Products & Solutions
PACE

Setting the PACE: Financing Commercial Retrofits

Removing barriers to achieving energy efficiency

What's your biggest barrier to achieving energy efficiency?  Lack of funding? If so, you're in good company. In each of the last six annual Energy Efficiency Indicator (EEI) surveys, executives said the biggest barrier to achieving energy efficiency is access to capital.

 

Fortunately, new financing models are emerging that create incentives to move forward with energy efficient retrofits. One relatively new program, Property Assessed Clean Energy (PACE), is growing in popularity. According to an issue brief released in 2013 by the Institute for Building Efficiency, PACENow and the Urban Land Institute, there are currently 15 PACE programs in the U.S. accepting applications to finance building efficiency projects. Combined, these programs may spur action that helps unlock a potential $280 billion investment opportunity.

How does PACE work?

Property owners participating in a PACE program receive financing support for energy efficiency or renewable energy measures from a local government or approved financial institution, and the investment is repaid by an assessment or other like charge added to the owner’s property tax bill for up to 20 years.

 

How do PACE programs benefit building owners and financiers?

Program designers and advocates believe that PACE financing structures offer significant advantages over other financing options, including:

 

  • Zero up-front cash investment
  • Immediate positive cash flow
  • Long-term financing (up to 20 years)
  • PACE assessment stays with the property upon sale
  • Ability to pass payments through to tenants
  • Low interest rates
  • Higher rents and greater long-term property value because of energy efficiency
  • Preservation of borrowing capacity through off-balance–sheet financing

 

PACE programs may also help advance energy efficiency improvements in the market because they provide validation of common technologies and improvement measures. In addition, PACE programs create a replicable transaction path that is accessible to a variety of commercial building owners.


Learn more about the PACE programs currently underway in the issue brief: Setting the PACE: Financing Commercial Retrofits

INSTITUTE FOR BUILDING EFFICIENCY

Read What's New for IBE:

Banner - Make Your Building Work Calculator

Our easy-to-use Energy Efficiency Calculator lets you estimate energy cost savings, improve productivity, and reduce carbon emissions through building improvements.  

Financing Commercial Retrofits
Suppliers Contact Site map Social Media Privacy Terms of use Feedback
© 2013 Johnson Controls. All rights reserved.