In the city known for its trees, a new program is aiming to encourage commercial properties to be a little bit greener.

The program, the Property Assessed Clean Energy program, will limit Ann Arbor’s greenhouse gas emissions by urging commercial property owners to install more energy-efficient infrastructure. The Ann Arbor City Council approved the PACE program at its meeting last week.

PACE is a statewide initiative passed last December that local governments have the option of implementing. It is estimated that the PACE program will enable $26 million per year to remain in the city’s economy, according to an Oct. 4 City of Ann Arbor press release.

Through the program, commercial property owners can apply for an assessment to determine the feasibility of installing energy-efficient systems in their buildings. The possible energy improvements — costing between $10,000 to $350,000 — include geothermal systems, Energy Star appliances, solar panels, efficient heating and cooling systems and improved insulation.

The projects are financed through the city’s revenue bonds and offer property owners lower operating costs and several economic incentives such as fixed interest rates and an extended repayment period. The program will only carry out plans for a project that will yield greater energy savings than costs, according to the Ann Arbor City Council website.

Ann Arbor resident Conan Smith, a member of the Washtenaw County Board of Commissioners, voiced his appreciation for the PACE program during the public hearing portion of last week’s City Council meeting. Advocating for sustainable solutions to improve the economy, Smith said the PACE program will create valuable opportunities for businesses.

“When we look at economic development into the future, the green economy is going to be a critical component of that,” Smith said. “And making sure that our businesses have a means to participate in it is going to be equally important for us.”

Wendy Barrott, the city’s community energy coordinator and an employee of the Ann Arbor-based non-profit Clean Energy Coalition, said the PACE program is using voluntary assessments because energy efficiency is considered a public good.

“Cities and townships have the authority to levy assessments on purchases of property to implement projects that are for public good,” Barrott said. “They’ve been used, historically, for sidewalks, sewer disconnects, storm sewer disconnects and a wide variety of projects like that.”

At last week’s City Council meeting, Smith said the Washtenaw County Board of Commissioners might follow the city’s lead and create a county wide program. He said implementing a similar program at the county level would give commercial properties in smaller towns the opportunity to increase their energy efficiency.

“In Ann Arbor, we have a density of commercial property that makes a program like this viable at the city level,” Smith said. “But when you look at some of our smaller townships, for example, they aren’t going to have that kind of population, so they’re never going to be able to offer the bonds that would finance a program like this or qualify for granting from the federal government.”

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