PACE Financing in Clean Energy
Property Assessed Clean Energy (PACE) Financing is a tool for funding energy efficiency and renewable energy projects in private sector buildings, established through local ordinances and state legislation. PACE provides 100% funding, allows for up to 20 years of repayment, and offers benefits like no upfront costs and immediate positive cash flow. Despite some challenges in specific regions like Virginia, PACE continues to grow nationally, with programs in various states catering to different property types including commercial, industrial, and multi-family buildings.
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Presentation Transcript
Property Assessed Clean Energy (PACE) Financing
What is PACE Energy Efficiency and Renewable Energy Financing Private sector buildings Put in place by localities- by ordinance Requires State enabling legislation PACE loan is treated like a tax assessment Started in 2009 in CA PACE laws in 31 states and DC
Why Use PACE 100% funding No upfront costs Funding for up to 20 years Immediate positive cashflow No payoff on sale PACE transfers to new owner Possible off-balance-sheet treatment Ability to pass payments through to tenants
PACE in Virginia Law enacted in 2009- but flawed Lacks priority lien status PACE Loan requires a lien status equal to tax lien- Treated as voluntary special assessment Virginia PACE Coalition to fix the law Lien status issue Lender consent
Virginia PACE Coalition Trane Boland Siemens ABM CREE Hannon Armstrong S&S Sales HCYU Alt-Energy Urban Ingenuity Renewable Funding Abacus Property Solutions Community Housing Partners Local Energy Alliance Program Virginia Energy Efficiency Council Richmond Region Energy Alliance
Growth of PACE Property Types
Connecticut PACE Program Commercial, industrial & multi-family Requires the consent of the existing mortgage lender Requires SIR>1 Renewable and energy efficiency
Connecticut PACE Program 200+ contractors trained 20 qualified capital providers Closed $30 million in deals -average size $700K Class B buildings $70 million of projects in the pipeline 17 mortgage lenders have provided consent
PACE Deal Snapshot Hilton Hotel Universal City, CA Amount - $7million Term 20 years Rate 7% fixed 50% reduction energy usage Energy & water savings - $800,000/yr ROI 78% Local incentives sweetened the deal
PACE Deal Snapshot Shopping Center, Norwalk, CT Amount - $170,000 Term 13 years Rate 4.5% fixed 35,000 SF building Exterior LED Lighting Energy savings - $17,000yr
PACE Deal Snapshot Office Building, Toledo, OH Amount - $1.4 million Term 15 years Rate 4.32% fixed 60,000 SF building Cooling tower, lighting upgrade, hot water pump upgrade, building automation controls, new fan motors Estimated energy savings- 48%
