Property Assessed Clean Energy (“PACE”) is an alternative financing tool enabling owners of commercial and industrial properties to receive low-cost, long-term financing for energy efficiency, water efficiency and renewable energy projects. PACE is passed via state legislation and gives local governments the authority to collaborate with private lenders (such as Petros PACE Finance) to provide financing for Eligible Upgrades that are paid through a property tax assessment mechanism.
PACE financing enables businesses to generate immediate positive cash-flow by financing energy retrofits over a 15-30 year term; the property assessed characteristic of PACE makes this possible. By attaching the PACE loan repayment to the local government’s property tax special assessment process, PACE loans can be extended up to the useful life of the project, thereby making energy savings generated from the project greater than the loan repayment. In many states, this positive cash-flow is required before the project can be approved.
As a tool for boosting economic development and promoting sustainability, C-PACE also benefits communities while requiring minimal effort from local governments . A study from Lawrence Berkeley National Laboratory also found that that commercial building owners very rarely miss payments on property assessed clean energy loans. Read the full report here.