabrielson, Executive Director for PACENow, the leading PACE advocacy organization. “By making it simple, Edina not only minimized cost but made its program highly attractive to property owners, equipment vendors and finance providers. The “Edina Model” is an important addition to the growing array of PACE program options because it shows how local businesses and property owners can be a driving force in developing local PACE programs.
About Clean Fund:
Clean Fund provides long-term project finance for energy improvements to commercial and industrial properties. Clean Fund uses the Property Assessed Clean Energy (PACE) structure to offer financing terms that make long payback energy improvements economically compelling. For more information visit www.cleanfund.comor contact Derek Brown, Managing Director, derek [dot] brown [at] cleanfund [dot] com, (415) 256-8000 x102.
About Minnesota Solar Energy Industries Association:
The Minnesota Solar Energy Industries Association (MnSEIA) represents and serves Minnesota solar value chain. For more information visit www.mnseia.orgor contact Lynn Hinkle, Policy Director, MnSEIA, lhinkle [at] mnseia [dot] org.
PACENow is a national non-profit advocate for Property Assessed Clean Energy (PACE) financing programs that promote energy efficiency upgrades and on-site renewable energy projects for buildings. PACENow a source of information and support for a rapidly growing network of state and local governments, businesses, trades and other organizations and individuals who are interested in promoting energy efficiency using PACE. For more information, visit www.pacenow.orgor contact PACENow at pacenow [at] gmail [dot] com.
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