Benefits of PACE
Property owners utilize PACE financing because it saves them money and makes their buildings more valuable. Filed as a lien on the property and repaid annually through an assessment on the property's tax bill, PACE financing spreads the cost of energy improvements over the lifetime of the project. Benefits of PACE include:
- PACE helps building owners finance energy projects that they want and need.
- PACE covers 100% of a project's hard and soft costs which means no out-of-pocket costs to the building owner.
- Relative to other sources of debt and equity, PACE provides low-cost, low-interest financing for terms up to 20 years.
- PACE assessment stays with the property and automatically transfers to a new owner.
- Because annual energy savings are larger than the annual repayment, the 20-year amortization of PACE financing creates positive cash flow. As a result, the improved debt service coverage ratio (NOI/Debt Service) provides enhanced ability to pay existing debt.
- PACE loans do not accelerate upon default. So, similar to property taxes, only payments in arrears are senior to the existing mortgage.