In today’s economy, it is vital for municipalities to save money in any way they can. However, sometimes to save money it is necessary to make an upfront investment. A municipality may not have the same type of cash flow or ability to borrow with traditional financing that a private business would. Luckily, PACE (Property Assessed Clean Energy) is a program that may offer the ideal solution. Discover more about what this program is and how it can benefit municipalities large and small.
What is PACE Anyway?
PACE is an acronym that stands for “Property Assessed Clean Energy.” The PACE program is a source of financing for upgrades that are energy efficient, conservation and renewable energy, PACE is available for property owners of all types, including municipalities, to pay for energy efficient upgrades like modern HVAC systems, solar energy panels, insulation to reduce energy use and other upgrades that reduce the use of energy or utilize clean energy. PACE is applicable for all types of properties—from town-specific buildings like libraries and police stations to residential and commercial holdings that may be in the municipality’s name.
PACE financing is ideal for municipalities because it can cover both hard and soft costs of a project (such as materials, labor and upkeep.) Because many municipality upgrade projects are on the large side, it is particularly important to note that PACE financing can take place over a 20 year period. Therefore, even the largest improvement project is not out of reach.
What Benefits does PACE offer Municipalities?
While it can be useful for residential and commercial property owners as well, PACE offers a number of benefits to municipalities in particular. Some of these advantages include:
Ability to Upgrade with No Upfront Costs
In many municipalities, there is a shortage of liquid assets. Making desired upgrades may be impossible—without PACE. You can get started with energy efficient upgrades without ANY upfront cost. This isn't a typical loan with huge fees associated. The idea is to make energy efficient improvements that benefit everyone.
PACE Improvements May Create Cash Flow
The energy efficient improvements that PACE works with will nearly always create a positive cash flow. Almost immediately, you may save money if you are choosing the right upgrades. According to Pacenation.us, “The annual energy savings for a PACE project usually exceeds the annual assessment payment, so property owners are cash flow positive immediately.”
20 Year Payback Period
For many municipalities, a short term loan may not be the best option. After all, for a major energy friendly improvement, the cost can be significant. PACE offers a 20 year payback period, which may not burden a municipality as much—especially if cash flow is improved due to utility cost savings.
The PACE program can be an excellent way to make needed improvements and help a municipality reach its efficiency and climate goals. The changes made can have a big effect on the overall satisfaction of business owners and residents too. After all, whether your municipality is large or small, a little help never hurts! Contact the PACE financing experts at XtraLight today and discover how PACE can help make your city a brighter place to live and work!