Property Assessed Clean Energy (PACE)

energyaudit

PACE is a funding mechanism for financing energy efficiency and renewable energy projects for buildings which uses the energy savings to fund the project. It requires; 1) a building owner interested in making energy improvements; 2) the regional Port Authority that has a bond fund, and 3) an energy services company that can audit the energy opportunities of the building and reliably identify the energy savings potential.

Energy Optimizers, USA, in Tipp City, OH, is currently working with the Dayton-Montgomery County Port Authority to initiate PACE projects in the mid-Ohio region.

The benefits to a building owner of financing with PACE are: 1) the project is externally funded by the Port Authority requiring no capital investment from the owner; 2) the funding is not a conventional loan, but a voluntary assessment, so the process is off-books financing and does not impact other loan-to-value ratios; 3) the assessment is tied to the building, so passes to the new owner in a sale; 4) the entire funding value, both principal and interest, is tax deductible; 5) in triple net leases, both the cost of the assessment and the utility savings will be shared by the tenants; and 6) the identified energy and maintenance savings will be used by the owner to pay for the assessment over an extended period (likely 15 years). In some cases the owner actually realizes a positive cash flow from the savings.

PACE is used with major energy projects involving at least $100,000 in costs, with no maximum. It requires an escrowed reserve of approximately 10%. Current (June, 2015) interest rates are approximately 5.5% over a 15 year period. Payments are collected with real estate taxes twice a year by the regional collecting authority.

When initiating a PACE project with a customer, Energy Optimizers, USA (EOU) will provide a detailed energy audit of the facility which will meet all the Port Authority requirements. EOU then designs and manages the retrofit or new energy project, ensuring all rebates and incentives are achieved, and commissions the completed project, with follow-up measurement and verification. EOU will then guarantee that all identified energy savings are achieved and work with the Port Authority to assist the owner in completing all requirements of the project. Upon completion EOU will provide news contacts and news releases so that the owner can take public advantage of his/her energy saving achievements.