What is PACE?
- Property Assessed Clean Energy
- PACE allows commercial property owners to finance energy improvements via special betterment assessments on their property tax bills
- Eligible projects must be approved by the Department of Energy Resources (DOER)
- Municipal opt-in (one time) required
- Maximum financing term allowed is 20 years (dependent on useful life of project measures)
- Energy cost savings must exceed cost of improvements (including any financing costs and associated fees)
- no limit or maximum financing cost
- If property is sold, the remaining PACE assessment and PACE lien stays with the property and transfers to new owner
- Retroactive consideration for installed improvements
- Third party direct private financing (no public funds used)
Who benefits from PACE?
- Job creation, attract new and retain existing business, and environmental benefits associated with reducing energy consumption
- Property owners
- No new debt on balance sheet, no pay-off upon sale of property (assessments run to new owner), long-term financing (20 year max), no new mortgage lien
- Lenders/Mortgage holders
- Improved cash flow and reduced credit risk from lower operating costs via financing that cannot be accelerated. Capital improvements could also increase collateral property value
What types of properties are eligible for PACE?
- Office buildings, Malls, Hotels, Restaurants, Manufacturers, etc.
- Not for profit
- YMCAs, Schools, Health Care etc.
- Multifamily Housing
- Apartment complexes (5 units or more)
What types of projects are eligible for PACE Financing?
- Energy Efficiency
- Energy management systems
- Insulation and air sealing
- HVAC systems
- Boilers and furnaces
- Energy recovery and redistribution systems
- Renewable Energy
- Solar panels
- Solar hot water
What is the obligation for the Municipality?
- Betterment assessment and PACE lien placed at closing
- Municipality includes the betterment assessment on the property tax bill and collects payment
- Municipality sends payment for Betterment Assessment to Mass Development who then sends payment to Capital Provider
- The City determines the cycle on which the betterment assessment will be billed
- Lien assigned to City, then assigned to MassDevelopment, then to Capital Provider