Fayetteville is the first city in Arkansas to offer property owners monetary incentives to implement energy-efficient systems on their land to stimulate the economy while, at the same time, making Arkansas more environmentally friendly.
The Fayetteville City Council unanimously passed an ordinance in April to create an Energy Improvement District in Fayetteville, according to a Fayetteville City Council press release.
The Energy Improvement District will create several bond-funded financing programs for property owners that are aimed at improving renewable energy, energy efficiency and water conservation on residential, commercial and industrial properties.
One such financing program, Property Assessed Clean Energy, is a voluntary program that enables property owners to borrow money with very low interest rates in order to implement renewable energy, water conservation and weatherization improvements to their properties.
The loans are structured so property owners can repay them with the savings resulting from the improvements.
“Through PACE, property owners will be able to add improvements, such as putting solar panels on their house and instead of paying their average electric bill of, say, $50 per month to the American Electric Power, they would pay the $50 toward the loan, and when it is paid off, they will own the solar panels and have free energy from that point forward,” said Fayetteville City Council member Sarah Marsh.
The debt from the loans will be tied to the property, not the owner, so the loans stay with the property if it is sold. This makes it practical for a property owner to make the improvements, even if they don’t intend to own the property for the entire payback period.
PACE has been a priority for a long time, Mayor Lioneld Jordan said. Legislation allowing PACE to be implemented was passed by the state legislature this year and signed by the governor in April.
Energy Improvement Districts will benefit Arkansas by creating jobs and stimulating the economy, protecting citizens from the rising cost of energy and non-renewable fuels, providing citizens with options for financing improvements that they could otherwise not afford, providing a positive cash flow while improving energy conservation, increasing the value of the properties, improving Arkansas’s air quality and protecting natural resources and promoting energy independence and security for the nation, according to the Arkansas State Legislature.
The Energy Improvement District will be managed by a board of seven directors who will meet quarterly at minimum, with one member being appointed by Mayor Jordan. The other six members will be appointed by the city council through the Boards and Committees selection process.
Once the board is selected by the beginning of 2014, they will begin working to establish the PACE program in Fayetteville.
“Arkansas is the 28th state to pass PACE legislation,” Marsh said. “A group of stakeholders has been working to pass the legislation since 2010. It failed the first attempt to pass in the legislature by one vote, but finally passed in 2013.”
Groups, such as the Fayetteville Forward Green Economy Group, the Citizens First Congress and the Arkansas Advanced Energy Association, played a large role in educating legislators as well as the public on the importance of green-friendly legislation, Marsh said.
The Energy Improvement District intends for the program to provide a model for any other municipality in Arkansas that is interested in adopting energy efficient equipment.
“The next step will be to pass REFIT, the Renewable Energy Feed-In Tariff, which requires power companies to buy back power from producers at market rate,” Marsh said. “That means that instead of getting a utility bill, I would get a utility check. This important legislation would incentivize landowners to install renewable energy systems while increasing the amount of green power on our utility grid. Many other states currently have REFIT, and it's time for Arkansas to get on board.”