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Committee raises cautions on expanding PACE financing to commercial properties
Summary
Senators discussed a bill to expand Property Assessed Clean Energy (PACE) financing from residential to commercial properties, with members citing title-transfer and bankruptcy problems in other states and asking for a careful review before expansion.
The committee discussed draft language to expand PACE (property‑assessed clean energy) financing—already enabled in Vermont for residential projects—to commercial properties, but several senators urged caution and additional study.
Why it matters: PACE programs allow owners to repay clean‑energy or efficiency investments through a property‑tax assessment. Expanding the program to commercial properties could broaden financing for energy upgrades but may complicate title transfers, commercial lending and bankruptcy proceedings.
What senators said - Concerns from banks and practitioners: One member said lenders have warned that PACE obligations can make title transfers and sales more difficult and can complicate closings when PACE providers go bankrupt. That experience was described in a California case cited by a senator who recounted a personal example where a PACE assessment complicated a home sale. - Difference between residential and commercial: Senators noted commercial PACE is treated differently in other states and that the committee should first consider whether Vermont’s residential experience generalizes to commercial markets. - Prioritization: Some senators said the PACE expansion should be a lower priority this session unless the committee can resolve title and lender concerns.
Next steps: A senator said she would introduce draft language and the committee agreed to review details, including lender perspectives and consumer‑protections language, before advancing an expansion bill.
