08/09/2013

Why You Need to Know About PACE

Learn how large projects with long paybacks can be made more feasible

By Eric Woodroof, Ph.D., CEM, CRM

 

Is PACE available in your state?
Visit PaceNow.org to find out.
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If you haven’t heard about Property Assessed Clean Energy (PACE) financing, it’s a valuable resource you may be overlooking. Over the past few years, this new energy efficiency financing mechanism has swept across the U.S., with already more than half of the states approving legislation to enable it locally.

The PACE concept essentially involves financing energy efficiency projects via property tax assessments, which are repaid over longer periods than traditional credit-based loans. In simple terms, a project can be completely financed such that there is no initial capital expenditure. The loan is secured with a slight increase to the property tax payments.

Similar to performance contracting financing, the annual savings of the energy project are greater than the finance payments, so PACE is a cash flow neutral option for commercial properties. An exciting benefit of PACE is that it allows owners to take advantage of more capital-intensive projects with longer paybacks and greater overall savings. Because the repayment is tied to the property (and not the owner), PACE financing effectively reduces the vulnerability of traditional financing, which is primary influenced by the credit rating of the facility owner.

If the owner sells the property, the additional property tax obligation transfers with the property, but so do the energy savings (which are greater than the additional property taxes). Thus, after the retrofits, the improved property has a greater value.

Where is PACE Available?          

Because state and local entities are involved, legislation to enable PACE financing has to be approved on a state basis. To see if PACE has been enabled in your map, see the map. The good news is that most states have already recognized the value in PACE and approved it. PACE represents a competitive advantage to the states that have enabled it, because businesses within those states have more ability to become cost-competitive via the positive cash flow from the energy efficiency projects.


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Visit our website today to learn about the design flexibility of a Morton building and the endless possibilities of partnering with our designBUILD team.


Wood construction is both cost and energy efficient. Check out Morton Buildings and our designBUILD team online today to discover all the benefits of post-frame construction.


When choosing a metal-clad building for your next construction project, consider Morton Buildings, Inc., and their designBUILD team, we’ll make your dream a reality.

Yaskawa drives offer quality performance for air handlers and cooling towers on the roof to secondary chilled water pumps in the basement

Bluebeam® Revu® simplifies digital facilities document management from design review to leveraging as-builts, maintenance manuals and O&Ms submittals.

We Can Help You Reduce Energy by 30%

Our mission is to help our customers manage their buildings' energy costs, improve reliability, and enhance performance while having a positive impact on the environment.
CLICK HERE to find out how.


 
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