Powering On-Site Energy with PACE Financing

A Paradigm Shift in Funding

Energy Efficiency and

Renewable Energy Projects

Presented

By:

"An Energy Solutions Company"

PACE Financing

Reduce

Customer

Costs

Reduce

Investor

Risk

Reduce

Distributor

Hurdles

Close

More

Deals

Limited

Capital

Limited

Terms

Long Payback

Periods

The Answer?

PACE Property Assessed

Clean Energy

Financing

What is PACE?

• Non-Recourse financing program for

for energy efficiency, renewable, rgy

& water conservation projects

• Voluntary property improvement tax

tax assessment utilized for energy

efficiency improvement projects

• Based on one of the oldest property

improvement financing models in the

U.S.

What is PACE?

• Legislation adopted by a state

• PACE Districts created by local

governments including counties,

cities, and townships

• Provides long-term, fixed rate funding,

repaid as a property tax

• Energy savings should be greater than

annual funding cost

• Can include maintenance & end of life

replacement costs

Where is PACE?

• Originated in California in 2009

• Adopted in 32 U.S. States and the

District of Columbia

• Has expanded into other countries

Where is PACE?

Information on PACE programs

in the U.S. is available through the

PACENation and DSIRE organizations

Why PACE?

Eliminates customers costs and

conserves their capital

• No up front capital required 100% of all

project costs are covered

• Energy savings covers 100% of the annual

payments for the term of the funding

Reduces investor risk

• Property “assumes debt”, not the property

owner local government backing

• Transfers with property upon sale, does

not require payoff

Why PACE?

It’s non recourse

Some states require project to be cash

flow positive over term of funding

Some states require a performance

guarantee

Does not affect property owners credit

or borrowing power

Provides long-term, fixed rate financing

through assessment Typically 20 yrs

Increases property value, real property

improvement not personal property

Can be utilized multiple times on same

property

Savings & ROI includes maintenance

and end of life replacement costs

Covers “real property” assets including

including items like electric vehicles

Assets must remain with the property if

if sold, can also be transferred

Why PACE?

Reduces Distributor

Hurdles

Who Funds PACE?

PACE statutes allows PACE projects to

be funded through a variety of sources

Private Equity

Self Funding

Traditional Funding

Bonds

Amount available for a PACE project is

dependent on several factors and can

range from 20% to 30% of the properties

FMV

1) Property Value

2) Mortgage LTV

3) Annual Energy Spend

4) % of Value by Lender

5) PACE District % of Value

How Much is Available?

Who Qualifies for PACE?

Businesses in PACE Districts

More to come!

For-profit and non-profit commercial &

industrial businesses in most states

In most states Government & Publically

owned buildings not allowed

Business outlook is good

Property is not leveraged

(Up to 95% LTV in some cases)

Typically Projects > $250K but smaller

can be funded

Don’t own it? Get permission!

Who Qualifies for PACE?

What Technologies Can be

Financed Through PACE?

Projects That Qualify…….

Facility Upgrades

New Construction

Process Improvements

Refinancing of Prior Projects

But

Wait

There’s

More!!

f

Technology

Incentives

Tax Credits

Financing

The Success of PACE

Private College

CHP Proposal Overview

CHP Proposal Assumptions

1) Current Cost of Electricity $785,000

2) Proposed Cost of Electricity $0

3) Current Cost of Boiler Gas $230,000

4) Proposed Cost of CHP Gas $520,000

5) Current Life Cycle Cost Assumptions

10% of $230,000 Utility Cost (Maint.)

2% Annual Utility Cost Increase

5% Annual Inflation Rate Increase

6) Proposed Life Cycle Cost Assumptions

$116,000 Annual Maintenance Cost

2% Annual Utility Cost Increase

5% Annual Inflation Increase

7) Life Cycle Cost Analysis

2% Year-Over-Year Energy Cost Increase

5% Year-Over-Year Inflation Rate

7% Interest Rate

20 Year Term

CHP Proposal Assumptions

Avg. Annual Cost (Current) $1,280,754

Avg. Annual Cost (Proposed) $818,950

Avg. Annual Savings $461,804

Annual Assessment Payment $290,452

Avg. Annual Net Savings $171,352

CHP Proposal Summary 20 Year Term







Annual Savings…







Is Greater Than Annual Cost……







Resulting in Positive Cash Flow!

CHP Proposal Financial Summary

20 Year Term

CHP Proposal Financial Summary

20 Year Term

Cash Flow Positive From Day 1!

Powering On-Site Energy with PACE Financing

Economy & Finance

Transcript of Powering On-Site Energy with PACE Financing