Michigan

Incentives/Policies for Renewables & Efficiency

Local Option - Property Assessed Clean Energy

Last DSIRE Review: 09/11/2012

Program Overview:

State:	Michigan
Incentive Type:	PACE Financing
Eligible Efficiency Technologies:	Lighting, Chillers , Furnaces , Boilers, Heat pumps, Central Air conditioners, CHP/Cogeneration, Heat recovery, Energy Mgmt. Systems/Building Controls, Caulking/Weather-stripping, Duct/Air sealing, Building Insulation, Windows, Roofs, Motor Vehicle Charging, Water Usage Reduction Measures
Eligible Renewable/Other Technologies:	Solar Water Heat, Solar Space Heat, Photovoltaics, Landfill Gas, Wind, Biomass, Geothermal Heat Pumps, Geothermal Direct-Use
Applicable Sectors:	Commercial, Industrial
Authority 1: Date Enacted: Date Effective:	MCL 460.931 et seq. 12/14/2010 12/14/2010

Summary:

Property-Assessed Clean Energy (PACE) financing effectively allows property owners to borrow money to pay for energy improvements. The amount borrowed is repaid via a special assessment on the property over a period of years. With the passage of HB 5640, Michigan has authorized local governments to establish such programs, as described below. (Not all local governments in Michigan will choose to offer PACE financing; contact your local government to find out if it has or intends to establish a PACE financing program.)

The State of Michigan signed PACE legislation into law on December 14th of 2010, authorizing municipalities to establish a loan program to provide financing for clean energy (energy efficiency and renewable energy project) improvements to commercial and industrial property owners via local ordinance. The legislation authorizes municipalities to enter into PACE agreements with commercial and industrial property owners, provide financing, and collect PACE assessments to repay the loans. Municipalities may choose to use federal grants, such as Energy Efficiency and Conservation Block Grants (EECBG), or other "funds available for this purpose" to establish PACE programs.

Michigan's legislation stipulates that PACE assessments for property owners with outstanding mortgages must receive written consent from mortgage holders. In addition, qualifying energy efficiency technologies may include electric vehicle charging and water reduction infrastructure costs.

As of October 2011, the City of Ann Arbor has launched a PACE program.

Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

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