Are you looking for a financing tool that helps for-profit businesses do energy efficiency retrofits on their property? Property Assessed Clean Energy, (or PACE for short) have the answers you’re looking for! PACE allows property owners to borrow money from newly established municipal financing districts to finance energy retrofits (energy efficiency, renewable energy, and water conservation upgrades) and repay the loan through an annual special tax on their property bill. The premise of the program is that the business does not see a decrease in net profits—and once the loan is repaid, the business realizes the savings on their operating costs. Find the answers you’re looking for, including program objectives and requirements Property Assessed Clean Energy brochure about PACE.
PACE is a financing tool used to assist commercial and industrial businesses (including agri-business) with improvements that substantially increase energy efficiency. PACE allows businesses to make these fixture improvements without the up-front capital outlay. Costs for the improvements are paid back through a special assessment on their taxes. The increase in property taxes is offset by the decrease in energy costs so that the business sees no change in the bottom line.
The key points to note:
- Business must have an EMV (estimated market value) (taxable) of at least $50,000 to qualify
- Total loan amount is tied to property value (20% of the EMV). Note: This is a 2014 legislative change, up from the 10% previously offered (e.g. a property with an Estimated Market Value of $1,000,000 would qualify for $200,000 in loan dollars)
- Loan size ranges from $5,000-100,000 (no match requirement)
- Loan amount based on projected energy savings (determined by an energy audit)
- Must be a 1:1 savings ratio (meaning—the business sees no change in net operating costs or better yet—a reduction in operating costs!)
- Must be located in the Rural Minnesota Energy Board region (18 counties)
- 1.5% origination fee
- 4% minimum interest rate
This is a PILOT program with the potential to benefit business and industry in your area—feel free to SHARE the brochure! If you have any businesses that you feel would be interested, please pass this information along to them.
Any questions—please email or call Betsy Herding, the Economic Development Director of the Southwest Regional Development Commission at 507-836-1638. We need your help to make PACE a success!
