Stepping up the PACE

 by Rick Moore, Clean Energy & Efficiency Director

Imagine sitting down at your kitchen table with a contractor, and, within an hour, signing a contract that will add value to your home, reduce your energy bill, and help fight climate change—all with no out-of-pocket costs. While it may sound too good to be true, this scene has played out thousands of times in California and other states in the past few years thanks to a program known as PACE, an acronym that stands for Property Assessed Clean Energy.

PACE is an innovative financing program that provides opportunities for property owners to do clean energy and energy efficiency upgrades, as well as complete water conservation projects. So if you want to install solar panels, upgrade your heating and cooling systems, or get a more efficient water pump for your house, PACE can help you do it.

More than 30 states have passed legislation authorizing local governments to establish voluntary PACE programs, which pay for 100 percent of a project’s costs up front. Property owners who opt in then repay the cost of their project through an annual fee added to their property taxes over the next 20 years. 

Why is this such a big deal?

Energy efficiency projects can be expensive. PACE programs give home owners the flexibility to pay for a project across two decades, avoiding the hassles of getting home equity loans, passing  credit checks, or paying up front. Because the projects are paid for through an added fee (an assessment) on the property tax bill, interest rates are low. The long-term payback and low interest rates mean that PACE projects are typically cash-flow positive from the start (your utility bill drops more than the cost of paying for the upgrade). In fact, some states require them to generate a positive cash flow to qualify for the program.

Businesses can also take advantage of the opportunities provided by PACE, and in fact, many states have established PACE programs focused only on businesses. From a bistro in Minnesota that is saving $5,000 a month to a $6.8 million hotel project in California that will reduce electricity use by over 200,000 kWh a year and water consumption by an estimated 3.2 million gallons annually, PACE is making a difference. With virtually no upfront costs and no need to take out loans (and carry them as a liability), PACE can be particularly helpful to help revitalize blighted urban areas and low-income communities.

Arizona needs to step up the PACE

While more than 30 states have adopted the legislation necessary for creating PACE programs, Arizona is not among them. The Trust aims to change that. Who wouldn’t want to give voters the opportunity to sit down at the kitchen table with a contactor, lower their utility bills, save resources, and become more energy independent? We believe that when Arizona legislators understand how PACE can create local jobs, free up capital that Arizona businesses can use to grow, and save millions of dollars on energy and water bills, legislators will happily pass PACE legislation 

For more information visit the PACE website ›