How does PACE work?
Cities set up special clean energy finance districts capable of issuing low-interest bonds. Participating homeowners can opt to use the bond money to pay for renewable energy and energy efficiency improvements, and then pay the lien back through a long-term assessment on their property taxes. This arrangement spreads the cost of a new solar energy system out across a 20-year payment plan that is easily transferable to the next property owner – a particular benefit to solar which can have longer payback periods. The cost of that assessment is typically less than the power bill savings generated by the improvements. It’s a budget-friendly way that cities can empower property-owners to invest in a local clean energy future.
Note this finance model can- and we believe should- be used to finance a host of technologies: solar PV systems, solar hot water systems, energy efficiency installations, and even water conservation upgrades.
PACE Reference Materials (PDFs)
- Keeping PACE: An article explaining the national response to lender concerns about PACE.
- Constitutionality of PACE Under Federal & California Law White Paper A legal assessment of local governments’ PACE authority by Paul, Hastings, Janofsky & Walker LLP.
- PACE Programs: Considerations for the Financial Community White Paper: A deeper dive into opportunities, benefits and strategies for success including considerations for the financial community by Vote Solar, NRDC, PACENow.org and Renewable Funding LLC.
- PACE FAQ: A general fact sheet exploring common questions about PACE.
- Bonding and tax specific FAQs: A fact sheet addressing PACE’s financial mechanics.
- PACE enabling legislation fact sheet: The ten key components of enabling PACE through state law.
- Municipal Property Tax Assessment Financing: A 2008 white paper from Vote Solar outlining the Berkeley PACE program and providing a policy primer on how to replicate the model in cities and towns across America.
PACE Action Center
Can’t get enough? Check out the vast resources available at PACENOW.org