What is a PACE Bond? PACE = Property Assessed Clean Energy and a PACE bond is issued by municipalities or private finance companies. Proceeds are lent to commercial and residential property owners of both existing properties and new construction to finance their energy-efficient retrofit products. They are given a 20-year period to repay this loan. Essentially, this is a measure to provide property owners lower energy bills and improved return on their investment with reduced upfront costs. The burden on the property owner is substantially lessened.
The idea of our nation financing energyÊretrofits with PACE bonds first came about in 2008 when enabling legislation was passed in California. Many states have followed suit during 2009, including Maryland and Virginia. In a nutshell, this means that theseÊstates may create PACE programs that ultimately expect to resolve many of the financial burdens that homeowners face in installing solar systems and other energy-efficient upgraded products.
The greatest benefits to the homeowners are that there are no initial costs, the property owners may pay for their upgrades over an extended 20 years while enjoying the benefits of the energy savings, that the property tax transfers to the new owner when the property is sold and that the overall energy savings will serve to reduce utility bills. The debt is secured by a lien on the property and as such, the homeowner feels little financial impact. This measure is in fact, an innovative way to expedite energy retrofits in commercial and residential settings.
To ensure the success of any PACE program, “Best Practices” and “Quality Assurance ” programs must be developed in tandem with municipalities, and as such, all stakeholders will reap the benefits. As more information becomes available, we will keep you informed. Call Reg or Tom for more information at 703-916-8372.