WHAT IS PACE FINANCING?
PACE (Property Assessed Clean Energy) is a simple and effective way for building owners to finance energy-efficient solutions, including renewable energy systems and water conservation upgrades. PACE pays for new heating and cooling systems, lighting improvements, solar panels, water pumps, insulation, and more in qualifying commercial buildings.
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BENEFITS OF IMPLEMENTING AN ENERGY REDUCTION PLAN
- Efficient, Effective and Environmentally Responsible Building
- Reduced Energy and Water Bills
- Reduced Maintenance and Down-Time
- New Equipment and Controls
BENEFITS OF USING PACE TO FINANCE AN ENERGY REDUCTION PLAN
- 20 Year Amortization! PACE pay back of hard and soft costs is amortized over 20 Years; unlike your typical bank loan with pay back over 6-8 years
- No Credit Check Required! Bank loans normally require credit checks on the individual and/or the business requesting the loan. With PACE, a property owner pays back hard and soft costs of the project through a raise in property taxes.
- No Capital Down!
HOW TO UTILIZE PACE FINANCING
Step 1. Complete initial Energy Audit Assessment
Step 2. Create Energy Reduction Plan Proposal
Step 3. Create Renewables Proposal (if applicable)
Step 4. Calculate ERP Implementation: Expenses (New Equipment, Engineering Fees, Construction Costs) and Savings (Energy and Water)
- NOTE: PACE can potentially cover 100% of a projects hard and soft costs
Step 5. After calculating hard and soft costs of implementing ERP and energy savings (if needed), then calculate property tax pay back per year:
i. ERP Expenses = $30K a year raise in Property Taxes
ii. ERP Savings = $35K a year decrease in Energy Costs
iii. Results in $+5K in positive cash flow!
Step 6. Implement Energy Reduction Plan
Step 7. The government then collects property tax payments and pays the lender. The lender is no longer worried about credit or certainty of payments, because payments are backed by the government.
IMPORTANT NOTES & DETAILS:
- Can be combined with utility, local and federal incentive programs
- Energy Projects are permanently affixed to the property (Equipment & Property Taxes)
- Once project cost is paid off, property taxes go back down to the original levels
- The annual energy savings for a PACE project usually exceeds the annual assessment payment, so property owners are cash flow positive immediately. This results in increased dollars that can be spent on other capital projects, budgetary expenses, and/or business expansion.
- The PACE assessment is filed with the local municipality as a lien on the property.
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