Buildings account for approximately 70% of electricity use and 40% of greenhouse gas emissions in the United States, and offer significant opportunities for energy savings and GHG emissions reductions through the installation of energy efficiency retrofits and small renewable energy systems.
Property Assessed Clean Energy (PACE) legislation — first introduced in Berkeley, CA in 2008 and since adopted by 21 states — addresses these opportunities while overcoming several recognized barriers to their implementation: high first costs, high transaction costs involved in deciding on and financing projects, and payback times that often exceed expected occupancy.
Based on the concept of special municipal tax districts, PACE districts are established by local governments to issue loans to residential and commercial property owners who want to make voluntary energy efficiency retrofits or install small renewable energy systems. The loans generally originate from municipal bonds or other similar municipal capital sources. Loan payments take the form of an assessment added to the property tax on the building, typically with a 20-year payoff period.