PACE: Property Assessed Clean Energy Financing
Many residential and commercial property owners want to make their homes more energy efficient, but are unable to pay the upfront costs.
Enable municipalities to provide upfront investments through a Property Assessed Clean Energy (PACE) program.
How PACE Works:
PACE is a voluntary program and stands for Property Assessed Clean Energy. It enables interested Cities or counties set up special Clean Energy Development Boards (CEDB) capable of issuing low-interest bonds, and the bond money is used to cover the costs of a loan program. Participating property owners, both commercial and residential, can opt-in and receive a 20 year loan for renewable energy and energy efficiency improvements, and pay the loan back through a 20 year assessment on their property taxes. This arrangement spreads the cost of clean energy improvements—such as a solar array, energy efficient windows, upgraded insulation, etc - across a 20-year payment plan that automatically transfers to the next property owner if the property is sold. The monthly energy savings is always more than the assessment.
What are the benefits to participating property owners?
What are the benefits to cities?
Advantages of PACE Financing
For Our Nation:
1) $18,000 project pays for insulation in attic & walls, new windows, and high-efficiency heat pump for a home
2) Total project cost is $20,000 (including financing & administration costs)
3) Yearly assessment = $1,000 ($20,000 repaid over 20 years)
4) Resulting energy savings = $1,500 (must be greater than the yearly assessment in this case $1,000/yr)
5) Net Result = ($1,500 - $1,000) = $500 savings/yr