Property Assessed Clean Energy (PACE)
PACE financing is a mechanism to finance energy efficiency and renewable energy Commercial projects in Ohio. PACE financing in Ohio involves public-private cooperation between a property owner, a lender, and a municipal corporation. The lender makes a loan to the property owner for the property owner to undertake energy efficient upgrades. PACE allows the municipal corporation to levy special assessments on the property.
A vital part of PACE financing is requiring the property where the PACE is to take place to be located within an ESID. An ESID is a public body created under Ohio law and controlled by a board of directors. An ESID is a specific type of special improvement district. Special improvement districts have been used by townships and municipal corporations to take on locally controlled public improvement projects. The ESID provides for the PACE project by working with the property owner to develop a plan for the project. Once levied, the special assessments are added to the property owner's tax bill. The special assessments are collected by the county with the rest of the property taxes and settled under its normal processes. The amount of the special assessment for that period is transferred to the lender to repay the loan as provided for in the financing documents. Assessments are considered a loan to the property and not the owner. Upon sale of the property, the assessments remain with the property and are payable by the new owner.
Projects Eligible for PACE Financing
- Upgraded electrical system
- LED lighting
- Energy efficient heating and cooling systems
- Energy efficient windows