Property Assessed Clean Energy (PACE) Finance Resource Center
Property Assessed Clean Energy (PACE) financing is a mechanism for achieving energy retrofit or energy generation of existing privately owned buildings by utilizing special assessment district financing techniques to finance projects, with private capital, via property owners’ property tax bills. Practically speaking, a PACE program can be established to address a single piece of property, a district, a region or an entire state. This makes PACE a very flexible and easily implementable financing tool. In essence, the property owner is able to access affordable capital in the form of a loan for energy efficiency upgrades, retrofit and/or generation to their home or business. In turn, the municipality places a special assessment on that property’s tax bill. This assessment is collected during the regular property tax payment process with payments made to the private lender. Over time, the loan is paid off and the property sees measurable energy savings creating a more sustainable energy solution and community.
One of the major benefits of the PACE model is that the tool can be tailored to broad and narrow programs at the same time. Communities can create broad programs that encompass larger geographic districts and allow for multiple uses such as housing, commercial, industrial and mixed-use. Conversely, programs can be designed to be very narrow such as assistance for low-income households, manufacturers, business districts, etc.
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