New London - The city is considering joining a state program that would allow commercial property owners to borrow money to upgrade their buildings with energy efficient improvements that they would be able to pay for with money saved in energy costs.
The Property Assessed Clean Energy program is a financing model that offers 100 percent upfront financing for qualified upgrades. Building owners pay back the cost of upgrades over 10 to 20 years.
The state has secured agreements with various lending institutions, which would put up the money to pay contractors for improvements, put a lien on the property, and collect payments over time. The liens would be recorded in the land records and passed on with any property sale.
Eligible upgrades include high efficiency lighting, heating and air conditioning improvements and installation of high efficiency chillers, boilers, furnaces and water heating systems.
The savings from upgrades would be used to pay off the loan, according to Bert Hunter, chief investment officer of Clean Energy Finance & Investment Authority.
Only energy improvements that would save more money than the cost of installation would be improved. Eleven municipalities across the state, including Hartford and Bridgeport, already participate in the program.
Hunter, and Lynn Stoddard of the state Department of Energy and Environmental Protection, gave a presentation Monday night to a joint meeting of the Council's Economic Development Committee and the Economic Development Commission.
Frank McLaughlin, co-chairman of the commission, said such a program may be able to help downtown building owners who cannot afford to make improvements to use upper floors of their buildings. He said there is a $25,000 to $40,000 gap in the cost of improvements and the return on the investment.
He also thanked Tammy Daugherty, chief administrator in the mayor's office, who brought the program to the commission's attention.
"I hope we will be able to take advantage of this,'' McLaughlin said.
The City Council would have to pass a resolution supporting the program. The money to pay back the loans would be added to the property owners' tax bills.
"These are very interesting possibilities you've outlined here,'' said Councilor Adam Sprecace, chairman of the economic development committee. The committee took no action Monday night.