Property Assessed Clean Energy (PACE) Financing

Property Assessed Clean Energy (PACE) is a type of financing used to fund property improvements associated with energy and water conservation in homes and businesses. Typical improvements financed through PACE include installation of energy efficient appliances and lighting, renewable energy systems, insulation, and water efficient plumbing fixtures. PACE differs from traditional lending by basing loan criteria on the equity in the building rather than the credit-worthiness of the building owner. Loans are repaid via an annual assessment on the owner’s property tax bill.

Residential Programs

  • CaliforniaFIRST: Administered by Renew Financial and sponsored by the California Statewide Communities Development Authority (CSCDA). 
  • CaliforniaHERO: Administered by Renovate America and sponsored by the Western Regional Council of Governments (WRCOG).
  • YgreneWorks: Administered by Ygrene Energy Fund and sponsored by the California Home Finance Authority (CHF).
  • AllianceNRG: Administered by Leidos Engineering and CounterPointe Energy Solutions and sponsored by the California Statewide Communities Development Authority (CSCDA).
  • PACEfunding: Administered by PACE Funding Group and sponsored by the California Statewide Communities Development Authority (CSCDA).
  • Energy Efficient Equity (E3): Administered by Energy Efficient Equity and sponsored by the California Municipal Finance Authority (CMFA).
  • Spruce Finance: Administered by Spruce Finance, Inc. and sponsored by the California Statewide Communities Development Authority (CSCDA).

Commercial Programs

  • CaliforniaFIRST: Administered by Renew Financial and sponsored by the California Statewide Communities Development Authority (CSCDA).
  • YgreneWorks: Administered by Ygrene Energy Fund and sponsored by the California Home Finance Authority (CHF).
  • AllianceNRG: Administered by Leidos Engineering and CounterPointe Energy Solutions and sponsored by the California Statewide Communities Development Authority (CSCDA).
  • Figtree OnDemandPACE: Administered by Figtree Energy Financing and sponsored by the Pacific Housing & Finance Agency (PHFA) and the California Enterprise Development Authority (CEDA).
  • PACEDirect & SolarPACE (CleanFund): Administered by CleanFund and sponsored by the California Statewide Communities Development Authority (CSCDA).
  • Structured Finance: Administered by Structured Finance Associates and sponsored by the California Municipal Finance Authority (CMFA).

Benefits of PACE Financing

  • 100% upfront financing for qualified energy upgrades 
  • The repayment obligation for the PACE assessment stays with the property if it is sold 
  • Allows owner to finance improvements while incurring no additional debt on a property 
  • Allows projects to be cash flow positive from the outset because the financing offered is relatively low cost and payable over an extended period of time (up to 20 years); this means that the energy savings can more than offset the property tax increase 
  • Improved attractiveness of home or building, including better indoor air quality and comfort
Additionally, for Businesses
  • Security of the tax lien allows building owners, who often lack investment grade credit ratings, to access third party financing for energy upgrades 
  • Using property assessment preserves capital and credit line for core business investments
  • PACE assessments qualify as an operating expense under most triple-net lease agreements. This means payments (as well as the energy savings) can be passed along to tenants. 

Learn more about Bay Area PACE offerings from the Local Government PACE Portal, supported by the Association of Bay Area Governments.