PACE Financing Programs, or Property Assessed Clean Energy, helps building owners secure energy efficiency changes without paying anything up front. There are a variety of things PACE can pay for including, enhanced HVAC systems, better lighting, or water pumps. It can also pay for the installation of solar panels or insulation. The program applies to residential homes as well as commercial and industrial buildings.
Why Building Owners Use PACE Financing Programs
Building owners use PACE because it makes energy efficient changes affordable. Without the need to pay any costs out of pocket, building owners can make their buildings more valuable without going broke. Any payments made for PACE are done through the property taxes. The lien remains on the property until the current owner sells it.
How PACE Works
PACE is a national program; however, there are local branches to help buildings in every area. The state legislation is what allows local municipalities fund the programs. No matter the state you live, the premise is the same. You can receive funding for 100% of the project and you can finance the costs for up to 20 years. It does become a lien on your property and it supersedes any other liens on the property.
How PACE Helps
PACE helps building owners because of its affordability. You do not have to put any money out upfront, but you can make many changes to the property. Building owners often make complicated retrofits that have the largest impact on the energy efficiency of the building. Typically, building owners receive such a significant amount of savings on their energy bills that it surpasses the amount they must pay towards their taxes to pay the lien back.
PACE also helps build the economy in local areas. It helps contractors in the area get business and helps the community work together. The program also encourages the growth of new businesses in the area. This helps to increase the number of available jobs, which helps the area overall.
Selling the Property
Building owners should realize that the PACE lien remains on the property – it is not tied to the seller. This means that if the current owner sells the property with the lien attached, the buyer has to be willing to assume the lien. Not all buyers will be willing to do this, which could cause problems with selling the property down the road. However, an incentive to using the program is the ability to make significant energy efficiency changes without waiting to make the money back in profits. By being able to sell the property with the lien, property owners can make changes to see an immediate increase in their profits without issue.
PACE financing programs help not only building owners, but the economy as well. By making energy-efficient changes affordable, building owners can decrease their footprint on the environment while still making a profit. Just remember, the program becomes a lien on your property, which takes priority over any other financing you may have. As long as you can afford the payments, you can make a difference in your building with PACE.
