1. PACE Financing Property Assessed Clean Energy

2. wind turbines and more…
What Is PACE?
PACE is an assessment based financing mechanism for clean energy projects.
Clean energy includes efficient heating and cooling systems, insulation, solar panels,
wind turbines and more…

3. Why PACE? Economic Development tool
Lowers cost of doing business in your community
Directly impacts bottom line of local enterprises
Workforce development impact on creating jobs
Old building stock is maintained and upgraded
Cleaner and healthier air quality in your community
Positive impact on environment
Presenter Tip: The purpose of this slide is to establish that PACE is an economic development program right out of the gate, rather than just an environmental initiative. Everyone can agree that lowering the cost of business and creating jobs is good. The environment has the potential to be a divisive issue. Talk about the environmental angle last, don’t lead with it.

4. Old Concept – New Application
PACE is a public benefit the local government facilitates through a tax assessment. It works the same way as other financed public benefits.
Water & Sewer Service
Parks
Sidewalks
Lighting
Downtown renewal
And now, PACE
Presenter Tip: This slide can ease trepidation that PACE is a brand new program. It puts the establishment at ease, since PACE uses same practice that has been used since the 1700s.

5. How PACE Works
Energy project construction proceeds exactly as it typically would.
Rather than using a conventional bank for project finance, property owner uses a PACE provider.
PACE provider directs municipality to add a line item to property’s regular tax bill, in annual repayment amounts for duration of the financing.
PACE repayment is collected with property tax payments, no additional paperwork or bank payments for the property owner.
Municipality remits payment to PACE provider.
Presenter Tip: Sometimes it helps to remind the audience that PACE only effects the property owners who choose to use it. It’s 100% voluntary and does not impact the overall tax base in any way.

6. Most Buildings, Even Non-Profits
Who can use PACE?
Most Buildings, Even Non-Profits
Presenter Tip: Even if non-profits don’t typically receive a property tax bill, the PACE assessment can be added to their water charges or PILOT,. The municipality can also create a new piece of documentation that is issued to the non-profit at the time that taxes normally go out.

7. 32 States + DC, 80+% of US Population
PACE Legislative Map
32 States + DC, 80+% of US Population
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HI Existing Authority
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PACE enabled
2016 legislative initiatives 7

8. 730+ Projects – $230+ mil – 2,700+ jobs created
C-PACE Programs Today
730+ Projects – $230+ mil – 2,700+ jobs created RI DC
PACE enabled
Early stage PACE program development
Launched PACE programs
PACE programs with funded projects 8

9. Benefits of PACE No Out of Pocket Cost
PACE covers 100% of hard and soft costs
No money down
Property owners can reallocate funds previously reserved for energy projects
Presenter Tip: Most typical lending institutions only provide about 85% of project costs, so the property owner needs to come up with the remaining 15%.
Especially important for properties with limited expenditure budgets (non-profits, new businesses, etc.)

10. Benefits of PACE Long-Term Financing
PACE allows terms up to 20 years, while standard commercial lending rarely exceeds 5-7 years.
20 year terms allows projects with long payback periods, rather than only low-hanging fruit with quick paybacks.
Allows comprehensive projects with deeper impact on energy usage and significant effect on bottom line.

11. Benefits of PACE Cash Flow Positive
Long terms allow the financing to be amortized up to 20 years.
This makes it possible for the annual PACE repayment to be LESS THAN the amount being saved on annual utilities from the project.
Example: During the repayment term, the utility bills decrease by $20K annually, PACE repayment is $15K annually, so the NOI increases by $5K. When the financing is paid off, the business is saving $20K+.
Presenter Tip: With PACE you don’t have to wait to pay off the financing to see an economic benefit. Even during the repayment process the business is seeing cash flow in.

12. Benefits of PACE Transferability
PACE is attached to a building, not an individual or business.
If the building is sold, PACE repayment seamlessly transfers to the new owner as part of the taxes, as well as the savings from the energy project.
Removes part of the risk in investing in capital expenditures.

13. Benefits of PACE Leasing Structures
PACE tax assessments can be passed on to tenants under most lease forms.
Tenants save on energy costs and experience the same net payments, or sometimes less!

14. Mortgage Lender Consent
150+ Lenders Support PACE Nationwide
PACE becomes part of taxes which is senior to other debts. Most legislation requires existing lenders provide consent or acknowledgement that their lien will become secondary.
They usually say YES, here’s why:
PACE project makes the lender’s collateral more valuable
Positive cash flow enhances the property owner’s ability to make their mortgage payments
Only the portion of a PACE assessment in arrears is senior
Underwriting standards make sure projects are appropriate

15. Getting Started with PACE
Legislation
State passes legislation defining features of their PACE program.
Form a coalition of involved stakeholders to draft legislation.
PACENation can provide guidance with a “Legislative Checklist” and work with your lawyers upon request.
Municipalities within the state pass local ordinances to enable the PACE program.
Examples available on

16. Getting Started with PACE
Program Models
Successful PACE Programs have:
Administration entity to process deals
Public/Private Sector Funding
Relationship with Energy Service Professionals
Municipal understanding and cooperation

17. PACE Commercial Market Stats
Cumulative Financing
Displaying data for projects with known closing dates (totaling approx. $217 million)

18. $3.4M PACE Energy Efficiency Project
Simon Property Group – Great Lakes Mall, OH
$3.4M PACE Energy Efficiency Project
“We hope to serve as pioneers in this arena, encouraging others to explore the many ways to reduce energy use now, rather than delaying sound financial and environmental decisions.”
George Caraghiaur, former SVP for Sustainability at Simon Property Group 18

19. $1.4M PACE Energy & Solar Upgrade
Prologis, Inc. Headquarters – San Francisco, CA
$1.4M PACE Energy & Solar Upgrade
“Prologis is participating in the PACE program in order to promote new, innovative solutions for financing sustainable building improvements. It provides the flexibility to drive more energy improvement programs and that’s something everyone should embrace.”
Jack Rizzo, Managing Director, Global Construction and Renewable Energy, Prologis 19

20. Supporting the PACE Marketplace
PACENation
Supporting the PACE Marketplace
PACENation is a non-profit with a mission to promote PACE financing by providing leadership, support, resources, advice, networking and problem solving for a growing universe of PACE market participants.
We’re here to help!
Please reach out to us at or