Clean-Energy Programs Surge Since 2008

States have ramped up their clean-energy programs, incorporating more bonds and bond-related financing options, since 2008, according to information compiled by the National Governors Association.

The NGA’s report, assembled by its Center for Best Practices nonprofit wing, updates through May of this year a 2008 report detailing states’ energy actions. According to the center, the report is intended to give states a summary of what other states and territories are doing and to help them decide whether those actions could be replicated by their legislatures and governors.

The 190-page report was released in August, in the midst of a stalling climate-change effort in Congress. It also covers the two years since the American Recovery and Reinvestment Act went into effect, creating a style of direct-pay taxable bonds that municipal governments can use for certain energy projects.

Nearly every state has done some kind of clean-energy expansion measure, the report said. Thirty-five states either created or updated financial incentives for energy efficiency, and 45 states created or amended their clean electricity incentives.

Of those states, 23 developed or expanded their property assessed clean energy, or PACE, programs that allow localities to finance energy-efficiency or renewable-energy home improvements using tax-exempt bonds.

Those bonds are typically backed by property assessment revenues secured by a senior property lien. However, the PACE programs were essentially put on hold after Fannie Mae and Freddie Mac said in July they would not accept mortgages with PACE loans tied to them.

Some of the states’ energy programs received help in their efforts from the federal government via the stimulus law.

The ARRA dedicated $121 billion to energy efforts, which states have leveraged with their own funds or private capital to create or expand programs, the report said.

Colorado has put together one of the more bond-focused initiatives, the report suggested.

The state created a private-activity bond program for rural clean-energy projects in 2008, authorizing counties to issue revenue-backed PABs of at least $1 million on behalf of property owners to pay for biomass, geothermal, solar, small hydroelectric, wind, and hydrogen facilities.

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Washington
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