PACE promises to spur green energy retrofit projects

Construction Law  

January 2012

Anyone in the Sacramento construction and real estate industries should be aware of the Clean Energy Sacramento Program. Also known as Property Assessed Clean Energy (“PACE”), the program has received quite a lot of press in recent months after Mayor Johnson announced that Sacramento was one of two cities in the country selected to participate. The program provides private funding for energy-efficiency retrofit projects, which are paid back through a 20-year voluntary property assessment. Sacramento has initially been approved for $100 million in funding.

For property owners, the PACE program is designed to encourage green retrofit work by removing some of the biggest hurdles to such projects—the initial up-front investment and the difficulty in obtaining financing. Moreover, because the money is paid back by voluntary property assessments rather than with a traditional promissory note and deed of trust, the debt follows the property rather than the owner. According to the company selected to oversee the program, Ygrene, the PACE program offers benefits that include:

  • Easy qualification for financing up to 10% of the building value;
  • Long-term repayment;
  • Little to no up-front expense;
  • Low fixed interest rates;
  • No credit impact, and participation is not credit-based; and
  • The upgrades are off balance sheet

For designers and builders, the PACE program creates potential opportunities for projects that would not otherwise happen. In addition, Ygrene promises that payment will be efficient and easy to access, and perhaps more important—secure. There is a catch, however. Only builders that are certified by Ygrene will be eligible to perform PACE projects. Accordingly, any builders interested in the program should access the Ygrene Clean Energy Sacramento website ( and follow the steps to become educated and certified.

Some administrative and legal steps remain before the program will officially begin, and currently Ygrene believes training will commence this spring. By singing up at the Ygrene website, builders will be informed when class schedules are set.

The PACE program covers a wide array of energy-efficiency projects, including adding alternative-energy systems (i.e., solar) and updating older systems. More information on what sorts of projects are eligible can be found at

© 2012 All rights reserved. Please note that the information contained herein is not intended to provide specific legal advice. You should consult with an attorney and not rely on any information contained herein regarding your specific situation.