Property Assessed Clean Energy (PACE) Renewable Energy Program Plan and Pilot Project

Research Team: 
Start Date: 
Jan 1, 2016
End Date: 
Apr 10, 2017
Collaborator: 
Levin Energy Partners
Northport Energy Action Taskforce (NEAT)
Summary: 

The State of Michigan passed Act 270 in 2010 allowing local units of government to establish a Property Assessed Clean Energy (PACE) program. On November 17, the Leelanau County commission voted to establish a PACE program for the entire county by joining Lean & Green Michigan, a statewide shared-services program made up of 18 counties and 6 cities and administered by Levin Energy Partners. This program facilitates commercial property owner’s application of energy efficiency, water efficiency, and renewable energy production which significantly lowers their energy costs by obtaining reasonably priced, long-term financing through a special a special assessment on their property taxes.  A University of Michigan’s School of Natural Resources and Environment (SNRE) Master’s Project Team would implement some of the Action Plan for 100% Renewable Energy in Leelanau Township and the Village of Northport by implementing the PACE program in the area and identifying other financing resources available for local businesses.  The team would develop a survey of eligible businesses to gather data on interest in the PACE program, eligibility of each property, and identify issues that may limit the ability of a commercial property owner to take advantage of PACE.  A transparent, public engagement methodology with businesses and nonprofits will be designed and implemented, identifying eligibility and fit.  The team would also identify challenges to using the PACE program and develop solutions to these challenges, such as identifying alternative sources of finance and navigating additional local government processes and incentive programs.  Several Leelanau County firms have expressed interest in PACE participation.  A pilot project would match the graduate students with Northport Energy and Levin Energy Partners, giving them real world experience.  The project will create a methodology/plan for rural Michigan areas to implement the PACE program.

Levin Energy Partners, LLC, as the statewide administrator of the Lean & Green Michigan PACE program, is well prepared to work with students on the implementation of the Leelanau County PACE program and to help identify financing options – PACE and alternative methods – for local businesses. Levin Energy Partners is the PACE administrator for 18 counties and 6 cities, manages documentation for all PACE deals that happen under the Lean & Green Michigan program, and has trained over 200 individuals from various local governments and private companies on PACE, it’s benefits, and how to take advantage of the program.

Leelanau Township and the Village of Northport use approximately 22 million kW-hours per year of electricity. This energy production can be achieved with a mix of utility and residential scale solar PV, wind energy installations and efficient combined heat and power systems. We envisage a peak capacity of 25.5 megawatts of solar energy production at a cost of $76 million or $38,000 per capita. District heating with sustainable biomass could be viable. Because of unique community leadership profiles, Northport and Leelanau Township are also potential early-adoption candidate communities for advanced energy storage system development and electric vehicle promotion.

This practicum was conducted for Northport Energy Action Taskforce (NEAT) and Levin Energy Partners as an opus requirement for the Master of Science degree in the School of Natural Resources and Environment (SNRE). The goals of this practicum were to assess the potential of Property Assessed Clean Energy (PACE) in meeting NEAT’s future renewable energy goals through a pilot project conducted in Northport. This practicum created and disseminated a commercial energy use survey, analyzed and made recommendations for a pilot project at Thomas & Milliken (T&M) Millworks, and summarized key findings and challenges for future energy projects in Northport.

This practicum assessed several different facility upgrades for a small business in the township of Northport, Leelanau County, MI. Project technologies were: wood biomass combined heat and power (CHP) system, wood chip and pellet boiler, two sizes of solar PV installation, two LED lighting replacement scenarios, and a hybrid project combining solar PV and wood boiler. Project finance focused on PACE and Michigan Saves, while also considering the Rural Energy for America Program (REAP) grant. Recommendations were based on four criteria: cost savings ($), energy savings (kWh), greenhouse gas emissions reductions (kg CO2 e), and facility wood waste reductions (kg).

Overall, the 89-kW solar array generated the highest cost savings and emissions reductions over a 20-year time horizon. The CHP system performed well for energy self-generation and wood waste reduction, but questions remained about greenhouse gas emissions and fuel availability. Technology analysis led to recommendations and suggestions about the broader implementation of PACE in Northport.