Clean Energy Finance Breakthrough For Commercial Properties
100% upfront, long-term, minimal-covenant financing for your energy efficiency and renewable energy projects? If your property is located in a business-friendly city or county that has established a commercial Property Assessed Clean Energy (PACE) program, absolutely.
Now, for the first time, PACE allows energy project financing to be matched to the unique needs of commercial properties. PACE’s property tax-based structure enables Clean Fund to provide long-term, 100% financing that lets energy efficiency and renewable generation projects deliver compelling bottom line benefits from day one. And we should mention that the environmental benefits are pretty compelling as well.Buildings are your business. Any building improvement opportunity is constrained by budgets and is measured against the bottom line. So what can you do in the face of inefficient building systems, rising energy costs, and growing demand for greener buildings? If you’re like most building owners, you can squeeze in a few improvements with very short paybacks, but that still leaves untouched the long list of big measures with major long term savings. PACE finance from Clean Fund lets you implement the entire list of economically sensible measures and add bottom-line value to your property – while at the same time making the property significantly more attractive to tenants.
We facilitate clean energy projects that haven’t been getting done due to a lack of affordable financing. We use the Property Assessed Clean Energy (PACE) structure to provide project finance that makes sense for commercial properties. Our leading-edge PACE expertise allows us to bring the parties in a PACE project together and structure a package of measures and financing that enables everyone to benefit.
PACE projects are collaborative efforts involving Clean Fund, the property owner, an energy service/equipment provider, the mortgage lender (if there is one), and the local city or county government. Clean Fund works with all parties both individually and collectively to make the PACE process smooth and straightforward.
PACE – Property Assessed Clean Energy – is not some complicated new financial shell game. It is an implementation of a conventional structure used for over 100 years to enable the financing of projects with large upfront costs that serve the long-term public good – things like schools, sewers and under-grounding utility lines. If you pay property taxes, your bill almost certainly includes assessments used to pay off tax liens for these or other infrastructure improvements. PACE uses this same tax lien structure to allow clean energy improvements to be paid off via long-term property tax assessments.It is the tax lien structure that provides the critical element of strong collateral for a PACE loan. The very low risk of property tax default lowers the cost of PACE capital. This lower cost of capital in turn enables the ROI justification of clean energy projects with longer payback periods. PACE programs typically define the maximum loan term to be the shorter of either the working life of the improvement or 20 years. The PACE finance structure is thus extremely well suited to energy projects that have the objective of yielding long term benefits.PACE finance is a public-private-partnership. Government provides the legal framework, program structure and the property tax system to provide loan collateral and a collections mechanism. With this structure in place, clean energy projects make excellent economic sense for private sector financial partners. The result is a win-win all around, with governments seeing job creation, healthier businesses and greener energy use. Property owners get financially healthier properties – which means reduced risk for mortgage holders. Investors get secure green energy investments and vendors enjoy increased business.Contacts
John Kinney, Chief Executive Officer