What is PACE?
Property Assessed Clean Energy or “ PACE” programs, also commonly referred to as AB 811 - style programs, allow local government entities to offer sustainable energy project loans to eligible property owners. Through the creation of financing districts, property owners can finance renewable onsite generation installations and energy efficiency improvements through a voluntary assessment on their property tax bills. The assessment district approach adds a powerful new option to the clean energy finance landscape.
Property owners benefit by avoiding the upfront installation cost of renewable onsite generation systems and energy efficiency measures and eliminating concerns that they will sell the property before recovering the system investment from utility bill savings. The result is that property owners in participating jurisdictions can finance their greening efforts with a minimal level of financial risk.
Cities and counties benefit from forming clean energy assessment districts by providing options to its constituents to install clean energy technologies. Clean energy investments funded through these programs will assist local governments in reaching the goals of Assembly Bill 32, the California Global Warming Solutions Act of 2006. The PACE mechanism requires little or no investment of general funds and presents very low risk given that the loan repayment is a senior lien on the property, ahead of the mortgage itself.