United States
An on-tax financing tool that catalyses private capital to cover energy efficiency building improvements. Its long-term repayment model, attached to property taxes, generates adoption incentives for homeowners.
What solution does the innovation propose?

Property Assessed Clean Energy (PACE) addresses some of the main barriers traditionally hindering adoption of energy efficiency solutions and related projects. Through 100% upfront financing, fixed interest rates and long-term repayment, it makes energy efficiency retrofits accessible to a wider population, while enabling contractors to achieve a larger scale. By overcoming these bottlenecks, the mechanism contributes to improve individual’s health and wellbeing, as well as to meet society’s climate and energy goals.

Impact evidence

  • 282,000 improvement projects completed.
  • Economic impact of $15.8B.
  • Every year, the programmes create 126,000 jobs.
  • Renovation projects have led to an estimated 29.74 billion kilowatt/hour savings.
  • 7.44 million metric tons of carbon abated.
How does it work?

The financing mechanism solves the upfront cost barrier by having private investors finance 100% of project costs. These are repaid and collected with regular property taxes and charges. Cities place liens on homes that use PACE, thus providing investors with security of repayment.

Long-term repayment of up to 20 years matches the useful life of improvements made on properties. Since energy efficiency savings exceed the annual payments, the project cash flow is positive for homeowners.

It can be used to pay for new boilers, refrigerators, windows, insulation systems, renewable energy, water conservation upgrades among other devices. Technology has to be permanently affixed to a building, as the debt is attached to the property and transfers to a new owner upon sale.

Almost any building can be retrofitted with this finance model, ranging from homes to hotels and even industrial buildings. The mechanism can be combined with other incentive programmes.

Geographical scope

Where was initially developed
Berkeley (California, United Sates).
Where has been implemented so far
PACE-enabling legislation is active in 38 states, and PACE programmes are active in 23 states. The model has been adopted in Australia, Canada, and South Africa. EuroPACE, is being piloted in Olot (Spain). There are efforts to develop the model in China.
Last updated: 
September 2020