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PACE Financing: Learn How To Maximize Your Funding Potential


What is PACE financing?

PACE stands for “property assessed clean energy”. It’s an innovative tool for financing energy efficiency and renewable energy improvements on private property. PACE programs exist for:

  • Commercial properties (also called Commercial PACE or C-PACE)

  • Residential properties (also called Residential PACE or R-PACE

The PACE loan program is an innovative tool that can be used in conjunction with various other tools to finance energy efficiency and renewable energy improvements on private property. The Pace Model is an effective financing mechanism to reduce energy costs, strengthen the local economy, and improve the quality of life for participating property owners, investors, and citizens. The program works by offering low-interest loans to property owners who want to make energy efficiency improvements or install renewable energy systems in their homes or business properties. The loan is repaid through an increase in property tax assessment payment semi-annually, over a period of 15 years to 30 years depending on the county PACE guidelines.

What is C-PACE?

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C-PACE is a relatively new alternative financing mechanism that provided upfront capital to commercial property owners for qualified energy improvements. The C-PACE program allows commercial property owners and developers access to low-cost, long-term financing which is paid back through the property assessment on the property owner’s tax bill. Most property assessment tax bills are paid semi-annually or annually depending on the property location. C-PACE helps to facilitate the reduction of greenhouse gas emissions by making clean energy upgrades to the commercial facility while helping to play a vital role in supporting state and local government energy efficiency, sustainability, and renewable energy initiatives. State of local governments provides the legislation and framework, allowing private capital lenders to provide financing for eligible energy improvements under the C-PACE program.

What Is Included In a Pace Program?

One of the primary components of any PACE program is the installation of energy efficiency improvements in homes or businesses. Once a Pace Loan program is implemented, the primary focus will be on the acquisition and installation of energy efficiency improvement measures. Among the improvements that can be made are insulation, air sealing, heating, ventilation, and air conditioning systems; water heaters; lighting upgrades; solar panel systems; rooftop photovoltaic panels; and new high-efficiency appliances.

Pace and Solar

These types of improvements vary by location and utility provider. Some utilities offer customers a choice between installing solar panels or performing other energy efficiency upgrades. Homeowners who choose solar panels may be eligible for additional financial incentives through their utility company. There is an average cost of about $15,000 for the installation of solar panels. As a result, your energy bill will vary according to the size and amount of energy your business consumes, as well as its location. Depending on where you live and whether or not there are any state or federal incentives available for homeowners thinking about installing solar panels, the cost of solar panels will also vary.

How Does It Work?

The PACE loan program is not just a national initiative, but it is also a program that has been tailored to meet the needs of the local market in each region. State legislation is passed that authorizes municipalities to establish PACE programs, and local governments have developed a variety of program models that have been successfully implemented. Regardless of the model, there are several keystones that hold true for PACE programs.


PACE financing is structured as an installment loan to be repaid over time from the savings in energy costs resulting from energy-efficient upgrades to homes or small businesses. Participating property owners sign up for energy efficiency improvements through their utility company or other contractors. Once the work has begun, they pay back the cost of the improvement through monthly payments (in most cases) over a period of 30 years or less. The monthly payment amount is usually between 1 percent and 5 percent of their property taxes (or rent).

This approach allows property owners to finance an improvement that may otherwise be too expensive out of pocket, while also giving them the support they need to make those changes happen. Since the financing is paid back over time through utility bills rather than lump sum payments at closing, it makes it more affordable for people with limited income or savings accounts.

Who Is Eligible For Pace?

PACE makes it possible for owners of residential, commercial, industrial, multifamily, and nonprofit properties to obtain low-cost, long-term financing for energy efficiency, water conservation, renewable energy projects, and more. PACE financing is available to owners of residential and commercial property in the unincorporated portions of the county and in select cities/towns. Specific terms vary by provider so make sure your state and county have a PACE financing administration and program established.

C-PACE funds provide upfront capital with 100 percent financing for qualified energy improvements, often with terms ranging from 20 to 30 years depending on the state and local PACE programs. The resulting annual energy savings and reduction in operating and maintenance costs typically exceed the amount of the annual assessment payment, so the property owner is immediately cash flow positive.   

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PACE can cover 100 percent of a project’s hard and soft costs with no out-of-pocket expenses. Therefore, there’s an increase in working capital dollars that can be spent on other CAPEX, OPEX, capital projects, budgetary expenses, or a business expansion. 

Local governments are pro-PACE because it’s an Economic Development initiative that lowers the cost of energy for businesses in their community and creates efficiency in the municipality. 

Additionally, it encourages new business owners to invest in energy-efficient initiatives in the area and creates jobs using the local workforce. PACE projects also have a positive impact on air quality and the environment, creating a healthier, more liveable community.

Pace States

PACE-enabling legislation is active in 38 states plus D.C., and PACE programs are now active (launched and operating) in 30 states plus D.C. Residential PACE is currently offered in California, Florida, and Missouri. 

“Upwise Capital is proficient at securing C-PACE transactions funded for cannabis property owners,” Lustberg said. “We offer our clients the most energy-efficient and cost-effective development strategies when building out their cultivation, manufacturing, or lab facilities.”

C-PACE reduces costs for building tenants and enhances property values for building owners and developers while creating a more energy-efficient building that offsets bills and energy consumption.

Pace Loan

Eligible Equipment under the Cannabis PACE Program

•         Lighting

•         Building Controls

•         HVAC, Boilers, and Chillers

•         Building Envelope (roof, windows, doors)

•         Insulation

•         Energy Management and Control Systems

•         Electrical Distribution

•         Power Generation

•         Compressors, Motors, and Drives

•         Refrigeration Systems

•         Waste Energy Recovery

•         Combined Heat/Power Systems

•         Solar, Geothermal, and Wind Systems

PACE Financing Features

  •          100% financing including soft cost
  •          Fixed-rate up to 30 years
  • Low cost financing, 5% – 6% for traditional properties and 7% – 9% for cannabis properties
  •          Non-recourse to borrower
  •          Off-balance sheet funding
  •          Secured by special assessment
  •          Debt transfers with ownership
  •          Energy savings offsets cost of financing
  •          Preserves owner’s capital for other uses
  •          Refinance available in most markets

Owner Benefits

  •          Lower Cost of Capital
  •          Non-Recourse to the owners
  •          Preserves Owner’s Capital
  •          Debt Transfers in the event of a sale
  •          Property becomes more energy efficient

Our team at Upwise Capital is here to assist you with every step of the way to secure the pace financing needed to help your business grow. If you have any questions regarding how equipment financing works, please call our team at 77-55-UPWISE or email [email protected].  You can also apply online for pace financing, so you can get back to work and running your business.

So…What do you think? 

We want to hear from you.  What do you think of this article and was it helpful in your search for pace financing? 

Let us know by leaving a reply below.   Feel free to share this article on your social media. 


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