For immediate release: September 19, 2022
AUSTIN, Texas – Thanks to the efforts of Texas Water Trade, Keeping PACE in Texas and other volunteer stakeholders, the opportunities for Texas developers to use low-cost financing for energy and water efficiency infrastructure, including water reuse projects, just got bigger.
Due to a recent change in the guidance under the state’s PACE financing program, builders can now utilize the financing for developed properties as well as undeveloped, greenfield properties that have been prepared for construction with improvements such as a gravel road, fencing or lighting.
PACE financing had previously only been available for already-developed building sites – a major impediment since energy and water efficiency upgrades are more costly if the project has already been built. It had previously excluded projects on undeveloped parcels.
“This is a huge step forward to help a vast number of undeveloped properties, slated for development across Texas, to qualify for potential financing from PACE,” said Charlene Heydinger, executive director of Keeping PACE in Texas and president of the Texas PACE Authority, who helped spearhead the guidance change. She noted that the earlier guidance made it “nearly impossible” for greenfield properties to seek financing for energy- and water-efficiency infrastructure.
The guidance change is a direct result of a report issued last year by Texas Water Trade and the National Wildlife Federation requesting that PACE Authority explore the feasibility of allowing greenfield properties to be included in the financing for water reuse and other efficiency-related improvements. The revised guidance was approved earlier this month by Keeping PACE in Texas, the nonprofit entity charged with implementing the PACE statute approved by the state Legislature in 2013.
Under the new guidance, properties that were previously appraised by an Appraisal District as having any improvements – a light post, a fence, a gravel road, a mobile home, etc. – can be considered “a developed lot,” therefore making it eligible for PACE financing.
“This is a game-changer that will greatly expand opportunities for water reuse projects that can strengthen long term water security in Texas,” said Sharlene Leurig, CEO of Texas Water Trade, an Austin-based nonprofit group. “It means that a lot of land slated for development across Texas can now qualify for this valuable form of financing that can cover upfront capital costs of efficiency improvements.”
As last year’s report by the Texas Water Trade and National Wildlife Federation made clear, water reuse is an enormous but still widely underutilized solution to strengthen the state’s long-term water security amid rapid population growth and limited water resources.
While such projects are becoming more commonplace – Credit Human’s new headquarters in San Antonio is collecting and reusing rainwater and AC condensate, enabling it to use 97 percent less drinking water than comparable buildings; Austin’s landscape is dotted with public and commercial properties that are repurposing rainwater, condensate and even wastewater, thereby extending the city’s core water supplies – widescale adoption of water reuse is not happening nearly quickly enough.
Among the biggest obstacles holding developers back is the upfront capital costs – a problem that the Property Assessed Clean Energy (PACE) financing program could help fix. To date, more than $227 million of PACE financing has been mobilized for energy and water efficiency projects in Texas, but precious little of that money has gone towards water reuse infrastructure.
To address this gap, the report recommended that PACE financing be expanded to include developments done on greenfield sites. During the summer, more than 50 Keeping PACE in Texas stakeholder volunteers, including Texas Water Trade staff, revised the guidance to do just that.
Peyton Fleming, Texas Water Trade, firstname.lastname@example.org
Charlene Heydinger, Keeping PACE in Texas, email@example.com