The Property Assessed Clean Energy program (PACE), which allows loans to be transferred on a property to the next owner, started with just two California cities. It remained a pretty low-profile program in most parts – or at least I thought until I attended a PACE forum at the Better Buildings Summit this past May.

I was shocked to learn that 97,000 PACE-funded residential projects have taken place at a value of over $2 billion and that 31 states have active PACE programs. Then I started digging. According to the Department of Energy (DOE) website, PACE has many attributes:

• Allows for secure financing of comprehensive projects over a longer term, making more projects cash-flow positive;
• Spreads repayment over many years and removes the requirement that the debt be paid at sale or refinance;
• Can lead to low interest rates because of the high security of loan repayments attached to the property tax bill;
• Helps some property owners deduct payments from their income tax liability;
• Allows municipalities to encourage energy efficiency and renewable energy without putting general funds at risk, and;
• Taps into large sources of private capital, such as the municipal bond markets.

PACE is another example of increasing the value of energy-efficient upgrades and reflecting them in the value of the home. One speaker on the panel cited a study from 2015 where 300 PACE-certified home upgrades were appraised at a premium greater than the cost of the projects. Projects can be paid back over a much longer term (up to 20 years) and for up to 15 percent of the home’s value.

What’s the opportunity for fenestration professionals?

As I dug into the program further, I noticed a big gap in participation from our industry. When you look for PACE-certified contractors for windows, almost none are window contractors – but rather HVAC contractors.

The View from Here is that there is a big chance for us to learn more and become involved. It’s clear that PACE is gaining momentum across the country. See who is PACE-certified in your area.

What’s your View? Email me directly at eric.jackson@quanex.com.

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