PACE (Property Assessed Clean Energy) financing is a mechanism that allows property owners to finance energy efficiency, renewable energy, and water conservation upgrades through a special assessment on their property tax bill. Here are some key points about what PACE financing covers and the typical financing limits:

What PACE Financing Covers:

  1. Energy Efficiency Improvements:
    • HVAC systems
    • Lighting upgrades
    • Insulation
    • Windows and doors
    • Building envelope improvements
  2. Renewable Energy Installations:
    • Solar panels
    • Wind turbines
    • Geothermal systems
  3. Water Conservation Measures:
    • Low-flow fixtures
    • Irrigation systems
    • Water recycling systems
  4. Resiliency and Safety Upgrades:
    • Seismic retrofitting
    • Hurricane-resistant improvements
    • Flood mitigation
  5. Other Eligible Improvements:
    • Energy storage systems
    • Microgrid installation
    • Electric vehicle charging stations

Financing Limits:

  • Up to 100% Financing: PACE financing typically covers 100% of the project cost, including equipment, installation, and soft costs such as permits and engineering.
  • Repayment Periods: The repayment period can extend up to 20-30 years, depending on the jurisdiction and the expected life of the improvements.
  • Financing Amounts: The total amount that can be financed is often based on a percentage of the property’s assessed value, which can range from 10% to 20% or more, subject to local regulations.
  • No Upfront Costs: Property owners can undertake significant upgrades without any upfront costs, with repayments made through property tax assessments.

Benefits:

  • No Out-of-Pocket Expenses: Projects are financed upfront, and payments are made through property taxes.
  • Long Repayment Terms: Long repayment periods align with the useful life of the improvements, making payments manageable.
  • Transferable Obligations: The PACE assessment is tied to the property, not the owner, and can be transferred to the new owner if the property is sold.
  • Improved Property Value: Upgrades can increase property value and reduce operating costs through improved efficiency.

Examples of Projects:

  • Commercial buildings upgrading to energy-efficient HVAC systems.
  • Residential homes installing solar panels.
  • Industrial facilities implementing water recycling systems.

PACE financing offers a practical and accessible way for property owners to make significant energy, water, and resiliency improvements while spreading the cost over time through their property tax bill.

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