PACE loans, usually for energy savings, could be used for more kinds of projects under new bills
New bills could expand PACE — a commercial loan program for energy efficiency and renewable energy.
PACE stands for Property Assessed Clean Energy. Commercial property owners can use PACE loans for energy efficiency or renewable energy projects that otherwise would cost too much upfront.
PACE loans spread the cost over 20 to 25 years and roll the payments into the owner's property taxes.
If the owner sells the building, the PACE loan transfers with it, along with the energy savings.
Todd Williams is President of Lean and Green Michigan, the nonprofit that coordinates the loans.
"It's an opportunity for commercial property owners that many of them are still unaware of," he said, adding that expanding awareness of PACE often relies on outreach by county economic development agencies, his own group, and word-of-mouth from property owners who've participated.
The newly introduced bills add to the kinds of projects that commercial property owners can use PACE loans for, including mitigating contaminants within potable water systems, such as PFAS, increasing the resistance of properties to severe weather like flooding, or mitigating lead paint contamination.
The bills also allow property owners to take out a PACE loan without the usual contractor guarantee that they will see energy savings for each year of the period of the loan. Not having to make that guarantee could mean lower bids from contractors.
To date, 67 projects have been financed with PACE loans, for a total energy savings to the property owners of $322 million, according to Lean and Green Michigan.