PACE

PACEI’ve just begun exploring a financing tool called Property-Assessed Clean Energy (or PACE), which can fund both commercial and residential conservation and renewable energy upgrades. PACE not only makes it possible for people to do things like change their wasteful old infrastructure or add rooftop solar, but more important, makes them immediately cash-positive. This is great news for folks who may have been interested in making changes they knew would pay for themselves in time, but hesitated when they thought about shelling out cash today and then waiting 5 or 6 years for that benefit. With a well-designed project, they can save more than they spend in year one!

PACE allows businesses to do efficiency upgrades there may not have been funds for in expense or capital accounts. Many companies (and even more non-profits) have been deferring maintenance for years due to budget reasons; leaving them stuck with old, inefficient lighting, insulation, or HVAC systems. PACE can allow them to make overdue upgrades, unlocking HUGE savings that will continue even after those savings have finished paying for the improvements. And PACE projects are typically designed to begin making positive contributions to cash flow immediately.

PACE also eliminates sticker-shock for homeowners who’ve dreamed of reducing their dependence on the power grid by putting solar panels on the roof or a windmill in the pasture. Projects can be done with no money down and designed so the annual cost of the system is less than the money they save on their utility bill. And if they move, the PACE deal stays with the house, just like the solar panels. A study done last year showed that PACE houses increased in value faster than comparable homes and sold for higher prices than comps in their real estate markets.

Over the next week or so, I’m going to sit down with some PACE experts as well as a local company that just completed a PACE project last fall. I’ll report on what I learn, so stay tuned.