What is PACE?
Property
Assessed Clean Energy, or PACE, is a financing mechanism that enables low-cost,
long-term funding for energy efficiency and renewable energy projects. PACE
financing is repaid as an assessment on the property's regular tax bill, and is
processed the same way as other local public benefit assessments.
PACE in Nevada
Existing
law sets forth the procedures for a governing body to acquire, improve, equip,
operate or maintain local improvement districts that include various types of
projects, including energy efficiency improvement projects and renewable energy
projects (NRS 271.265-271.630). The Governor’s Office of Energy sponsored Assembly Bill 5 in the 2017 Session of the Nevada Legislature as PACE-enabling
legislation which provides for the creation, by a local government, of a local
improvement district that includes an energy efficiency improvement project or
a renewable energy project on commercial private property.
In order for a PACE
program to be implemented, the local governing body must adopt a resolution for
the creation and administration of a PACE program for the purpose of financing
energy efficiency or renewable energy projects. The legislation does not
mandate that the local government adopt a PACE program; it is strictly
voluntary, but it does require that a resolution be adopted and procedures put
in place if the local government chooses to implement a PACE program.
AB
5 enables a lien to be attached to the property which is superior to the
mortgage and runs with the property, thus allowing the property to be sold and
payments to continue through the next owner just as property taxes are paid. AB
5 was approved by Governor Brian Sandoval on June 1, 2017 and went into effect
on July 1, 2017.
FAQs
1. Where does the money for my loan come from?
The funding for the
project would typically come from conventional lenders, such as a bank or
credit union, or a private investor. It is considered property assessed, but is
independent of the local government balance sheet. This means that the local
government is not responsible for providing the capital or recovering any
losses; they simply act as a conduit between the property owner and the lender.
2. Will this legislation require that my
county government establish a PACE program?
The legislation enables SIDs for PACE
projects only. It does not require that a municipality or taxing authority
establish a PACE program.
3. Do I apply to a state agency for a PACE
loan?
You will apply
for your PACE loan through the procedure established by your municipality.
4. How will I know if my project is eligible?
The legislation defines what type of
energy efficiency and renewable energy projects are eligible under the PACE
program established by the municipality.
Check with your municipality for PACE program implementation status.