PACE (Property Assessed Clean Energy) is a simple and effective way to finance energy efficiency and renewable energy upgrades to homes and buildings. PACE can pay for new heating and cooling systems, lighting improvements, solar panels, water pumps, insulation, and more for almost any property – homes, commercial, industrial, non-profit, public and agricultural.
Property owners across the U.S. are using PACE because it saves them money and makes their buildings more valuable. PACE pays for 100% of a project’s costs and is repaid for up to 20 years with an assessment added to the property’s tax bill. PACE financing can stay with the property upon sale and is easy to share with tenants. State and local governments sponsor PACE financing to create jobs, promote economic development, and protect the environment.
Nearly half the energy we consume, and three quarters of the electricity we generate in the United States is used to heat, cool, light, and otherwise operate our building stock. Most of this energy is created by burning fossil fuel, so reducing its consumption in a meaningful way will depend on reducing energy use in buildings. A number of barriers have thus far limited wide scale adoption of energy efficiency and renewable energy measures.
PACE is the Solution
PACE overcomes challenges that have hindered adoption of energy efficiency and related projects in our nation’s built environment. PACE financing solves the upfront cost barrier by providing 100% financing for project costs. Long term repayment of up to 20 years makes longer payback projects immediately cash flow positive and buildings more valuable. For contractors and real estate agents, PACE makes it easier to close a larger sale.
- Currently funding Commercial, Residential and Public Property improvements.
- Funding is provided for 100% of installed project costs.
- The obligation is associated with the property & repaid through property taxes.
- Lower financing rates than other products in the market may be available.
- Longer financing terms than would otherwise be possible for fixed rate obligations.
- Can enable projects to be cash flow positive within a one year period.
- The borrowing structure may allow for favorable accounting treatment.
- Allows for equitable sharing of costs and savings with current tenants and future owners.
Property owners are more focused today than ever before on energy efficiency and renewable energy improvements. PACE helps them save money by lowering energy costs. Long term pay back makes PACE funded projects immediately cash flow positive.
Creates local jobs
PACE funded projects create more jobs and economic activity. According to the 2011 study by ECONorthwest, every $1 million in project spending results in 15 new jobs and $2.5M in economic output.
Helps the environment
PACE helps communities achieve important energy efficiency and renewable energy goals. Efficiency projects upgrade old equipment which reduces energy use, while renewables replace fossil fuels and reduce greenhouse gas emissions.
Common Questions and Answers:
Q: What is PACE?
A: PACE is a funding mechanism intended to make energy-saving projects more affordable.
The initial letters are an acronym which stands for “Property Assessed Clean Energy”
Q: How does PACE work?
A: Clean energy projects, if properly designed and installed, can produce substantial energy
savings for the property owner. Typically, the installation will be projected to save its own
cost in 20 or fewer years. Financing is repaid through an increase in the owner’s annual
property tax assessment. Ideally, your project will create a net positive cash flow, because you
will save more annually on energy cost than your increased tax assessment.
Q: What if I want to sell my property in a few years?
A: The property tax assessment–and the energy cost savings–may stay with the property. All costs
and benefits may transfer to the new owner. You may sell your property at any time. You must
notify potential buyers that your property carries a PACE lien. The disposition of the lien may be subject to the negotiation of sale.
Q: Am I borrowing public money?
A: No. There is no public finding involved. All PACE financing is via privately purchased
bonds. Once approved, your project costs are first funded to complete your project then bundled with other similar project funding.
Although all financing is achieved privately, the applications, approvals and bundling are
overseen by a governmental subdivision–The Missouri Clean Energy District.
Q: How do I know whether I’m in the district?
A: The district is composed of counties and municipalities all over Missouri. If your city or
county has not yet joined the district, it may do so at no cost to the local government. You
can find out whether your local government is a member by clicking HERE .
Learn how to bring your local government into the district by clicking HERE.
Q: Who is eligible?
A: Anyone who wishes to access funding for their energy improvement projects -owners of virtually any property type are eligible.
Q: Is PACE available for residential property improvements?
A: Yes! The Missouri Clean Energy District provides access to funding for all property types.
Q: How do I apply?
A: Full information about the application process and an application form can be found HERE
See how PACE works for commercial projects.
(It works pretty much the same way for residential but we haven’t got a video for that yet)