PACE Market Overview Paper Released

Johnson Controls Institute for Building Efficiency, PACENow, and the Urban Land Institute are pleased to announce the release of the white paper, titled "Setting The PACE: Commercial Retrofit Financing," a paper offering an overview of the commercial PACE market that is geared towards the commercial building owner community. 

The paper takes a close look at four active PACE programs, which demonstrate the range of financing approaches within the PACE industry. There programs are:
 

• Sonoma County Energy Independence Program (SCEIP), CA

• GreenFinanceSF, CA

• Toledo-Lucas County Port Authority PACE Program, OH

• DC PACE Program, D.C.
 

As of February 2013, there were 16 commercial PACE programs accepting applications to finance building efficiency projects. Most of these have been active for less than a year, and some are just now completing their first projects. As this new market develops, early-stage PACE programs have taken different approaches to program design and administration. Lessons learned from their experiences may well shape the overall success of PACE in the years to come.
 

Program designers and advocates believe that PACE financing structures offer significant advantages over other financing options, including:
 

• Zero up-front cash investment

• Immediate positive cash flow

• Long-term financing (up to 20 years)

• PACE assessment stays with the property upon sale

• Ability to pass payments through to tenants

• Low interest rates

• Higher rents and greater long-term property value because of energy efficiency

• Preservation of borrowing capacity through off-balance–sheet financing

To read more, download this white paper here. 

Deutsche Bank and The Rockefeller Foundation Release Building Energy Retrofit Study

March 01, 2012 / Press Releases

US Retrofits could yield $1 trillion of energy savings and create 3.3 million job years; new financing models can unlock this opportunity

DB Climate Change Advisors (DBCCA) and The Rockefeller Foundation today released a research study which examines the potential size and investment opportunity of upgrading and replacing energy-consuming equipment in US real estate. The paper, entitled, “United States Building Energy Efficiency Retrofits: Market Sizing and Financing Models,” highlights this investment opportunity, with the potential for significant economic, climate, and employment impact. DBCCA is the climate change investment and research business of Deutsche Bank’s Asset Management business.

Judith Rodin, President, The Rockefeller Foundation, noted “buildings consume approximately 40% of the world’s energy and are responsible for 40% of global carbon emissions. However, proven technologies to retrofit buildings can both conserve energy and - even more importantly in these difficult economic times – have the potential to create a large number of jobs. With the release of this new report, outlining both the investment and job opportunities, I am increasingly hopeful that this market can achieve its full potential.”

Mark Fulton, Global Head of Climate Change Investment Research for DBCCA, stated “We believe that the emerging Energy Service Agreement financing structure offers significant near term potential to scale quickly and meet the needs of both real estate owners and capital providers in the commercial and institutional market, without the requirement for external enablers such as regulation or subsidy.”
In this report, DBCCA and The Rockefeller highlight that:

• ~$279 billion could be invested in retrofitting the residential, commercial, and institutional market segments in the US.
• This investment could yield more than $1 trillion of energy savings over 10 years, equivalent to savings of approximately 30% of the annual electricity spend in the United States.
• If all of these retrofits were undertaken, more than 3.3 million job years could be created.
  • These jobs would include a range of skill qualifications, and would be geographically diverse across the United States.
• Additionally, if all of these retrofits were successfully undertaken, it would reduce U.S. emissions by nearly 10%.

The report goes on to investigate a number of financing models which offer the potential to scale investment in these markets and overcome both the supply and demand side barriers. Utilizing the work done by the World Economic Forum as a reference point, the report profiles these models, including the Energy Services Agreement (ESAs), Property Assessed Clean Energy (PACE) and On-Bill Finance (OBF), in addition to examining the largest historical provider of energy efficiency upgrades, the Energy Services Companies (ESCOs).

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