PACE stands for "Property Assessed Clean Energy" and was first piloted in the City of Berkeley in 2008 as a way to help property owners install more clean energy projects, such as high efficiency HVAC and solar panels, by overcoming the high "first-cost" barrier. PACE programs allow qualified property owners in a community to obtain affordable, long-term financing for energy efficiency, renewable energy, and water conservation improvements, and repay it through their secured property tax bills. The PACE structure builds on decades of land-secured financing experience and provides security to project investors, enabling easy access to capital at competitive rates and longer payment periods than traditional loans.
In order for property owners in your community to access PACE, a public agency (city, county, joint powers authority, or other) must "sponsor" the program, first by establishing its legal authority through a routine legislative process to issue certain debts (e.g. bonds) to finance eligible projects (PACE improvements) which are repaid through assessments or special taxes (depending on which statute is used) levied on participating properties. The long-term payments are typically paid through regular property taxes as a special assessment. If there is a PACE default, the whole obligation does not accelerate in full (i.e. only missed payments "in arrears" are due). In addition to establishing the legal foundation for PACE, other key functions for a local government to consider include: finding capital partners, program administration, contractor training, and marketing and outreach.
There are many benefits of PACE. For local governments, PACE can help meet climate action plan goals, reduce GHG emissions, and create local jobs. For property owners, PACE can pay for important building improvements that lower operating costs, guard against utility price escalation, enhance property value, and help generate positive economic activity in local communities. Energy contractors have a new tool to sell projects and gain visibility.
PACE also offers many advantages over other types of financing for clean energy projects:
Over the past three years, more than $700 million in residential (single family) PACE financing has occurred in California. Jurisdictions across the nation are looking to California as a model as they explore similar efforts.
South Bay PACE Providers:
*Information provided by Bay Area Regional Energy Network (BayREN), courtesy of Association of Bay Area Governments.