PACE in Michigan


Michigan passed PACE-enabling legislation in 2010 and there are two active PACE programs.

Active PACE programs

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a2The City of Ann Arbor created an energy assessment district under Michigan PACE law (Act 270, 2010). Clean Energy Coalition (non-profit) along with the City staff is administering the program. The program has launched and applications from commercial property owners are being accepted. Minimum project size is $10,000, with a maximum being $350,000. Financing will be done through pooling the assessments and issuing a bond once the amount reaches $1 mill. The interest rate is expected to be less than 5%. The City is contemplating private placement or general bond market. Loan Loss Reserve fund was established as a buffer for missed payments; the fund contains $393,000 (approximately 10 to 1 ratio). Energy audit is required to participate in the program (ASHRAE Level II and III). There are 7 pre-qualified auditors. The energy consumption will be tracked by collecting energy bills. Ann Arbor’s PACE program instituted a pre-screening process that is meant to determine whether it makes sense for a certain property owner to apply for financing. During this process energy spending, loan –to-value ratio, and lender’s preliminal consent are determined. Such procedure came out of discussions with local and regional banks at the onset of the program. Program costs are as follows: $300 review & application, $230 title search, and $13 annual fee. The program has gotten a lot of attention in Ann Arbor partly due to McKinley Property Management’s involvement. McKinley’s owner is a PACE supporter and 5 McKinley’s properties applied for financing. Project Documents: PACE Brochure, PACE Application Packet, PACE Report.

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Lean & Green Michigan™ is a state-wide PACE program, structured to allow every jurisdiction to join after holding a public hearing and passing a resolution of intent and adoption. As of September 2018, Lean & Green Michigan covers 36 counties, cities and townships across the state.

Click here to see the list of participating counties and cities.

Lean & Green is actively talking to municipalities and building owners across Michigan. Lean & Green staff has held a number of meetings with government officials, lenders, building owners, and energy contractors.

Lean & Green Michigan™ allows municipalities to create a PACE district at no cost, with access to private capital — and to do all of this cooperatively with other counties, cities and townships, building the regional economy. To create a PACE district with Lean & Green Michigan, a municipality simply votes to join by passing a local ordinance. There’s no need to hire or train additional staff or go through lengthy RFP processes. What is more, Lean & Green Michigan can be tailored to incorporate the particular needs of each municipality.

Lean & Green is open to a wide range of property types, for example: very large manufacturing companies, industrial companies, smaller companies, apartment complexes, downtown businesses, office buildings, and data centers.

The Lean & Green financing model is open-market or owner-arranged, subject to an ASHRAE Level 2 Audit. Lean & Green is happy to help match property owners with financial institutions and contractors.  At present, the minimum size of a PACE project is around $100,000, but there is no maximum size of a PACE project.

Legal fees, along with the cost of running Lean & Green Michigan™, are incorporated into the financing of each PACE project.  By joining Lean & Green Michigan™, municipalities allow their constituent property owners to gain access to banks and other sources of private capital that are willing to provide PACE financing in Michigan. Lean & Green Michigan™ represents the best kind of “shared services.” Counties, cities and townships give up nothing, but by working together they create one statewide set of efficient and flexible PACE rules that really work for business, create the kind of common market that larger companies with multiple facilities need, save money, and avoid duplication and a blizzard of conflicting rules from place to place.

Click here to view eligible projects.

Contact Information: Bali Kumar, Levin Energy Partners [email protected]

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PACE Municipalities in Michigan

PACE Enabling Legislation in Michigan

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