March 18th, 2019
Picking Up the PACE
The last time I wrote about the Property Assessed Clean Energy (PACE) program, I was happy to report that the program continued to see significant growth over the past five years. If you’ve followed this blog, then you know that I’m a supporter of this important and often overlooked program.
As a refresher, PACE funding can pay for numerous energy-efficient upgrades, including windows, HVAC systems, solar panels and more. In states where the program is in place, PACE pays for 100 percent of project costs, repaid through an assessment that’s added to the property’s tax bill over a 20-year period and transferrable upon sale.
So, with the 2019 PACE Nation Summit happening in early April, I thought it was a good time to check back in on the program.
The big news? C-PACE—the program’s arm for commercial buildings—continues to accelerate, with $893 million and more than 1,800 projects to date (compared to $728 million and 1,700 projects last time I checked in a few months ago).
I find this is interesting, because there’s been significantly more investment made in R-PACE for residential structures than there has been for C-PACE. And while R-PACE continues at a steady clip, it hasn’t seen growth to the extent of its commercial counterpart.
I see one potential explanation for the disparity: PACE’s alternative financing for commercial renovation is a very attractive option for building owners who want the flexibility to sell their properties, since the PACE tax assessment transfers to the new owner and does not have to be paid off at the time of sale.
The same is true for R-PACE, of course. Consumers that might not be able to afford a conventional property improvement loan can afford PACE because of the longer amortization period, of up to 20 years for payback; just like C-PACE, if they sell their home, the tax assessment transfers, so they keep the principal without paying off a large loan. But residential homeowners are less likely to see their homes as a business investment, which could account for why commercial property owners are pursuing the benefits more aggressively.
At any rate, there’s still plenty of opportunity with PACE in both spaces. The View from Here is that makers of energy-efficient doors and windows stand to benefit by continuing to advocate for the program.
You can learn more about the program at PACENation.us. I’m eager to see what comes out of this year’s Summit.
What’s your view? Email me directly at email@example.com.