Commercial Solar Applications have special financing options not available to other markets
PACE
The property-assessed clean energy (PACE) model is an innovative mechanism for financing energy efficiency and renewable energy improvements on private property. PACE programs allow local governments, state governments, or other inter-jurisdictional authorities, when authorized by state law, to fund the up-front cost of energy improvements.
PACE financing for clean energy projects is generally based on an existing structure known as a “land- secured financing district,” often referred to as an assessment district, a local improvement district, or other similar phrase. In a typical assessment district, the local government issues bonds to fund projects with a public purpose such as streetlights, sewer systems, or underground utility lines.
The recent extension of this financing model to energy efficiency (EE) and renewable energy (RE) allows a property owner to implement improvements without a large up-front cash payment. Property owners voluntarily choose to participate in a PACE program repay their improvement costs over a set time period—typically 10 to 20 years—through property assessments, which are secured by the property itself and paid as an addition to the owners’ property tax bills. Nonpayment generally results in the same set of repercussions as the failure to pay any other portion of a property tax bill.
A PACE assessment is a debt of property, meaning the debt is tied is tied to the property as opposed to the property owner(s), so the repayment obligation may transfers with property ownership depending upon state legislation. This eliminates a key disincentive to investing in energy improvements, since many property owners are hesitant to make property improvements if they think they may not stay in the property long enough for the resulting savings to cover the upfront costs.