What is PACE Financing?

(Property Assessed Clean Energy)

Simple idea

PACE (Property Assessed Clean Energy) is a simple and effective way to finance energy efficiency, renewable energy, and water conservation upgrades to buildings. PACE can pay for new heating and cooling systems, lighting improvements, solar panels, water pumps, insulation, and more for almost any property – homes, commercial, industrial, non-profit, and agricultural.

Adds value

Property owners across the US are using PACE financing because it lowers utility bills and may make their buildings more valuable. PACE pays for 100% of a project’s costs and is repaid  for up to 20 years with an assessment added to the property’s tax bill. PACE financing may stay with the building upon sale and is easy to share with tenants. State and local governments sponsor PACE financing to create jobs, promote economic development, and protect the environment.

PACE in 90 Seconds

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PACE Basics One-pager

Download the one-pager to learn more about PACE 101, and print and distribute to anyone looking to learn more about PACE.

PACE was named one of the top 20 “world-changing” ideas by Scientific American magazine 

The challenge

Nearly half the energy we consume, and three quarters of the electricity we generate in the United States is used to heat, cool, light, and otherwise operate our buildings. Most of this energy is created by burning fossil fuel, so reducing its consumption in a meaningful way will depend on reducing energy use in buildings. A number of barriers have thus far limited wide-scale adoption of energy efficiency and renewable energy measures.

PACE is the solution

PACE overcomes challenges that have hindered adoption of energy efficiency and related projects in our nation’s buildings. PACE financing solves the upfront cost barrier by providing 100% financing for project costs. Long-term repayment of up to 20 years makes longer payback projects immediately cash flow positive and buildings more valuable. For contractors, PACE makes it easier to close a larger sale.

Benefits of PACE

PACE saves money

Saves money

Property owners are more focused today than ever before on energy and water conservation. PACE helps reduce utility bills by lowering energy costs.  Long term pay back can make PACE-funded projects immediately cash flow positive.

PACE saves money

Creates jobs

PACE funded projects create more jobs and economic activity. According to the 2011 study by ECONorthwest, every $1 million in project spending results in 15 new jobs and $2.5M in economic output.

PACE helps the environment

Helps the environment

PACE helps communities achieve important energy and water conservation goals. Efficiency projects upgrade old equipment which reduces energy use, while renewables replace fossil fuels and reduce greenhouse gas emissions.

How PACE works


Step 1: Framework

States pass enabling laws that allow local governments to offer PACE financing to building owners. PACE is completely voluntary.

PACE saves money

Step 2: Project

Qualified PACE service providers help building owners select cost-effective projects that make good business sense.

PACE helps the environment

Step 3: Financing

PACE programs process applications, qualify projects and provide or arrange financing. An assessment or charge is added to the property’s tax roll once the funds are disbursed.


PACE buildings eligible

Eligible properties

Almost any building is eligible for PACE financing, including homes, offices, hotels, restaurants, shopping centers and other retail properties, non-profits, warehouses, garages, etc.

PACE improvements eligible

Eligible improvements

Energy efficiency and energy generation improvements and, in some states, water conservation and hurricane and earthquake resistance, all qualify for PACE financing.

Eligibility may vary by state and municipality, so we recommend that you contact your local PACE program for a list of eligible properties and improvements.

Residential PACE

PACE for Homes

Energy efficiency is the least expensive energy we can buy. Homeowners are using PACE to upgrade heating and air conditioning systems, and improve insulation and weather sealing. PACE in an effective financing tool because it:

  • Covers 100% of a home upgrade project
  • May result in savings from day one
  • May stay with the property upon sale
  • Helps lower electric, gas and water utility bills
  • Results in more comfortable buildings and improved indoor air quality
  • Lowers carbon footprint and improves the environment
Residential PACE

PACE for Commercial Buildings

Momentum is building across the U.S. for commercial PACE programs that drive energy efficiency, renewable energy, and in some places, water conservation measures. Real estate owners choose PACE financing because it:

  • Covers 100% up front financing, including project development costs
  • Provides long-term funding and results in immediate benefit to cash flow
  • Stays with the building upon sale
  • Solves split incentives by passing payments to tenants
  • Increases building value and marketability
  • Offers a range of accounting treatments.
MikeWhat is PACE Financing?