How PACE Goes to Work for Capital Providers

If you’ve never heard of PACE before, don’t worry! You’re not the only one. PACE stands for Property Assessed Clean Energy. It’s a state-administered program aimed to help commercial, industrial, multifamily, and non-profit property owners get affordable, long-term financing for green energy upgrades to their buildings. Because the PACE program is administered by the individual states (NY, CT, NJ), capital providers know they are working with an established, state-sponsored financial institution with a solid track record of continually opening the green energy market.

Now, with demand for clean energy and energy efficiency expanding, states have established Green Banks, financial institutions dedicated to increasing and accelerating the flow of private capital into markets that energize the green economy. The Green Bank continues to grow the market by building confidence in PACE and its ability to capitalize on the power of energy improvements.

Capital providers involved in PACE play a central role in building stronger businesses and stronger communities, and when they realize new investment opportunities through PACE, they enjoy many benefits of their own. Here are just a few.

Reduced Risk
One of the most valuable aspects of PACE financing is its repayment through participating municipalities’ property tax collection systems. This automates repayment and reduces risk. Furthermore, PACE is a priority lien, so it is collected in the same manner as, and subject to the same penalties and remedies as, real property taxes. By statute, PACE Benefit Assessments are senior liens, subordinate only to real property tax liens. This means that capital providers are paid back quickly and securely with a solid return on investment.

The Power of 100% Financing
The simple fact is that many commercial building owners want to reduce their energy usage while getting their energy from cleaner, more reliable sources. But they often lack the funds to undertake large-scale projects involving solar, heating and cooling technologies, and other energy efficiency measures that reduce costs.

With 100% financing, PACE enables building owners to tackle large projects that can produce immediate savings and preserve cash flow. This creates an opportunity for capital providers to bring their lending power to a sector of the market that is purpose-built by the state to create stable and reliable projects.

Immediate ROI for the Property Owner
Property owners who use PACE experience its impact right away through monthly savings in energy expenses. State statutes require PACE projects to have a Savings to Investment Ratio (SIR) greater than 1. This means that the projected lifetime savings from the improvements must exceed the total investment (including financing costs) over the lifetime of the measures. This helps to ensure building owners can meet their financial obligations (including those to the capital provider), while remaining competitive.

The Socially-Responsible Investment
As part of a portfolio of investments, PACE projects represent innovation, social responsibility, and a commitment to the future. Bottom line, you can feel good about how this money is spent because the whole point of PACE is to create healthier businesses and healthier communities.

Right now is an amazing time to leverage the solid investment strategies available through PACE. Let our team here at 64Solar show you how. We have a proven track record of facilitating successful, award-winning projects for both property owners and capital providers. In fact, we’ve been named as PACEsetters multiple times. The PACEsetter Awards acknowledge contractors who are advancing the green energy movement through PACE, and whose leadership establishes a ‘pace’ for others to follow. We can light the way for you too.

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