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enewable energy installations (25 percent). 78 MEA determines a community’s funding using a formula
that considers both individual community population and the total number of participating
communities. MEA anticipates grants of between $30,000 and $500,000. 79
The program was launched in February 2013; communities had to apply for the grant by April 2013. 80
Currently, 26 incorporated municipalities, seven counties, and Baltimore City have applied for grants. 81
Emerging Public-Sector Finance Opportunities and Programs
Property Assessed Clean Energy (PACE)
In 2014, the Maryland General Assembly made important technical revisions to
the 2009 language that authorized local governments to institute PACE programs
for commercial properties. 82 PACE programs enable property owners to finance
clean energy improvements and repay the cost through a special assessment on
their property taxes. PACE has several advantages:
Long repayment terms up to 25 years help stretch out the payments and
make them smaller.
Assessments can transfer to a new owner upon sale of the property.
PACE liens provide very strong security for the financing, helping to lower
interest rates.
The strong security also helps to simplify and speed up underwriting.
The security of PACE liens rests on the priority of property tax liens over
mortgage liens in the event of foreclosure. In effect, PACE liens step in front of
PACE programs
Years Active
2014 state
authorization
Eligible Participants
Commercial
Target Technologies
Energy efficiency
Renewable energy
Financing Products
Repaid through an
assessment on the
property tax bill
Status
No local programs
operational yet
even the first mortgage lender. This priority led the Federal Housing Finance Agency (FHFA) to prohibit
Fannie Mae and Freddie Mac from accepting mortgages on homes with PACE liens; FHFA reportedly
loosened the prohibition in early November 2014, re-opening the door for residential PACE programs
nationwide. To date, most PACE programs have focused on the commercial sector.
78 “Maryland smart energy communities.” Maryland Energy Administration. Accessed September 20, 2014:
http://energy.maryland.gov/Govt/smartenergycommunities/
79 “Maryland smart energy communities: FAQ page.” Maryland Energy Administration. Accessed September 20,
2014: http://energy.maryland.gov/Govt/smartenergycommunities/faq.html
80 “Maryland Energy Administration announces the Maryland smart energy communities program.” (2013).
Maryland Energy Administration. Accessed September 20, 2014:
http://energy.maryland.gov/documents/MarylandEnergyAdministrationAnnouncesTheMarylandSmartEnergyCom
munitiesProgram262013.pdf
81 “Maryland smart energy communities.” Maryland Energy Administration. Accessed September 20, 2014:
http://energy.maryland.gov/Govt/smartenergycommunities/
82 “Chapter 472 (Senate bill 186) Clean energy loan programs – private lenders – collection of loan payments.”
(2014). State of Maryland. From 2014 Laws of Maryland. Accessed September 18, 2014:
http://mgaleg.maryland.gov/2014RS/Chapters_noln/CH_472_sb0186t.pdf
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