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Property Assessed Clean Energy (PACE) Financing

Property Assessed Clean Energy (PACE) Financing. What is PACE. Energy Efficiency and Renewable Energy Financing Private sector buildings Put in place by localities- by ordinance Requires State enabling legislation PACE loan is treated like a tax assessment Started in 2009 in CA

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Property Assessed Clean Energy (PACE) Financing

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  1. Property Assessed Clean Energy (PACE) Financing

  2. What is PACE • Energy Efficiency and Renewable Energy Financing • Private sector buildings • Put in place by localities- by ordinance • Requires State enabling legislation • PACE loan is treated like a tax assessment • Started in 2009 in CA • PACE laws in 31 states and DC

  3. Why Use PACE • 100% funding – No upfront costs • Funding for up to 20 years • Immediate positive cashflow • No payoff on sale – PACE transfers to new owner • Possible off-balance-sheet treatment • Ability to pass payments through to tenants

  4. PACE in Virginia • Law enacted in 2009- but flawed • Lacks priority lien status • PACE Loan requires a lien status equal to tax lien- • Treated as voluntary special assessment • Virginia PACE Coalition to fix the law • Lien status issue • Lender consent

  5. Virginia PACE Coalition • Trane • Boland • Siemens • ABM • CREE • Hannon Armstrong • S&S Sales • HCYU • Alt-Energy • Urban Ingenuity • Renewable Funding • Abacus Property Solutions • Community Housing Partners • Local Energy Alliance Program • Virginia Energy Efficiency Council • Richmond Region Energy Alliance

  6. PACE Nationally- 2011

  7. PACE Nationally- 2014

  8. Growth of PACE Property Types

  9. Connecticut PACE Program • Commercial, industrial & multi-family • Requires the consent of the existing mortgage lender • Requires SIR>1 • Renewable and energy efficiency

  10. Connecticut PACE Program • 200+ contractors trained • 20 qualified capital providers • Closed $30 million in deals -average size $700K • Class B buildings • $70 million of projects in the pipeline • 17 mortgage lenders have provided consent

  11. PACE Deal SnapshotHilton Hotel Universal City, CA • Amount - $7million • Term – 20 years • Rate – 7% fixed • 50% reduction energy usage • Energy & water savings - $800,000/yr • ROI – 78% • Local incentives sweetened the deal

  12. PACE Deal SnapshotShopping Center, Norwalk, CT • Amount - $170,000 • Term – 13 years • Rate – 4.5% fixed • 35,000 SF building • Exterior LED Lighting • Energy savings - $17,000yr

  13. PACE Deal SnapshotOffice Building, Toledo, OH • Amount - $1.4 million • Term – 15 years • Rate – 4.32% fixed • 60,000 SF building • Cooling tower, lighting upgrade, hot water pump upgrade, building automation controls, new fan motors • Estimated energy savings- 48%

  14. Questions

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