Municipal financing programs as an option for overcoming barriers to energy efficiency

This thesis analyzes emerging Property Assessed Clean Energy (PACE) programs to determine the applicability of this financing model to stimulate energy efficiency investments. While energy efficiency improvements have been shown to reduce greenhouse gas emissions and promote a strong economy, implementation levels remain low due to real and perceived barriers. PACE programs are an emerging model intended to increase the rate of clean energy implementation by households and businesses. The thesis examines three existing PACE programs, comparing legal, financial, and other design elements to identify possibilities for program variability and determine "best practices" in program design. These best practices were utilized to develop program design recommendations for Humboldt County, California. The research indicates that PACE programs can stimulate investments in the energy efficiency market, but a program design that prioritizes energy efficiency improvements before renewable energy would achieve larger goals of economic development and energy sustainability. Maximizing program volume and minimizing administrative costs is necessary to operate a program without subsidy. The results of the quantitative analysis indicate a minimum program volume of $5 million is necessary to operate without subsidy while keeping the interest rate competitive. The market analysis indicates that Humboldt County could have a potential program volume of $50 million with effective marketing. The research supports the regionalization of some program components to achieve economies of scale, particularly in rural regions. The technical program design developed in this thesis supported a successful grant application to implement a regional PACE program on the north coast of California.