Downloaded 10 times
Uploaded byKerry Kilpatrick
Powering On-Site Energy with PACE Financing
The document presents PACE (Property Assessed Clean Energy) financing as a non-recourse funding option for energy efficiency and renewable energy projects, aiming to reduce customer costs and investor risks. It describes the mechanisms by which PACE is implemented, including voluntary tax assessments and long-term, fixed-rate funding, and notes its adoption across 32 U.S. states. The proposal includes financial analysis demonstrating significant cost savings over a 20-year term for implementing Combined Heat and Power (CHP) technology.
More Related Content
Similar to Powering On-Site Energy with PACE Financing
Powering On-Site Energy with PACE Financing
- 1. A Paradigm Shiftin Funding Energy Efficiency and Renewable Energy Projects Presented By: "An Energy Solutions Company" PACE Financing
- 2.
- 6.
- 7.
- 8.
- 9.
- 10.
- 11. 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.
- 12. 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
- 13. Where is PACE? •Originated in California in 2009 • Adopted in 32 U.S. States and the District of Columbia • Has expanded into other countries
- 14. Where is PACE? Informationon PACE programs in the U.S. is available through the PACENation and DSIRE organizations
- 15. Why PACE? Eliminatescustomers 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
- 16. Why PACE? It’snon 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
- 17. Increases propertyvalue, 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?
- 18.
- 19. Who Funds PACE? PACEstatutes allows PACE projects to be funded through a variety of sources Private Equity Self Funding Traditional Funding Bonds
- 20. Amount available fora 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?
- 21. Who Qualifies forPACE? Businesses in PACE Districts More to come!
- 22. For-profit andnon-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?
- 23. What Technologies Canbe Financed Through PACE?
- 25. Projects That Qualify……. Facility Upgrades New Construction Process Improvements Refinancing of Prior Projects
- 26.
- 27.
- 28. The Success ofPACE
- 29. Private College CHP ProposalOverview
- 30. 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
- 31. 6) Proposed LifeCycle 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
- 32. 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
- 33. 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…
- 34. 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 Is Greater Than Annual Cost……
- 35. 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 Resulting in Positive Cash Flow!
- 36. CHP Proposal FinancialSummary 20 Year Term
- 37. CHP Proposal FinancialSummary 20 Year Term Cash Flow Positive From Day 1!