PACE makes energy and water efficiency upgrades financially “doable” for owners of commercial, industrial, multi-family and non-profit buildings as well as agricultural operations.
Repaid with a special voluntary assessment added to the property taxes, key benefits include long terms – generally 20 years or longer – at fixed interest rates. In most cases the assessment is less than the resultant energy savings.
Other benefits of PACE financing versus traditional options include:
- Non-recourse. The property secures the loan, not the owner.
- “Runs with the land.” If the property is sold prior to the loan being fully repaid, the buyer assumes responsibility for the assessment.
- Can be considered “off-balance-sheet.”
In Michigan, projects costing $250,000 or more must be cash flow positive. That is, the resultant energy or water savings must be greater than the entire cost of the project. The PACE project developer guarantees these projects are cash flow positive.