What is PACE Financing?
The following information is compliments of PACENation.
PACE in 90 Seconds...
What is PACE?
Property Assessed Clean Energy (PACE) is a financing mechanism that enables low-cost, long-term funding for energy efficiency, renewable energy and water conservation projects. PACE financing is repaid as an assessment on the property’s regular tax bill, and is processed the same way as other local public benefit assessments (sidewalks, sewers) have been for decades. Depending on local legislation, PACE can be used for commercial, nonprofit and residential properties.
How does it work?
PACE is a national initiative, but programs are established locally and tailored to meet regional market needs. State legislation is passed that authorizes municipalities to establish PACE programs, and local governments have developed a variety of program models that have been successfully implemented.
Regardless of model, there are several keystones that hold true for every PACE program.
- PACE is voluntary for all parties involved.
- PACE can cover 100% of a project’s hard and soft costs.
- Long financing terms up to 20 years.
- Can be combined with utility, local and federal incentive programs.
- Energy projects are permanently affixed to a property.
- The PACE assessment is filed with the local municipality as a lien on the property.
Why is it becoming so popular?
Property owners love PACE because they can fund projects with no out-of-pocket costs. Since PACE financing terms extend to 20 years, it’s possible to undertake deep, comprehensive retrofits that have meaningful energy savings and a significant impact on the bottom line. The annual energy savings for a PACE project usually exceeds the annual assessment payment, so property owners are cashflow positive immediately. That means there are increased dollars that can be spent on other capital projects, budgetary expenses, or business expansion.
Local governments love PACE because it’s an Economic Development initiative that lowers the cost of doing business in their community. It encourages new business owners to invest in the area, and creates jobs using the local workforce. PACE projects also have a positive impact on air quality, creating healthier, more livable neighborhoods.
How can I PACE a building improvement?
Local solutions organizations such as era maintain high levels of familiarity with PACE and other finance, grant, and incentive options. We at era are always happy to answer questions, and—if you prefer to self-perform research—www.PACENation.us has all the tools and resources you need to get started. If you fall outside of the era service area, check PACENation to see if your state has passed a PACE statute, and if your area has an active program. If not, contact PACENation to find out if there is a local initiative in development and we may be able to put you in touch with a working coalition. We look forward to hearing from you!