Property Assessed Clean Energy (PACE) financing is a mechanism that allows energy efficiency and renewable energy projects to be financed at reasonable rates. PACE works by attaching a special assessment to the property, not a liability to the owner. The funding is then repaid over the life of the installed equipment, anywhere from 5 – 20 years. Using a property tax assessment has many benefits:
- The senior position allows lenders to offer low interest rates because the property is collateral, not the installed equipment.
- Energy efficiency upgrades and renewable energy installations have been hindered by high up-front costs. PACE financing spreads the cost over the useful life of the equipment, which provides savings that exceed cost on an annual basis.
- The obligation is attached to the property, not the owner, making it easy to invest in energy projects even if the owner plans on selling the property.
PACE is clearly a practical example of a “regenerative community solution”: it creates jobs, energy efficiency, and sustainable improvements to property, especially the enormous amount of commercial and industrial property now vacant or underutilized in New Jersey. We’ve chosen to focus our efforts on C&I properties, but we anticipate that residential PACE will be reinstated federally as well. (For an explanation of the issues with Residential PACE, see “National groups submit more than 38000 comments on residential-pace,” at our NJ PACE web site, www.NJPACE.net.)
CRCS has devised and developed the NJ PACE program as a statewide public-private-nonprofit initiative. The program requires municipal approval, along with the participation of private lenders, energy contractors, and property owners. The Center views it as an integral part of its mission to educate, advocate, and implement this kind of program, which once launched will be managed by a separate company, NJ PACE, LLC (with 20% of profits returned to the nonprofit entity).
New Jersey is the 29th state to introduce PACE as a local option. Municipalities may adopt by ordinance provisions creating a “clean energy special assessment” to be imposed on properties that elect to participate in the program and collected on a quarterly basis. The municipality may also issue bonds to fund the program, or apply to a county improvement authority that issues bonds to do so. The proceeds from the special assessment must be used to repay the bond obligations. Alternatively, the municipality may work with private partners to utilize reserves or private financing.
As a NJ-based nonprofit, we can assist municipalities to implement effective PACE programs with no upfront costs required. Our role is to educate and advocate for a variety of regenerative community solutions.
We have created NJ PACE, LLC to administer the statewide program.
We work with a range of public, private, and nonprofit partners to make PACE programs possible:
- Commercial Property Owners
- Energy Auditors
- Energy Conservation Contractors
- Engineering Firms
- Major Financial Institutions
- Municipal Governments
- County Improvement Authorities
- State Agencies
- Credit Unions
- Community Banks
We provide the organizational framework to make PACE transactions work. If you are a commercial property owner, or a prospective partner organization, visit our NJPACE.net web site to learn how you can benefit from this program.
Implementing Municipal PACE Programs
New Jersey PACE, a state-wide open-market program offered by the Center for Regenerative Community Solutions, is designed to provide customized services to assist municipalities, contractors, and financing institutions to facilitate funding transactions commensurate with the needs and opportunities of each community.
We act as administrators for municipal PACE programs at no cost to the taxpayer. By providing standardized forms and procedures, and implementing best practices from other state programs, we keep all costs to a minimum, and cover these costs through the project financing.
Visit www.NJPACE.net for more information.