The property-assessed clean energy model is an innovative mechanism for financing energy efficiency and renewable energy improvements on private property. PACE programs allow local governments, state governments, or other inter-jurisdictional authorities, when authorized by state law, to fund the up-front cost of energy improvements on commercial and residential properties, which are paid back over time by the property owners.
This program is based on an existing structure known as a "land -secured financing district" often referred to as an assessment district, a local improvement district, or other similar phrase. In a typical assessment district, the local government issues bonds to fund projects with a public purpose such as streetlights, sewer systems, or underground utility lines.
The recent extension of this financing model to energy efficiency and renewable energy allows a property owner to implement improvements without a large up-front cash payment. Property owners voluntarily choose to participate in a PACE program repay their improvements costs over a set time period- typically 10 to 20 years- through property assessments, which are secured by the property itself and paid as an addition to the owners' property tax bills. Nonpayment generally results in the same set of repercussions as the failure to pay any other portion of a property tax bill.
A PACE assessment is a debt of property, meaning the debt is tied to the property as opposed to the property owner(s), so the repayment obligation may transfer with property ownership, if the buyer agrees to assume the PACE obligation and the new first mortgage holder allows the PACE obligation to remain on the property. This can address a key disincentive to investing in energy improvements, since many property owners are hesitant to make property improvements if they think they may not stay in the property long enough for the resulting savings to cover the upfront costs.
Important facts about P.A.C.E
The PACE assessment covers all fees and labor costs associated with the project and bundles the cost into one line on our property tax bill.
PACE typically allows finance terms up to 20 years, longer than many other sources of funding.
This long-term financing enables projects with long paybacks, not just low-hanging fruit.
Long terms mean the annual PACE repayment can be less than the amount being saved on annual utilities on the project, so you may see an immediate increase in cash-in-pocket from day one.
PACE covers 100% of the costs of installing new solar panels or efficiency upgrades on your home.
Allows for secure financing of comprehensive projects over a longer term, making more projects cash flow positive.
Helps some property owners deduct payments from their income tax liability.
PACE is the most effective way to pay for energy improvements for homes. Creating jobs, saving money to homeowners, and helping local governments achieve important environmental goals.
Spreads repayment over many years and removes the requirement that the debt be paid at sale or refinance.
Allows municipalities to encourage energy efficiency and renewable energy without putting general funds at risk.
Can lead to low interest rates because of the high security of loan repayments attached to the property tax bill.
Taps into large sources of private capital, such as the municipal bond markets.
PACE has helped homeowners across the U.S finance solar and energy efficiency improvements that have eliminated billions of dollars of wasteful utility bill spending. Pace provides 100% of the funds you need to purchase efficient equipment such as water heaters, insulated windows and doors, efficient roofing , solar panels and more.