Commercial Property Assessed Clean Energy (PACE) is an innovative way to finance clean energy projects on commercial, multifamily, and nonprofit buildings (excluding condos and properties with less than five dwellings). Implementation of PACE in Virginia localities is one of the VAEEC’s five policy recommendations outlined in our latest report titled “Why Energy Efficiency is a Smart Investment for Virginia.” PACE loans are designed to be long term loans (up to 20+ years) secured by a lien that has a priority status equal to a tax assessment, thus senior to a mortgage lien. By setting up a PACE program, a locality can enable private sector loans for 100% of total project costs by placing a special assessment lien on the property that the owner repays over time as part of his/her tax or utility bill.
PACE in Virginia
Legislation passed in the 2015 Virginia General Assembly, and signed by Governor McAuliffe, enables commercial PACE loans in Virginia.
Over the course of the last few years the VAEEC has been intimately involved in stakeholder meetings to develop the guidelines and programs to implement PACE in the Commonwealth. Virginia joined more than 30 states and the District of Columbia in adopting PACE legislation.
In April 2016 Virginia Community Capital released a PACE Feasibility Study, the result of a grant from the Oak Hill Fund to explore implementation of PACE financing in Virginia that included several stakeholder meetings.
There are several localities across the Commonwealth interested in developing PACE programs. Currently, Arlington County is the only one developing a program. They announced the recipient of their program administrator in January 2017 and plan to pass the County Ordinance later this fall. Arlington’s program is expected to be up and running by the end of 2017.
The VAEEC is committed to accelerating the implementation and utilization of commercial PACE throughout Virginia. Combining efforts with other stakeholders, we are working to facilitate interest in PACE by building a coalition of supporters and engaging with localities to educate, work with, and encourage them to move forward with developing PACE programs.
In 2017, the VAEEC joined the Mid-Atlantic PACE Alliance (MAPA), which is comprised of state agencies, non-profit institutions, and private businesses working to accelerate the development and utilization of PACE in Virginia, Maryland, and DC. This effort, which is being led by the Department of Mines, Minerals and Energy, promotes the collaboration among local and state governments, capital providers, PACE program administrators, energy service contractors, and building owners to create low-cost, standardized guidelines that will enhance financing efficiency and increase the volume of PACE projects.
MAPA’s objective is to create a cohesive regional market consisting of commonalities in PACE program design, administrative structure, marketing, and customer access and perception. The goal is to achieve consistency and growth in PACE programs within the tri-state area to generate a minimum of $80 million in PACE loan closings by 2020. The Alliance will hold several public and private sector stakeholder meetings to collaborate and share best practices and identify and act on measures that result in the acceleration and uptake of PACE programs and projects.
If you would like to add your name to the growing list of PACE supporters, click here.