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

• PACE laws in 31 states and DC

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

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

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

PACE Nationally- 2011

PACE Nationally- 2014

Growth of PACE Property Types

Connecticut PACE Program

• Commercial, industrial & multi-family

• Requires the consent of the existing mortgage lender

• Requires SIR>1

• Renewable and energy efficiency

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

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

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

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%

Questions