About PACE

What is PACE?

Property-assessed clean energy (PACE) programs enable local governments to finance renewable energy and energy efficiency projects on private property, including residential, commercial and industrial properties. The programs eliminate the chief barrier to clean energy installations: the large upfront cost.

Generally, PACE is rooted in traditional land-secured municipal finance. A local government creates an improvement district; a bond, secured by real property within the district, is issued; and the bond proceeds are used to fund projects. Property owners then repay the debt service on the bond in fixed payments as part of their property tax bill.

There are two major characteristics, however, that make PACE unique. First, property owner participation is 100% voluntary. For example, the PACE district may mirror municipal boundaries, but only those property owners who opt-in are subject to the financing. Second, the bond proceeds are used to pay for prequalified clean energy improvements on participating properties. Improvements that a property owner may often choose from include renewable energy technology like solar panels, energy efficiency, and in some states water conservation measures.

PACE is a powerful tool for municipal governments to stimulate the local green economy while providing a competitive financing program for residents.

History of PACE

As the Chief of Staff to Berkeley Mayor Tom Bates, Cisco Devries was tasked with developing a plan to meet the city’s ambitious climate goals. He was aware these goals would be impossible to meet without dramatically reducing the energy use of Berkeley’s residences and businesses, but the policy tools at his disposal were inadequate to overcome the barrier of the high upfront cost of solar and energy efficiency projects.

While working with a neighborhood that was using a special tax district to finance underground utility lines, Cisco realized that by using land secured finance districts, a well-established tool of municipal finance, the city could provide low interest, long term loans for energy saving measures. This would allow property owners to payback the cost of the system over a 20 year period, while they simultaneously saved on their energy bills. Additionally, the debt would transfer to the new owner upon sale of the property.

A couple of years later, Berkeley homeowners are now enjoying solar pv arrays financed by BerkeleyFIRST, and Cisco is the President of Renewable Funding, which administers the BerkeleyFIRST Program among others, and is actively engaged in promoting this revolutionary financing mechanism.

To read more about Cisco and his work developing PACE, check out the following article published by Miller-McCune in June of 2009.

Francisco Devries invents a financing mechanism that makes rooftop solar affordable in Berkeley and other cities