Property Assessed Clean Energy (“PACE”) is an innovative financing structure that makes it possible for owners of commercial, industrial, and other non-residential properties to obtain low-cost, long-term financing for energy efficiency, water conservation, seismic strengthening, and renewable energy projects.
PACE authorizes municipalities or counties to work with private capital providers such as CleanFund to provide upfront financing to commercial property owners for qualifying improvement projects, and to collect the repayment through annual or semi-annual assessments on the property’s tax bill. The PACE financing term may extend up to 30 years in some jurisdictions, resulting in utility and other cost savings that typically exceed the amount of the assessment payment.
PACE legislation for commercial properties has been adopted in 32 states and the District of Columbia, and is now available in more than 1,000 municipalities across the country.
Unique Benefits of PACE
- 100% financing with no up-front, out-of-pocket costs for the property owner
- Positive cash flow and increased property value, even with long payback projects
- Alignment of landlord and tenant interests, as the PACE assessment, along with the cost savings generated by the improvement project, can be shared with tenants under a triple-net lease structure
- PACE assessment automatically transfers to the new owner upon sale
- Available for most energy efficiency and renewable generation projects, as well as for water conservation and seismic strengthening improvements in select states (see Eligible Improvements)