Property Assessed Clean Energy (PACE)

What is PACE?

Property Assessed Clean Energy (PACE), sometimes called Municipal Energy Financing, Clean Energy Assessment Districts, Voluntary Environmental Improvement Bonds, or Property Tax Based Financing, is a mechanism that allows property owners seeking to make major energy efficiency investments to opt-in to a special tax or assessment district (or local improvement district).

Property owners borrow money to finance energy efficiency improvements and/or renewable energy equipment, and repay overtime through a line item on their property tax bill. The repayment obligation is attached to the property, not the individual, and if the property is sold before the end of the repayment period, the remaining obligation transfers to the new owner.

PACE holds great promise as a means to overcome two of the main barriers to customer participation in energy efficiency programs: 1) the inability to afford the up-front costs and 2) consumer confidence in the performance and associated benefits of the improvements, however experience with this mechanism to date is limited. Several overviews are included here, as well as case studies and lessons learned by pioneering cities and counties. CEEP will continue to add information as it becomes available, particularly as opportunities for utility involvement are field-tested. If your utility is exploring this mechanism or participating in a pilot program, please join the discussion!