PACE Financing to JumpStart Rooftop Solar?

By: Michael Polentz

Depending on the specific program and the particular project, PACE loans can cover up to 100% of the cost of project.  Like other property assessments, a PACE assessment runs with the property and can be transferred to a purchaser upon sale. Terms range from 5 to 25 years with rates starting at approximately 6.75% for a 5 year loan and 7.5% for a 10 year loan plus administrative fees. The amount of financing is capped relative to the property's total debt to equity ratio. Among the thousands of projects eligible for PACE financing, some of the most popular include the installation of rooftop solar systems, energy efficient roofing and windows, and water efficiency improvements (such as gray water reclamation systems). Rooftop solar providers have also, in limited instances, utilized PACE in conjunction with the power purchase agreement model to increase security for investors, reduce financing costs and make solar available to a larger consumer population.

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