PACE- Property Assessed Clean Energy
There is a widespread impression that clean energy is expensive. Well, it is, but there are ways of financing it to reduce or eliminate upfront costs. Property owners need to be proactive in looking for these options.PACE financing, or property assessed clean energy financing, gives property owners the chance to make renewable energy and/or energy efficiency retrofits without any upfront costs. That's right, if you live in a participating municipality, you may qualify for a PACE bond which will allow you to pay off the costs of retrofits through your property taxes over a 15 or 20 year period.PACE bonds are an idea that originated from a Berkeley, CA finance company, Renewable Funding. Renewable Funding partnered with the city to help provide homeowners with a way to fund the installation of solar energy systems and energy efficiency improvements. The "Berkeley First" program allowed homeowners to borrow the money and repay it through their home property taxes over a 20 year period.There are several very enticing benefits to this PACE program:- Virtually no upfront costs and no impact on your equity- No credit or general obligation risk
- Tax liability is transferred to the new owner and upgrades remain with the property if sold
- Financing costs are comparable to a mortgage or equity line
- Property tax liens are senior to mortgage debt making borrowers less susceptible to foreclosure
- Financing is guaranteed as it comes from the IRS
- Lower energy bills and improved ROI/positive cash flow
- Immediate creation of jobs in renewable energy and energy efficiency sectorsThe need for PACE bonds is estimated to exceed more than $500 billion in the coming years. The result is a significant decrease in our greenhouse gas emissions and a strengthening of our energy independence. PACE funding will make solar energy and energy efficiency more attainable and create a greater demand for jobs in both industries.
