PACE

Financing for Businesses & Organizations

What is PACE?

  1. Property-Assessed Clean Energy (PACE) is a way to finance energy efficiency and renewable energy upgrades to the buildings of commercial, industrial, nonprofit, and multihousing property owners.
  2. Energy-saving measures pursued by the owners receive project financing and are repaid as a separate item on their property tax assessment for a set period.
  3. PACE financing helps overcome several barriers to making energy-related building improvements. It eliminates high up-front costs, reduces dependence on credit, and allows for comprehensive retrofits.

How Does PACE Work?

 

Project Process

  • Local government establishes PACE program
  • Owner completes energy audit to find savings
  • PACE administrator approves financing
  • Owner completes energy improvements
  • Owner uses savings to repay assessment

Qualifications

  • Owners current on mortgage and property taxes
  • No federal or state liens against the property
  • Must not be in bankruptcy proceeding
  • Consent from current mortgage lender
  • Term can't exceed useful life of improvements
  • Improvements can't exceed 20% of property value
 

Where can PACE be used?

65 of Minnesota’s 87 counties now allow PACE financing, as you can see on the map below. In these counties, there are 177 businesses, multi-family apartment buildings, nonprofits, places of worship, and other commercial entities with completed projects. Explore the map to learn more!

One of our company-wide focus areas is to eliminate waste, including wasted energy, so increasing the efficiency of the buildings only made sense. PACE financing provided the opportunity to complete the improvements in an economical way that allows cash on hand to be used for growing the business rather than facility updates.

Sara Zimmerman, AirCorps Aviation in Bemidji, MN

PACE Project Videos

What programs exist in Minnesota?

There are currently two commercial PACE programs available to Minnesota cities and counties that want to help finance building energy improvements in their jurisdictions.

MinnPACE is available to businesses and nonprofits in any city or county in Minnesota. Interested counties and cities can work with the Saint Paul Port Authority to set up a program in their jurisdiction.

Program Details

  • Energy Efficiency and Renewable Energy projects anywhere in Minnesota
  • Businesses, multi-family housing, nonprofits, incl. places of worship
  • Interest rate usually under 5% for a term of less than 10 years
  • Term of up to 15 years
  • Amount limited to 20% of assessed property value
  • Primarily for multi-tenant bldgs. & renewable energy projects
  • Host City or County institute a requested special assessment
  • Port Authority issues debt & administers program
  • 100% financing and immediate positive cash flow

More Resources

MinnPACE Application
Annotated Application
Sample City JPA
Sample County JPA

This program is available to businesses and nonprofits in the Rural Minnesota Energy Board’s counties and is administered by the Southwest Regional Development Commission.

Program Details

  • Energy efficient and renewable energy retrofit of existing commercial / industrial buildings
  • Property must be classified as Commercial or Industrial
  • Businesses, multi-family housing, nonprofits, incl. places of worship
  • Applicant(s) is/are the legal owner of the property described in the application.
  • Property must be located in the 18-County RMEB Area. (Blue Earth, Brown, Cottonwood, Faribault, Freeborn, Jackson, Lincoln, Lyon, Martin, Mower, Murray, Nobles, Pipestone, Redwood, Renville, Rock, Sibley, Watonwan)
  • Property owner is current on all mortgages. Property owner is not in bankruptcy and the property is not an asset in a bankruptcy.
  • There are no federal or state income liens, judgment liens, or similar involuntary liens on the Property.
  • Must have an Energy Audit performed by approved energy auditor. Must show significant cost savings.
  • Maximum PACE Loan will be up to 20% of the assessed property value or $100,000.
  • Minimum PACE Loan will be $5,000
  • Greater than a 1:1 savings to investment ratio (projected savings based on energy audit should exceed investment costs)
  • Maximum of 20 years to repay loan. Loan term must not exceed estimated life expectancy of improvement.
  • Interest rate determined by RMEB Review Committee, currently 4%
  • 1.0% origination fee

More Resources

RMEB PACE Brochure
RMEB PACE Application
RMEB PACE Presentation

Downloads

PACE Factsheet
Frequently Asked Questions