How PACE can unlock solar financing for Maryland buildings
When building owners pay for sidewalks and sewers they are eligible to finance their construction through their property taxes. This is because these things are considered ‘public benefit improvements’. PACE (Property Assessed Clean Energy) financing treats renewable energy technology and energy efficiency upgrades in the same way. This has the potential to unlock capital for Maryland’s commercial properties, nonprofits, and places of worship to carry out cost-saving energy upgrades installations. PACE allows private capital providers to provide upfront financing to commercial property owners for qualifying improvement projects, and to collect the repayment through annual or semi-annual surcharges on the property’s tax bill.
By lowering a property’s energy expenses, PACE allows building owners, nonprofits, and places of worship to improve the value and competitiveness of their asset while ensuring compliance with energy and building codes. PACE financing provides this at no upfront cost. It is then repaid over longer terms, up to twenty years, when compared to traditional financing avenues. Eliminating upfront capital costs allows building owners to quickly realize savings from energy reduction. This can offset the annual surcharge payment, making these projects cash flow positive from day one.
Since 2010, more than thirty states have introduced PACE. This has led to the retrofit of more than 750 commercial properties. This totals roughly $250 million in PACE investment. The Maryland General Assembly introduced PACE in 2014. Under the Maryland statute, almost any commercial or industrial building including office buildings, restaurants, hotels, places of worship, and community-based organizations are eligible. PACE financing can be used to cover energy efficiency upgrades such as, but not limited to HVAC, high efficiency lighting equipment, and building envelope improvements. Additionally, our PACE enabling legislation allows for property owners to finance renewable energy equipment such as solar panels.
For more information about PACE and bringing PACE to your community, please contact info@md-pace.com or call (443) 910-4932.