Property Assessed Clean Energy (PACE) financing was named one of the top 20 “world changing ideas” by Scientific American magazine. The concept was designed to overcome one of the most significant barriers to solar and costly energy efficiency retrofits: up-front costs. PACE uses the concept of voluntary assessments for repaying public sector bonds, but it is now applied to private sector businesses, industries, and residences.  Typically, an investment grade energy audit (IGA) is required as a financing prerequisite. PACE promotes economic development in the commercial, and industrial sector by providing financing with:

• No Down Payment                                         • No Personal Guarantee

• 100% Financing                                               • Triple Net Lease Pass-through   

• 15-25 Year Term Project                                 • Fixed Rate/Fixed Payment

•  Positive cash flow from day one                 • Off Balance Sheet Treatment

The three primary objectives of PACE financing program are:

  1. Encourage energy efficiency in buildings to reduce greenhouse gas emissions,
  2. Reduce energy costs and promote utility savings for building owners, and
  3. Foster green jobs and boost local employment opportunities.

Some of the many eligible projects include energy efficiency measures, high-efficiency lighting, roofs, heating ventilation air-conditioning (HVAC) upgrades and controls, boilers, furnaces, and water heating systems, as well as renewable energy systems such as solar PV panels and fuel cells. In addition to low interest rates, PACE financing has distinct advantages over traditional loans: PACE loan stays with the property upon sale, transferring to the new owner and commercial property owners may pass payments through to tenants.

How PACE Works

  1. Owner makes a $25 qualifying application to the program.
  2. Owner presents an energy audit itemizing the projects to be financed.  This audit establishes the expected costs and energy savings for the measures to be implemented, including reimbursing the cost of the audit.  It needs to demonstrate that the loan can be fully cash-flowed with annual energy savings.
  3. Negotiate the final term of the loan with PNC Bank.  Maximum term is around 20 years but the typical term extends a few years beyond the expected payback term from energy savings.
  4. Implement the project and apply for reimbursement from the loan line of credit.