USC Price Research Professor Adam Rose and Research Associate Professor Dan Wei have had a recent study featured by Prevention Webb, an international knowledge sharing platform on disaster risk reduction managed by the United Nations Office for Disaster Risk Reduction (UNDRR). The study, “Impacts of the Property Assessed Clean Energy (PACE) Program on the Economies of California and Florida,”was undertaken in conjunction with USC Price’s Schwarzenegger Institute, and was sponsored by one of the leading companies providing PACE financing, Ygrene Energy Fund, Inc.
Property Assessed Clean Energy (PACE) is a way to finance a wide range of energy and water efficiency, renewable energy, and hazard mitigation improvements permanently attached to residential and commercial properties. Established by state statutes and enabled by local governments, PACE financing, unlike traditional alternatives, is structured as an assessment to the property and not the property owner. PACE provides financing to cover one hundred percent of the up-front cost of qualified structural improvements, which the property owner repays annually or semi-annually through a special assessment added to the property tax bill.
PACE financing was originally
intended to promote the benefits of reducing energy and water use and
pollutants associated with this use. More recently, it has expanded to
include reduction in hazard vulnerability, primarily in relation to earthquakes
in states like California and hurricanes in states like Florida.
The results for California indicate that, during the up-front investment period (2013-2018), Ygrene PACE financed property improvements resulted in an average annual increase of gross state product (GSP) of $134.7 million and employment of 1,305 full-time equivalent (FTE) jobs. The economic increases for California over the entire period in which the improvements are operative (2013 to 2067) is estimated to include: a net present value increase in GDP of $661.4 million, a cumulative increase in person-year jobs of 9,774, and avoided property damage from earthquakes of $2.36 million. The prevention of property damage and relocation costs is likely to increase significantly after the initial experiences with this use of PACE financing. Another hazard-related potential area of expansion of PACE financing relates to people adopting solar energy for their homes and businesses to shield them against centralized electricity grid shutdowns in the face of California’s wildfires.
The web posting can be found at: https://www.preventionweb.net/publications/view/66179
Professors Rose and Wei have teamed up on several studies of the economic consequences of and resilience to natural disasters and terrorist attacks in their role as Research Fellows of the USC Price-Viterbi Joint Center for Risk and Economic Analysis of Terrorism Events (CREATE). For more information on their work, please visit create.usc.edu.