Financing Your Green Projects: Property Assessed Clean Energy or PACE
The main hurdle for green energy projects is financing. Upfront costs for energy conservation measures such as LED lighting retrofits, energy efficient HVAC system upgrades, solar panels, etc. usually prevent property owners from making the investment.
Property Assessed Clean Energy, or PACE, programs look to eliminate that hurdle. Through PACE, a property owner can finance the costs of energy projects through an additional assessment on their property taxes.
The financing can cover all costs of the project and repayment can be extend out to up to 20 years. The financing is secured by the property. This means that the debt is tied to the property as opposed to the property owner. Therefore, the repayment obligation may be transferred with property ownership if the buyer agrees to assume the PACE obligation.
Because the debt can be transferred with the property, it will eliminate a property owner’s concerns about investing in energy improvements for a property they may not stay in for the long term.
Key benefits for property owners include:
All costs for the energy project can be financed - no upfront costs
Repayment terms can extend for up to 20 years.
Energy savings are typically greater than annual assessment - cash flow positive from day 1
The assessment is attached to the property rather than the individual property owner
Can be combined with other incentives programs
Improvements can increase the value of the property - increased resell value
Local and state governments see benefits in PACE programs through the creation of local, green jobs, reduced strain on utility infrastructure, and improved buildings.
PACE programs are for both residential (R-PACE) and commercial (C-PACE) properties. Currently, C-PACE programs are the most common. PACE programs in the Washington, DC region include:
DC PACE - www.dcpace.com
Maryland - https://www.md-pace.com/
Montgomery County, Maryland - https://www.montgomerycountymd.gov/green/energy/pace.html
Arlington, Virginia - https://arlington-pace.us/
Several states and municipalities outside of the DMV have PACE programs. Organizations such as PACENation keep track of PACE programs throughout the country and can provide links.
Impact Energy is a registered vendor with DC PACE and are knowledgeable of other financing programs to help eliminate the upfront cost of energy projects. We can assist you in navigating the entire process - planning, financing and implementation. Contact us now for a free consultation.